Agenda item

The Committee received a report which set out the Council’s 2021/22 Draft Budget / 5-year Medium Term Financial Strategy (MTFS) 2021/22 – 2025/26 along with savings proposals relating to the Your Council priority. Attached to the covering report were the draft MTFS paper that went to Cabinet in December, the capital bids relating to Your Council, the new savings proposals within Your Council and the

pre-agreed savings for Your Council. The report was introduced by Richard Grice, Director of Customers, Transformation and Resources as set out in the agenda pack at pages 57-160. Also present for this item were: Frances Palopoli, Head of Corporate Financial Strategy & Monitoring; Andy Briggs, Assistant Director for Corporate & Customer Services; Paul Dooley, Chief Information Officer and Christine Addison, Assistant Director for Capital Projects and Property. Also present were the Cabinet Member for Corporate Services and Licensing and the Cabinet Member for Transformation and Public Realm Investment.

The following was raised in the discussion of this item:

1. In response to a question, the Committee was advised that the total revenue savings within Your Council, totalled £4m from a circa £30m budget in total. However, some of the items within Your Council were delivered by services across the Council and so that £30m total was slightly misleading.
2. In response to a question around the service growth adjustment figure on page 83 of the agenda pack, officers advised that this related to a small figure being put into the budget for 2022-23 which was to cover the ongoing cost of the Civica Mid-call solution which facilitated online payments being taken in a secure way. There was also £300k allocated for a new welfare assistance fund and £67k into HR to recruit local people. In response to a follow-up question, officers advised that this was not a reallocation of budgets from Your Council, it came from elsewhere across the organisation.
3. In response to a question, officers advised that Digital Together was a programme of work to enable the Council to streamline processes to help it carry out the work it undertook. This included, for example, the digitising and automation of processes and effectively modernising the work of the organisation. Officers advised that they had a high level of confidence that the savings set out in the report could be achieved and that significant inroads had been made already in the planning of this programme, which had built on the knowledge and lessons from the Customer First programme.
4. The Committee sought clarification around the finance savings put forward at the February Cabinet meeting and queried whether there were any job losses involved and whether these had already gone through. Officers advised that these were restructure savings that predominantly related to vacancies and that these savings had been delivered. The Committee sought clarification around the number of posts involved. Officers agreed to provide a written response on this. (Action: Richard Grice).
5. In relation to the previous saving YC06 in relation to a £365k saving in Libraries, the Committee expressed a degree of anxiety about whether this could realistically be achieved, particularly in light of the impact of Covid on libraries. In response officers advised that libraries had moved portfolio area since last year’s budget but to the best of their knowledge this saving was based around better utilisation of space and activities in libraries to generate income growth. Officers agreed to come back with a written response, including the extent to which these savings were deliverable in the current climate. (Action: Richard Grice).
6. The Committee cautioned that removal of vacant posts could still result in additional stress and pressures on staff in the long-term which could have a significant impact on the quality and delivery of services.
7. In response to further questions around the Digital Together Programme, the Cabinet Member for Transformation and Public Realm Improvement advised that this programme was around utilising technology and new ways of working to bring council back-office functions into the 21^st century. The programme was cross-council and would be spread across all of the different services. The Cabinet Member clarified that it entailed a bottom-up process of encouraging staff to come forward with their own ideas and areas of best practice. It was suggested that the difference between this and what may have been tried previously was that there was now a team in place to coordinate this. The Committee was also advised that the programme was also looking at licences for software and apps that were no longer relevant and where savings could be made from getting rid of them.
8. The Cabinet Member set out that the Digital Together Programme included a viability funnel for projects put forward and that 40 projects had been funnelled down to 18 that were being moved to the next stage of viability. These projects totalled £1.9m in savings and the programme was working towards a £3m target, but this was an iterative process over a three year programme.
9. In response to concerns about the £3.2m capital investment required for the Digital Together programme, the Cabinet Member acknowledged that this was a significant investment but cautioned that this would be a one-off investment that would allow the organisation to make long term year-on-year savings. In relation a question around the risk attached to this programme, the Committee was advised that monthly programme meetings were undertaken and, as with any programme of this size, adjustments would be made as the programme developed. It was anticipated that as quarterly reviews were undertaken projects under the programme would be either on target or below target.
10. In response to a question around staff reductions involved in the programme, the Cabinet Member outlined that there was a worst case scenario of 30 post reductions across the Council but that no staff were at risk yet. The Cabinet Member also cautioned that the FOBO programme set out a worst case scenario  of 110 job losses, but it ended up at around 50 reductions with no compulsory redundancies.
11. The Committee requested that the quarterly reviews of the Digital Together Programme were brought back to the Committee to provide ongoing monitoring of the programme. Officers agreed to bring the reviews back to OSC as regular update. It was queried whether this could be adapted into a rolling programme of projects in order to help facilitate effective scrutiny.  (Action: Richard Grice).
12. In response to a question, the Committee was advised that the term unidentified savings reflected the budget gap at a particular point in time i.e. the gap between the amount of money the organisation thought it would need to cover expenditure for a particular budget area and the amount of money currently allocated to that budget. Table 7.3 of the report reflected the projected budget gap as of February 2020 and was included in the report to provide context.
13. The Chair of Budget Scrutiny commented that she would like to see a recommendation around ensuring clarity and ease of understanding in future budget scrutiny reports, highlighting the need for people without a finance background to be able to access and understand the information contained within it. The Chair of Budget Scrutiny also commented that she would like to see future budget scrutiny reports clearly separate out each of the priority areas form the main body of information. This should be placed into Revenue and Capital sections with the MTFS table including the RAG ratings and the savings slippage (as was provided to Cabinet).
14. In relation to saving YC101 – Finance savings, the Committee sought clarification around the savings figure involved and the extent to which the level of income generation involved was realistic. In response, officers advised that the saving of £202k related to all four areas and not just treasury management. The figure of £112k given was an estimate of additional income based on trend analysis and officers commented that this was a prudent estimate of the level of additional income.
15. In relation to saving YC104 – Highway Searches, officers advised that the income generation level was estimated at between £24k-£90k based on a variable rate for each search undertaken, depending on how quickly the turnaround time was. The team undertook 300 searches last year and based on the lower charge for a slower turnaround of 3-4 days, this would generate £24k but 300 searches at the higher charge for turning around the search in 4 hours would generate £90k. The savings figure of £24k was based on a prudent assumption that all searches would be at the lowest level.
16. In relation to saving YC105 – Digital Services Establishment Savings, the Committee sought clarification as to whether there was a cost associated with this saving. In response, officers advised that there were no costs involved and that the establishment of Digital Services was to replace the shared service with Islington and Camden. The saving specifically related to the holding open of four vacant posts which would generate £250k in MTFS savings.
17. In relation to saving YC106 – Reduction in Legal Services Support, the Committee sought clarification about the nature of the posts involved and whether the cost of utilising a private barrister would outweigh any savings generated. In response, officers advised that this related to the reduction of four administrative posts, three of which were vacant.  The saving related to learning lessons about how the Legal team operated during the pandemic and utilising this to generate savings. The Committee was advised that the barrister was on a framework contract which allowed the authority to access additional support at preferential rates and that any additional costs would be limited and did not related to the work of the administrative posts.
18. The Committee suggested that they would like to put forward a recommendation in relation to YC106 as they were concerned that reductions in the legal team would seriously impact their ability to support statutory services such as health and social care. (Clerk – to note).
19. In relation to a question on saving YC109 – HR Savings, officers advised that this saving related to the permanent recruitment of staff being brought back in house and the fee previously paid to Hays per recruitment would be used to establish a permanent internal recruitment team, generating ongoing savings. The temporary recruitment contract with Hays had been re-contracted and savings from this would be used to fund the apprenticeship scheme for example. The saving was formulated through a top slicing of the recruitment costs for both temporary and permanent recruitment.
20. The Committee set out concerns with current provision of temporary or agency social workers and welcomed the opportunity to bring recruitment of these back internally. Officers acknowledged these concerns and set out that this was a problem felt across local government. The Director of Customers, Transformation and Resources agreed to write to the Committee to supply figures for the number of agency staff employed within Children’s Services. The Committee also requested figures for the per-day rate of consultancy staff. (Action: Richard Grice).
21. YC 109 - In response to a question around what the £400K investment was for, officers advised that this was for project work and consultancy work that the organisation did not have the expertise to undertake. The Committee sought further clarity around what percentage of the £400k related to the cost of software and how much related to consultancy. The Committee also requested figures on the per-day rate for this consultancy. Officers agreed to come back with a response. (Action Richard Grice/Paul Dooley).
22. In response to a question around whether there was an audit of how much money was spent on interim and agency staff and whether this was regularly monitored, officers advised that this was something that the organisation kept challenging however some areas of recruitment were notoriously difficult to recruit to across local government. The Director of Transformation and Resources advised that the organisation had made good progress on consultancy staff at senior levels and that this was down to single figures. This Committee was advised that this information was regularly reported up to Staffing and Remuneration Committee and was publicly available.
23. In relation to the pre-agreed saving YC07 - Extension of Customer First Approach, officers clarified that this project had successfully delivered around £2.5m of savings and that there was a further £1m identified as a delayed saving that will be going into next year’s budget along with a further £200k flowing into 2022/23.
24. In relation to the pre-agreed savings, The Director of Transformation & Resources advised that he had a high level of confidence that these savings would be achieved and that the RAG status was accurate as officers had undertaken significant amounts of work in monitoring and pushing forward these savings.
25. In response to a request for further details on the capital investment allocated to asset management and the Civic Centre, officers advised that this equated to around £40m of investment spread over the five year period. £21.3m was allocated to the Civic Centre refurbishment and £18.4m for asset management.  Asset management related to corporate estate expenditure that was non-school related for compliance and maintenance work, for example. It was noted that there was a significant backlog in maintenance work around the corporate estate which went back  along way. The Civic Centre is a self-financing business case and there were inherent savings that would be used to offset these costs.
26. In response to a question, officers advised that the capital budget contained a £6.5m continency. There was also a responsiveness fund which was a pot of money that would be used to enable the Council to respond to in year request for match funding from external bodies.
27. The Committee requested a breakdown of the £33m allocated in the capital budget to schools. Officers agreed to provide a response in writing (Action: Christine Addison).
28. In response to a question around whether the allocation for the asset management of buildings included the commercial portfolio, officers responded that it did not, it also excluded housing.
29. The Committee enquired to what extent RPH could be made Covid-compliant, officers commented that a number of areas had been spent to improve the building and its useability, including upgrading the air-conditioning system, the lists and the boilers. However, the windows could not be made to open as it was a sealed air-conditioning system.
30. In relation to the £6.5m contingency and whether any of this related to the Civic Centre, it was noted that this was a completely separate capital budget allocation. Cabinet agreed to the works in December and the total cost was higher that the £21.3m set out in the capital budget as this allocation was for next year and work around feasibility and design had already started. There was a contingency built into the scheme, as there would be for any similar project. Officers agreed to feed back in writing what the contingency figure was (Action: Christine Addison).
31. The Committee noted concerns around capital slippage and suggested that any slippages in the capital budget would have a knock on effect on revenue budgets. The Committee noted that unlike the scrutiny panels who would have access to quarterly budget monitoring including the capital budget for their respective areas, OSC did not have the same oversight in relation to the Your Council Budget. The Chair of Budget Scrutiny commented that she would be discussing with the panel chairs on how OSC could maintain oversight of the Your Council revenue and capital budgets over the year. (Action: All OSC Members).
32. The Director of Transformation and Resources agreed that regular monitoring of the Your Council revenue and capital budgets was a sensible suggestion but noted that monitoring was made more difficult by budgets being held across different areas. The Director of Transformation and Resources agreed to give some further thought on how to best take this forward. (Action: Richard Grice).
33. In response to a question, officers acknowledged that the capital programme was significant and that within Your Council this equated to around £83m over fiver years, around £63m of which was in the three key areas outlined above.
34. The Committee requested further information within the Capital budget around which projects are being funded by the Council and which were self-financing, as these would have different risks attached to them and may have an impact on revenue budgets. The Director of Customers, Transformation and Resources agreed to provide this information via email. (Action: Richard Grice).
35. OSC requested that Asset Management be explained in greater detail in future Your Council budget reports and projects clearly identified.

RESOLVED

That the Committee considered and provided recommendations on the 2021/22

Draft Budget/MTFS 2021/22-2025/26 and proposals relating to Your Council.