Agenda item

An addendum to Item 10 as well as an updated table outlining the County Council’s projected earmarked reserves and balances were tabled at the meeting, these are attached as an appendices 5 and 6 respectively.

RESOLVED:

That the Cabinet agreed;

1.               the release of provisions of £2m and to use reserves of £10m to balance the 2017/18 budget;

1.               the amended savings recommended by the Sustainability Review Board, as shown in Table 1 above;

2.               the capital programme of £387m from 2017 to 2020, which is a reduction of £21m from that approved 7 February 2017;

3.               the capital programme includes £150,000 for the Community Buildings Grant Scheme;

4.               to only borrow for capital schemes where there is a compelling business case and for officers to review future years’ budgets within the capital programme to reduce spending;

5.               the 2017/18 service strategies (Annex 1);

6.               the detailed service revenue and capital budgets for the year 2017/18 and indicative budgets for the years 2018-20 including amendments resulting from the Final Local Government Financial Settlement and other Government funding changes announced since 7 February 2017, including the March Budget (Annex 1);

7.               the proactive and systematic engagement of the County Council in responding to proposed changes in local government funding to ensure these changes do not further disadvantage Surrey, and seeking the appropriate recognition of the costs of delivering services in Surrey;

8.               the following in relation to the funding of Early Years providers:

·         The Local Authority to retain £4.4m of the Early Years grant to manage the sector and allow for a devolved provision for more targeted support.

·         Fund Early Years providers at rates which are commensurate with the levels of funding in the Early Years DSG:

-       £4.51 per hour for three and four year olds

-       £5.88 per hour for two year olds

Change in the distribution of deprivation funding which has been simplified to be based on the Early Years pupil premium funding (paragraph 22);

9.               the publication of the service revenue and capital budgets as the Medium Term Financial Plan 2017-20.

It is further recommended that Cabinet notes:

1.    the additional funding for adult social care announced in the Chancellor of the Exchequer’s Budget 2017;

2.               the options for areas for additional savings and service reductions identified by Sustainability Review Board (SRB) in a separate report (Annex 2);

3.               the Director of Finance’s letter to the Department for Communities and Local Government confirming that the Adult Social Care Precept will be spent entirely on adult social care functions (paragraph 8 and Annex 3);

4.               the fees & charges approved under delegated powers (Annex 4);

5.               the cabinet establish a member led task group to review all service fees and charges and to report to the cabinet in autumn; and

6.               the Equality Impact Assessments of the savings proposals within directorate and service budgets (Annex 5).

Reasons for Decision

The Council has a legal duty to prepare a balanced and sustainable budget and to deliver statutory services to residents.

The Medium Term Financial Plan (MTFP) 2017-20 is a three year budget. It reflects assumptions about the current local and national financial, economic and political environment. Setting a three year budget is a key element of the Council’s multi-year approach to financial management and its aim of achieving a sustainable financial position. Regular reporting through the year will enable effective tracking and management of progress with the strategy and the budget.

[The decision may be called in by the Council Overview Board]

An addendum to Item 10 as well as an updated table outlining the County Council’s projected earmarked reserves and balances were tabled at the meeting, these are attached as appendices 5 and 6 respectively.

The report was introduced by the Leader of the Council who highlighted concerns regarding SCC’s financial stability following its funding settlement from Central Government. Of the £2 billion social care support fund announced by the Chancellor during his Budget Statement, SCC was set to receive £7.5 million for 2017/18 which would contribute towards closing the Council’s budget gap but savings of £93 million were required for 2017/18. Attention was drawn to the work of the Sustainability Review Board (SRB) who had made a series of recommendations on potential savings.

The Leader of the Council introduced the revised recommendations in the report for consideration by the Cabinet which reflected amendments to the Medium Term Financial Plan (MTFP) as outlined in the table attached as Appendix 5 to these minutes. He highlighted that the decision had been taken to maintain SCC’s contribution to the Community Building Grant Scheme for 2017/18 but indicated that it may be necessary to revisit this next year depending on budgetary constraints. Mr David Hodge further advised that SCC would be required to utilise £10 million of its reserves to balance its budget for 2017/18 and that it would be necessary to consider how these reserves could be replenished in future years to ensure that the Council’s resilience wasn’t negatively affected.

The Leader of the Council also announced his intention to establish a Member-led review into fees and charges levied by the Council to ensure that these were fair. Mr Mel Few stated that the Adult Social Care Directorate generates £96 million a year in revenue for the Council through fees and charges and advised that these have gone up 6% year on year.

The Chairman of the SRB, Mr Nick Harrison, read a statement to the Cabinet highlighting a number of areas where the Council could make significant and sustained savings. He suggested that the Cabinet consider achieving further budget reductions through the following steps:

·         reviewing central services;

·         co-locating of services;

·         reducing the Council’s headcount;

·         creating new revenue streams through fees and charges;

·         promoting a single services approach; and

·         more effective use of benchmarking

Mrs Mary Lewis and Mr Tim Evans, who were also on the SRB, thanked Mr Harrison for his efforts in his role as Chairman of the SRB. They both emphasised the need to work at pace to deliver the savings identified by the SRB and contained within the MTFP so that these were delivered in-year and could contribute to the Council’s attempts to save £93 million in 2017/18.

The Chairman of the Council Overview Board, Mr Steve Cosser, also read a statement to the Cabinet regarding the MTFP. He acknowledged the challenges facing the Cabinet in deciding on what services budget reductions should fall given the potential impact on residents but stressed that the pace of delivery on these savings must be accelerated if the desired reductions were to be achieved. Mr Cosser further emphasised the need for the Council to undertake a root and branch review of service delivery in order to determine whether further savings could be made to close the Council’s extant funding gap. He further suggested that Members should have more involvement in future savings programmes to improve the budget scrutiny process. The Leader of the Council agreed that hard decisions did have to be made in relation to the budget reductions and recognised that the pace of delivery on savings did need to pick up. He did, however, highlight that it was important to maintain funding in areas where money was being spent prudently and making a difference to residents such as Members’ grants and local highways budgets. Mr Hodge further stated that the Council had to continue to deliver services while undertaking transformation programmes to realise budgetary savings.

Mr David Harmer, Chairman of the Economic Prosperity, Environment and Transport Board addressed the Cabinet and drew attention to concerns among Members about the proposed reduction to the local highways budget which it was felt would generate other costs for the Council. He instead proposed moving £2 million from the local highways budget to the capital budget for spending on highways projects. The Leader of the Council indicated that he would discuss the practicalities of this proposal with the Section 151 Officer following the meeting.

The Leader of the Council asked each Cabinet Member to provide the financial context for their specific service and received the following updates:

·         Mrs Kemeny presented the finances for Children’s Services on behalf of the Cabinet Member for Children and Families Wellbeing who had sent her apologies for the meeting. She indicated that demand on Children’s Services was relentless stating that the county now had in excess of 900 Looked After Children which placed significant pressures on the Council. This, coupled with its improvement journey meant that Children’s Services had a significant projected overspend for 2017/18. Despite this, it was expected that the Service could make reductions as part of the MTFP while ensuring that vulnerable children remained projected.

·         In relation to her own portfolio as Cabinet Member for Schools, Skills and Educational Achievement, Mrs Kemeny stated, that £4 million in savings were projected in the MTFP for the co-commissioning of children’s health services. Mrs Kemeny advised the majority of savings for the Schools and Learning Service would be achieved through the Special Educational Needs and Disabilities (SEND) budget through closer collaboration with schools and a project to create a more cost-effective SEND Transport Service. Projected reductions in costs on agency staffing would further help to deliver the service’s required savings.

·         The Cabinet Member for Highways, Transport and Flooding indicated that the Highways Service would come in £1.8m under budget for 2016/17. He stated that partner organisations such as Local Enterprise Partnerships had been crucial in helping to build and maintain highways infrastructure across the County by generating and securing capital investment for Surrey’s roads. Mr John Furey further highlighted the importance of retaining spending on mitigating flood risks in the County through initiatives such as the River Thames Scheme which gave SCC a significant net gain through investment in flood defences.

·         Mr Mike Goodman, the Cabinet Member for Environment and Planning, stated that the savings target identified for his portfolio in the MTFP would be challenging to meet and highlighted that community recycling centres and renegotiation of contracts would shoulder the majority of budget reductions.

·         Decreased spending on libraries and customer services were outlined in the MTFP for the Cabinet Member for Localities and Community Wellbeing’s portfolio although it was emphasised that efforts would be made to minimise the impact of these reductions on frontline service delivery through consultation with residents.

·         The Cabinet Member for Wellbeing and Health stated that SCC’s Public Health budget allocation from Central Government was substantially less than it should be which would impact negatively on the Council’s capacity to promote emotional wellbeing and to tackle unhealthy behaviours.

·         The Deputy Leader, Mr Peter Martin, highlighted that budgetary constraints would put pressure on SCC’s ability to promote economic growth throughout the County by reducing infrastructure investments.

The Cabinet Associate for Fire and Police Services congratulated the level of detail contained within the Equalities Impact Assessments that was  completed by each Directorate and which outlined the adverse effects that the savings SCC was being required to make would have on residents, particularly those with protected characteristics. She suggested that directorates should seek to minimise the impact of services transformations on residents by working collaboratively.

RESOLVED:

That the Cabinet agreed;

1.    the release of provisions of £2m and to use reserves of £10m to balance the 2017/18 budget;

2.    the amended savings recommended by the Sustainability Review Board, as shown in Table 1 in the report;

3.    the capital programme of £387m from 2017 to 2020, which is a reduction of £21m from that approved 7 February 2017;

4.    the capital programme includes £150,000 for the Community Buildings Grant Scheme;

5.    to only borrow for capital schemes where there is a compelling business case and for officers to review future years’ budgets within the capital programme to reduce spending;

6.    the 2017/18 service strategies (Annex 1);

7.    the detailed service revenue and capital budgets for the year 2017/18 and indicative budgets for the years 2018-20 including amendments resulting from the Final Local Government Financial Settlement and other Government funding changes announced since 7 February 2017, including the March Budget (Annex 1);

8.    the proactive and systematic engagement of the County Council in responding to proposed changes in local government funding to ensure these changes do not further disadvantage Surrey, and seeking the appropriate recognition of the costs of delivering services in Surrey;

9.    the following in relation to the funding of Early Years providers:

·         The Local Authority to retain £4.4m of the Early Years grant to manage the sector and allow for a devolved provision for more targeted support.

·         Fund Early Years providers at rates which are commensurate with the levels of funding in the Early Years DSG:

1.    £4.51 per hour for three and four year olds

2.    £5.88 per hour for two year olds

Change in the distribution of deprivation funding which has been simplified to be based on the Early Years pupil premium funding (paragraph 22);

10.         the publication of the service revenue and capital budgets as the Medium Term Financial Plan 2017-20.

The Cabinet further noted that:

11.         the additional funding for adult social care announced in the Chancellor of the Exchequer’s Budget 2017;

12.         the options for areas for additional savings and service reductions identified by Sustainability Review Board (SRB) in a separate report (Annex 2);

13.         the Director of Finance’s letter to the Department for Communities and Local Government confirming that the Adult Social Care Precept will be spent entirely on adult social care functions (paragraph 8 and Annex 3);

14.         the fees & charges approved under delegated powers (Annex 4);

15.         the cabinet establish a member led task group to review all service fees and charges and to report to the cabinet in autumn; and

16.         the Equality Impact Assessments of the savings proposals within directorate and service budgets (Annex 5).

Reasons for Decision

The Council has a legal duty to prepare a balanced and sustainable budget and to deliver statutory services to residents.

The Medium Term Financial Plan (MTFP) 2017-20 is a three year budget. It reflects assumptions about the current local and national financial, economic and political environment. Setting a three year budget is a key element of the Council’s multi-year approach to financial management and its aim of achieving a sustainable financial position. Regular reporting through the year will enable effective tracking and management of progress with the strategy and the budget.

[The decision may be called in by the Council Overview Board]