Agenda item

This report details the Sustainability Review Board’s progress towards identifying £30m permanent service reductions and up to a further £22m one-off reductions required to achieve a balanced budget in 2017/18 alongside the Council’s Medium Term Financial Plan for 2017-22 prior to Cabinet approval

Declarations of interest:

None

Witnesses:

Tim Evans, Cabinet Associate for Adult Social Care, Wellbeing & Independence, Sustainability Review Board Member

Mary Lewis, Cabinet Associate for Children, Schools and Families, Sustainability Review Board Member

Kevin Kilburn, Deputy Director of Finance 

Key points raised during the discussions:

1. The Board were informed that the following report on the Medium Term Financial Plan (MTFP) would be considered by Cabinet on Tuesday 28 March and also incorporated the progress report of the Sustainability Review Board (SRB).

2. The Chairman expressed gratitude to the Cabinet Associates in attendance, however expressed disappointment at the absence of senior Cabinet representation which was necessary for the meeting as it involved views on Council leadership. The Chairman advised Members that this would be reflected in the report to Cabinet from this Board.

3. It was noted that the SRB was formed to identify £30m permanent service reductions and up to a further £22m one-off reductions required to achieve a balanced budget in 2017/18. SRB Members explained that it had not been possible to identify these savings in the short period of time the SRB has been working.

4. Members were concerned with proposals to abolish Members allocations and Local Highways funds and argued this would reduce Members ability to resolve issues and respond to resident concerns in their own division effectively diminishing their role as Councillors. It was suggested that the proposals to stop these functions be amended to reduce the amount rather than stop it in its entirety. SRB Members noted these concerns and assured the Board they would be communicated to Cabinet.

5. SRB Members further responded that a narrative of the Council’s situation needed to be endorsed by all Members to make sure residents understand why some local matters could not be responded to. It was further advised that a place-based approach would need to be established and developed at a local level in order to start delivering savings and mitigate the concerns to stop Members Allocations and Local Highways funds.

6. The SRB report indicated that £3-5m in savings were achievable, SRB Members were asked where this saving was recognised in the MTFP and whether it was an immediate saving. Members were advised that the £3-5m in savings was identified in a number of themes and service areas and these proposals were subject to approval by Cabinet. The Board were informed that the unsuccessful delivery of these proposals from the start of the financial year would mean falling back on reserves to achieve a sustainable target.

7. Members raised concern with inconsistencies in the MTFP report in relation to the identified savings and when these savings would be delivered. The Deputy Director of Finance advised the Board that the identified savings of £170m in the MTFP were subject to approval and would be delivered from 2017/18, over three years. The MTFP was developed in parallel with the SRB therefore there are some differences in where savings had been identified.

8. The Chairman commended SRB Members and officers for putting the report together in a short period and under such circumstances, however shared the view that to meet the Council’s considerable savings targets the proposals would have to be implemented at pace and in the appropriate service areas to realise progress towards a balanced budget.

9. Reference was made to the table in Annex 1 of the SRB report and SRB Members were questioned what the value was in identifying these potential savings and in particular with the Heritage, Arts and Music functions when it is noted elsewhere in the report that these figures would not be achievable. SRB Members explained that although these figures were considered not to be achievable to balance the budget for 2017/18, it was necessary to make a note of the potential savings these services could provide in the future.

10. Members sought more clarification on the staffing budget as the report did not address the particulars around the reduction of 101 full time equivalents (FTEs). The Deputy Director of Finance explained that agency staff were employed to cover gaps particularly in care services, however FTE’s had not reduced due to new local government responsibilities.

11. The Chairman requested a list of the capital schemes that would not progress as per the MTFP be provided to members as the report did not incorporate this information.

12. There was a discussion around Equality Impact Assessments (EIA) and officers assured the Board that the saving proposals were assessed to ensure that any proposals that would have negative impacts would be tracked and to make sure remedial action would be taken..

13. The Deputy Director of Finance was asked whether the monthly monitoring reports tracking the implications of the savings were available to scrutiny boards and the officer advised that the monthly cabinet report included a summary of this tarcking and that further analysis of these reports could be made available to scrutiny boards upon request.

14. Members made reference to the fact that delivery of only statutory responsibilities was missing from the SRB report and suggested the Council considered meeting its legal and statutory duties only to minimise costs. SRB Members acknowledged this and explained that the services should not to be judged on this criteria alone when considering how the Council delivers savings as removing non-statutory services could increase the demand on statutory ones.

15. Members raised concerns that the COB recommendations made in January 2016 to reduce the number of Council buildings and to review the future viability of the Policy & Performance and Communications Teams had not been addressed by the Cabinet. The Board were assured by witnesses that work was underway to develop a Surrey-wide view of assets and to develop options for how the Council uses it assets most effectively. In relation to the Policy & Performance and Communications teams, the SRB have proposed a more streamlined, matrix management approach to prevent duplication of roles within the directorates.

16. It was noted that the Revolving Infrastructure and Investment Fund (Annex 1, Appendix 1) was forecasted to remain the same  despite the  time between the investment starting to produce returns and the funding costs the council incurs. Members further noted that the £1.8m of funds produced by investments were allocated into the budget to reduce budget overspends.

17. In an effort to agree recommendations from this discussion the Chairman expressed the view that the pace and intent of the savings exercise needs to change significantly to allow the Council to deliver good services to residents within budget. The Chairman acknowledged Members’ reluctance to endorse the SRB’s proposals to reduce Member allocations and local highways funds and noted that these proposals would have a detrimental effect on communities if implemented. 

18. It was also highlighted that budget scrutiny processes would need to be improved, suggesting that early discussions need to take place with the new council to support fundamental change.

19. The Vice-Chairman expressed the view that the Board’s recommendation should further include specific references to a fundamental review of back office functions and a reduction in the number of buildings the Council operated from.

20. Members showed disagreement with some of the proposals put forward on the MTFP and did not support the report in its entirety especially with the proposals in cutting frontline services.

21. Members could not reach a consensus on the inclusion of specific requests in its recommendations therefore a vote was cast to resolve the debate on what the report to Cabinet should read. Five Members voted in favour of the Chairman’s proposed comments which urged the Cabinet to increase the scale and pace of change. Four Members of the Board voted against this.

22. It was therefore concluded that the Board recognised and shared the desire of the Cabinet to provide the best services possible for Surrey residents and understood the difficulties that there have been in reducing this offer. However, all the evidence the Board has considered confirms that the pace of change must accelerate significantly in the new Council and that there must be a fundamental review of how frontline and support services are provided and the use and retention of council owned assets.

Recommendations:

The Board recommends that:

1. Cabinet notes the very strong resistance of the Council Overview Board to the notion that local member allocation and local committee highways schemes should be completely removed because of its disproportionate and detrimental impact on local communities and asks the Cabinet to not to proceed with this proposal.

2. That the Cabinet provide a commitment to early discussions in the new Council to improve the scrutiny process so as to afford all members a role and sense of ownership in the savings process required to achieve a sustainable budget.

3. Cabinet provides assurance that the enhanced tracking of savings, consultations and equality impact assessments in budget monitoring reports will be available to scrutiny boards.

Further information requested:

A list of capital projects that will not progress now as per the MTFP (Kevin Kilburn)