Budget Review Group Report January 2015

Transcription

1 Democratic Services ITEM 6(b) Budget Review Group Report January Budget Review Group Report January 2015

2 Contents Introduction & Committee Membership 3 Review Group Summary 4 Acknowledgements 4 Executive Summary 5 Recommendations 7 Individual Savings Proposals 10 Measuring the Draft Budget Against Administration Priorities and Strategies 21 Annex A: Terms of Reference 26 Annex B: Additional Information 27 2

3 Introduction & Committee Membership The Budget Review Group (BRG) was established by the Overview and Scrutiny Management Committee to provide a dedicated, cross-party consideration of the Council s annual budget and finances. BRG Terms of Reference can be found at Annex A. For the Council year , BRG is composed of Councillors Ric Brackenbury, Margaret Burke, David Hosking, Stuart Burke, Peter Geary, David Lewis and Kevin Wilson. Elizabeth Richardson serves as the Overview and Scrutiny Officer. The purpose of this report is: (i) to outline the work BRG has carried out to scrutinise proposed budget savings, the policy context, key changes and the proposed strategies for implementing these savings. (ii) to present BRG recommendations to Cabinet on 9 February 2015 for consideration prior to the budget being presented to full Council on 18 February. During January 2015 BRG held a series of focussed meetings where it met with and received presentations from Cabinet Members, assisted by the Council s senior budget holders, to review, scrutinise, and form judgements on the financial environment as part of the development of the budget and the Medium Term Financial Plan (MTFP). BRG also reviewed the Cabinet response to its interim report (presented to Cabinet in November 2014) and this report refers to the interim report where similar issues are discussed. Councillor Ric Brackenbury Chair, Budget Review Group January

4 Review Group Summary In addition to its standard work programme, BRG met four times in January 2015 and considered the proposed medium term budget savings by Service Groups / areas discussed as follows: Date Service Group / Areas discussed 6 January 2015 Forecast Outturn to end of November 2014 (Period 8) Adult Social Care and Health Housing and Community 7 January 2015 Community and Cultural Services Review Public Transport Planning and Transport 15 January 2015 Wider Use Funding Public Access Integrated Support and Social Care (Children s Social Care) Public Realm Finance, HR, Governance and Cross-Service Areas 21 January 2015 Capital Programme Cabinet Response to November Report Review and Write Up At the January meetings BRG asked Cabinet Members / council officers to provide further information or clarification concerning various items which were discussed at the meetings. Details of the requests for additional information are included at Annex B. The agenda, reports, presentations and minutes for each of the above meetings are available on the Council s website at: Details/mid/521/id/943/Default.aspx Acknowledgements BRG would like to thank all Cabinet members and council officers who assisted with preparing documents and presentations, as well as giving up their time to speak at the meetings, and for their assistance in supplying supplementary information when requested to do so. Some produced 4

5 detailed presentations with little notice over the Christmas break and BRG is particularly grateful for this. BRG is also grateful for the diligence and patience of Elizabeth Richardson (Overview and Scrutiny Officer) in managing the committee through an intense workload, and to Tim Hannam (Corporate Director Resources), Nicole Jones (Service Director [Finance and Resources]), and James Smith (Head of Financial Planning) in producing relevant documentation for scrutiny both at the Challenge Meetings and regularly throughout the year. The Environment and Transport Select Committee carried out detailed scrutiny of the proposals concerning buses; BRG thanks them for taking a late item and for the additional expertise that they added to discussions. The Chair would also like to thank Councillors M Burke and Hosking for their vital input and support as Vice-chairs, as well as all councillors who attended and spoke at the BRG review meetings. 5

6 Executive Summary This report does not seek to pass judgement on what is necessary to make the council budget acceptable; that is a matter for full Council and its political groups. As a result, this report contains not only recommendations for immediate amendment but also wider strategic issues, and the commentary against each proposal illustrates the focus of discussion. BRG expect this report to assist Cabinet in finalising its own budget proposals; should the Cabinet be unable to agree the recommendations, the hope is that this report will give ideas to political groups in forming amendments and in making decisions for the budget meeting. Instead, this report considers the draft budget focussing almost entirely on the proposed savings against the Administration s stated priorities and strategy. Comments are made where proposals seem ill-thought through, are like to likely lead to costs elsewhere, or conflict with known strategies. BRG has tried throughout its meetings, and in this report, to be robust and fair; where proposals have stood up to scrutiny and the strategy is clear and agreed, this is welcomed and the report indicates support for these individual proposals. The draft budget has received much adverse publicity due to the impact and communication of the savings proposals. BRG believes that it is possible to agree a budget which protects the vulnerable and drives council priorities even within the constraints of reduced funding, and hopes this report indicates a path towards such a budget. BRG commends it to the Cabinet, full Council, and the residents of Milton Keynes whom it serves. 6

7 Recommendations All recommendations are to Cabinet unless stated otherwise. Recommendation 1: That the Overview and Scrutiny Management Committee be requested to arrange scrutiny of the pace of the Public Access programme, and of the detailed outline business cases as they are approved. Recommendation 2: That the Citizens Advice Bureau contract be extended by 6 months by using one-off resources, while the Council works with them to redesign the service in terms of future requirements, reduced costs and an affordable model which can deliver the core advice contract. Recommendation 3: That details on the alternatives, if any, for this service (Handyperson Service) be included in the final budget proposal. If there are no alternative proposals, then develop this as a commercial service which is a response more in keeping with the Administration s priorities. Recommendation 4: That the necessary short-term funding be provided in order to support the YMCA in a self-funding or reduced-funding model over time so that it can continue to provide services for the homeless. Recommendation 5: That given the deep concern among BRG members at the impact of this savings proposal, the Cabinet works with the provider (St Mungo s) to find funding and efficiencies (such as a remodelled property portfolio) to continue to house such vulnerable tenants. Recommendation 6: That consideration be given to subjecting this proposal (Revising the Housing Allocations Policy) to scrutiny by a Task and Finish Group in order to ensure that the policy is fair, robust and workable, and to act on any recommendations for improvements that emerge. Should this scrutiny take place after the policy changes have been made, it should review how well it is operating. Recommendation 7: That work be done with officers and all providers (such as schools) to find a way to support such a valuable service (Parenting Support Service). Recommendation 8: That an analysis be carried out of the value in terms of future social care savings this service (Parenting Support Service) delivers. As a minimum, review the paper produced by the current provider (claiming that 13 is saved for every pound spent) so that a decision to close is based on future savings projections as well as current costs. Recommendation 9: That a full, cross-party review of the purpose, extent and value of Wider Use funding takes place in with proposals taking effect in BRG tentatively recommends prioritising 7

8 community groups which are able to demonstrate that commercial rents would be unviable for their group to meet. Recommendation 10: That temporary measures be put in place for to protect groups affected by the proposed changes to the Wider Use fund who are unable to make alternative arrangements (such as moving venue or additional charging of group members) for , and to work with them to identify alternative sources of funding and efficiencies. Recommendation 11: That either a full review of the Council s transport strategy be conducted, removing all reference to a modal shift away from car use, or agree cross-party a minimum level of bus service to be provided to comply with this strategy. Recommendation 12: That the Administration considers using one-off funding to defer the proposed savings S87 and S88 (Bus Subsidies) in whole or part, to allow time to consult properly on alternatives to route closure. Once decisions have been made, then commit to using the additional income from the parking surplus to fund routes on an ongoing basis if required. Recommendation 13: That a fresh review be made of the business cases for the proposed new car parks in CMK to ensure they are deliverable, and reviewed at the time of decision to build. Recommendation 14: That the Overview and Scrutiny Management Committee be requested to consider, in a year s time, carrying out a review of the impact of this saving (provision of black sacks) and any mitigating actions needed. Recommendation 15: That the Administration seeks alternative delivery mechanisms for pink sacks; in some areas it may be feasible to work with ward councillors and parishes who are already making deliveries, or consider a shared delivery with other items such as publications. Recommendation 16: That the Overview and Scrutiny Management Committee be requested to ensure that these proposals in relation to commercial services are scrutinised in more detail. Recommendation 17: That any reviews of council services to be carried out as part of the budget process should begin during the summer, so that budget proposals can emerge from them in time to be included in the draft proposals and full Council can make informed decisions at their budget meeting. Recommendation 18: That a review be carried out of the Council s management structures and overheads needed for the size and scope of the Council following these budget proposals, and implement the results without delay. 8

9 Recommendation 19: That additional one-off funding be sought to deliver the transitional funding for service reconfiguration, and to fund the recommendations in this report. This may involve the delay of one or more agreed programmes. 9

10 Individual Savings Proposals BRG chose to scrutinise the most significant savings proposals, to ensure that time was spent on the proposals with the greatest impact. All S references refer to the list of proposed savings for the budget (Annex D in the cabinet papers currently out to consultation.) A threshold of 150k was applied, however group members were able to request any item not meeting this threshold to be scrutinised. Items covered by request were: changes to wider use funding (S64-S67); the ending of the provision of free black sacks delivery (S100); delegation of planning applications (S132); the restructure of planning (S136). This section does not list all the savings in the draft budget but instead discusses proposals which are examples of the general comments which follow, or where BRG has specific comments and recommendations to make. In all cases the report is by exception; where there is no comment BRG did not feel there was any way it could add value to the discussion within this report, even if members believed that the saving was a poor choice. S1, S4: Savings compared to the cost of the contract previously paid to Mouchel (inclusive of pension strain and royalty payment) following the successful renegotiation to buy out the Mouchel contract and transfer work to the Milton Keynes Service Partnership (MKSP.) Further cost reduction for MKSP as a result of additional income generation or cost reduction (Total 2,699k total). BRG was concerned that these proposals amounted to 2.7m of savings which it had not been able to scrutinise in as much detail as it would have liked, although it noted the cross-party representation on the MKSP board. These are significant amounts, given the size and relative newness of MKSP, and raise questions about whether the Council can learn from MKSP in how to generate income and realise efficiencies. S6: Estimated future savings from the Public Access project. Actual savings will be confirmed through a business case approach and shown against the individual service area involved. The total inputs reflect full savings being achieved by the Music Service, ACE and Housing (excludes HRA) ( 279k). BRG was very supportive of the work done so far by the Public Access team to improve the delivery of public-facing services, whilst at the same 10

11 time achieving significant cost savings for the Council. Given the support and the need for further savings BRG would like to see whether the rate of transformation can be increased. Recommendation 1: That the Overview and Scrutiny Management Committee be requested to arrange scrutiny of the pace of the Public Access programme, and of the detailed outline business cases as they are approved. S11: The Contract for provision of information and advice (Citizens Advice Bureau [CAB]) is due to end October The service will not be re-commissioned. Options for how information and advice will be available are being explored, in line with the Care Act requirements ( 260k). Although it was suggested that a potential solution was that the CAB could run the Central Library, no evidence was produced by either side that the proposal would work in terms of either library service delivery or the information and advice service. BRG does not oppose this in principle, but the funding and mechanics may not be achievable. BRG noted that if the proposed cut went ahead, Milton Keynes would be the largest city in the UK without a core CAB service, and heard how supporting the CAB with a core contract allows for the provision of more specialist services and partnership working. The Administration s view that the current service was not necessarily what would be required in the future needs to be challenged. Having made the suggestion, the Administration did not put forward any ideas as to their vision for the service, and problems with benefits, debt, housing etc. are likely to remain key issues for the residents of Milton Keynes. Although much of the work done by the CAB is carried out by volunteers, the organisation still has significant overheads which need to be covered if the organisation is to remain viable. However, BRG was of the view that the CAB should take this opportunity to review all cost areas to find internal efficiency savings, as many other organisations (not least the Council) have had to do. BRG felt that the Administration had initially taken an uncooperative approach to the problem and that if it was considering alternate provision, this should be part of the budget proposals. However, BRG welcomed the fact that the Cabinet was now attempting to come to a solution in order to protect an important service aimed squarely at the vulnerable and which carries a reputational risk to Milton Keynes if lost. Recommendation 2: That the Citizens Advice Bureau contract be extended by 6 months from one-off resources, while the Council works with 11

12 them to redesign the service in terms of future requirements, reduced costs and an affordable model which can deliver the core advice contract. S12: Cessation of Infrastructure Support to the Voluntary Sector Service ( 120k). BRG believes that this savings proposal should form part of a much broader discussion of how the Council interacts with the voluntary sector. The voluntary sector may be mature enough to self-commission this service, but BRG has not heard enough evidence to make a recommendation and further conversations are needed. S14, S149: Review MKC contribution to section 75 Mental Health services with CNWL ensuring MKC budget contributions only fund social care aspects of this joint service. This will generate a saving with no reduction in current social care provision ( 550k). BRG had no problem with the fundamental principle behind this proposal but thought that negotiations with the Central and North West London NHS Foundation Trust (CNWL) should have been completed, and agreement reached before inclusion in the draft budget proposals. If no agreement could be reached with CNWL, there could be serious issues with delivering the necessary savings in this area. S29: Remove MKC subsidy from a range of low level services, including luncheon clubs, home visiting reader service and conversation partnership scheme ( 292k). Since the draft budget proposals had been prepared, funding for the Blind Reader service has been re-instated. This was one of the draft budget proposals where BRG considered that cutting relatively small amounts of money could have a disproportionate effect on a large number of service users. This move was welcomed by BRG, as its loss would have had a significant impact on service users; the 12k saving would have meant that 7000 annual volunteer hours were lost. BRG was of the view that it had been unwise even to include this item in the draft budget, and welcomed the speedy change of heart. BRG agreed with the principle that charged for services such as lunch clubs should be working towards a position of being self-financing (although acknowledged the transport issues faced.) However, BRG had concerns over the Home Care services element of the proposal as this also had a preventative role in reducing the need for more expensive Adult Social Care services. 12

13 S147: Decommission Handyperson Service and create a market for a range of self-funding options ( 160k). BRG was disappointed that what could have been a workable entrepreneurial opportunity had been missed. AgeUK operates a very successful handyperson service, for which a reasonable charge is made and there does not appear to be any reason why the Council could not develop a similar service. There was a lack of clarity over transition or how the Council planned to create a market for self-funding options. The BRG papers said that the administration would consider alternative ways of creating a service which BRG felt was too vague a description for this stage of the budget process. BRG was concerned that any alternatives would not be in place in time for the current service ending on 1 st April Recommendation 3: That details on the alternatives, if any, to be provided for this service be included in the final budget proposal. If there are no alternative proposals, then develop this as a commercial service which is a response more in keeping with the Administration s priorities. S163: Joint Commissioning savings resulting from an increased contribution from health ( 200k). As with S14 and S149, BRG had no problem with the fundamental principle behind this proposal but thought that discussions with the Milton Keynes Clinical Commissioning Group (CCG) should have been completed, and agreement reached before inclusion in the draft budget proposals. If no agreement could be reached with the CCG, the proposed savings in this area may be undeliverable. S31: Removal of Subsidy for supporting those not in priority need, whilst safeguarding the most vulnerable, in particular by retaining provision for teenage pregnancies ( 798k). These savings run counter to the Administration s strategy in several ways: putting vulnerable people at risk (returning to domestic abuse, risk of teenage pregnancy to qualify for support), creating costs elsewhere (statutory services, council housing, police and health services, benefits), lack of co-operation with partner organisations (no notice of the end of funding) and reputational risk to the Council. BRG welcomed the announcement that conversations were ongoing to provide transitional funding to support the YMCA and give it time to develop strategies to become a self-funding (or reduced funding) service, but it would have liked to have seen evidence of where the reported underspend which made this possible was coming from. 13

14 In the case of St Mungo s (the current provider,) BRG was disappointed that no transitional support was planned as there was the likelihood of young people becoming homeless when the current contract ceased on 1 July 2015, or returning to unsuitable living arrangements from which they had escaped. This would undoubtedly have a knock-on effect on the provision of services elsewhere in the Council, and the justification of prioritising statutory cases ignores the vulnerability of the tenants affected. Recommendation 4: That the necessary short-term funding be provided in order to support the YMCA in a self-funding or reduced-funding model over time so that it can continue to provide services for the homeless. Recommendation 5: That given the deep concern among BRG members at the impact of this savings proposal, the Cabinet works with the provider (St Mungo s) to find funding and efficiencies (such as a remodelled property portfolio) to continue to house such vulnerable tenants. S32: Eliminate the use of Bed and Breakfast (B&B) by revising Allocations Policy to house only statutory homeless cases (includes restricting service access to highest need cases only) both for council housing and Registered Provider nominations. The HRA will provide support to current tenants who wish to move, for example, through the supported use of Home Swapper ( 480k). BRG noted the political attention this saving has generated, with both a policy call-in and the Housing Revenue Account budget not being approved by full Council. As a result, the conclusions on this item will soon be out of date. There were concerns over the potential need to run a higher level of voids, of making less suitable allocations (due to allocating only at time of the previous tenant vacating the property), the knock-on of less rental income, and an inability to guarantee that the use of B&B accommodation will be ended for good in peaks of demand. BRG felt that the moral case made by the Administration for this change is not straightforward. Refusing support for some families in Band 1, in order to improve the prospects of the statutory homeless, only creates winners and losers, both of whom are vulnerable. BRG cited parallels with the national Right to Buy policy where the benefits for those able to purchase their own property contrasts with the reduced stock available to those in need of housing. BRG agreed that the aim to stop the use of B&B accommodation is admirable, but members have mixed views on whether this is an appropriate way of doing so. Increasing the housing stock is the only sustainable way to eliminate B&B use. The lack of prior scrutiny by any competent body within the Council was worrying, for such a fundamental policy. This was a classic example of an issue which would have benefitted 14

15 from pre-decision scrutiny. BRG was minded to recommend that this proposal be deferred until such scrutiny had taken place. Recommendation 6: That consideration be given to subjecting this proposal to scrutiny by a Task and Finish Group in order to ensure that the policy is fair, robust and workable, and to act on any recommendations for improvements that emerge. Should this scrutiny take place after the policy changes have been made, it should review how well it is operating. S40, S47: The parenting commission contract will not be recommissioned when it ends on 31 March 2015 ( 300k total). This saving undermines many Council aims, such as protecting the vulnerable, working with partners who had been given an understanding of some continuation, preventing future costs (an alleged 13-fold cost saving in prevention) and preventing family breakdown. There was a lack of transitional support planned, and the prior BRG recommendation that such prevention services be treated as statutory had been ignored. The Administration is (rightly) openly reluctant about ending this service. However, there appears to be an overall lack of strategy on using such prevention services to reduce future care needs, not helped by changes in Cabinet portfolio responsibility. BRG believes that the impact of ceasing this service will not be seen for some time, but it will be significant. However BRG is not convinced that all current spend is value for money, and accepts that savings can be made. The current provider has indicated that with 106k they could provide parenting classes, targeted support and a helpline; this would provide both a saving ( 194k) and safeguard the core service although BRG has not verified these figures. Alternatively, Milton Keynes Council may be able to run a core service effectively out of children s centres. However, there is no evidence that the Council has the resource to do this, and BRG expressed concern that children s centres could be overloaded and the quality of early years provision affected. Recommendation 7: That work be done with officers and all providers (such as schools) to find a way to support such a valuable service. Recommendation 8: That an analysis be carried out of the value in terms of future social care savings this service delivers. As a minimum, review the paper produced by the current provider (claiming that 13 is saved for every pound spent) so that a decision to close is based on future savings projections as well as current costs. 15

16 S64, S65, S66, S67: Reduction to wider use grants over three years from 2013/14. A 6% reduction in 2014/15 (as part of a 3 year agreement) and 9% reduction in 2015/16 to reflect original projection of likely Government funding reduction. Removal of grant to football groups, strictly enforce the eligibility criteria, only funding groups that operate after 4.00 pm weekdays and introduce a maximum grant award of 1000 per group, removal of funding to community groups using facilities at academy schools and other non-mkc owned buildings ( 43k total). This will have an impact on many groups disproportionate to the savings made. Although adjusted over the years the original purpose of this funding has been forgotten - is it about supporting the use of council buildings, or supporting local organisations? Some organisations may have come to rely on this money to remain operational without considering alternatives to receiving this funding. BRG also notes that should groups no longer meet in school buildings, this will have a financial impact on the individual schools. A full review is needed, looking at why this funding exists and what it is trying to achieve. BRG tentatively suggests prioritising community groups that can demonstrate it is unviable for them to pay commercial rents. Short-term measures should be put in place while this review is ongoing, to ensure that no organisations have to stop meeting in the meantime. With more time BRG might have come up with specific proposals but this is left for the Cabinet / full Council to determine details. Recommendation 9: That a full, cross-party review of the purpose, extent and value of Wider Use funding takes place in with proposals taking effect in BRG tentatively recommends prioritising community groups which are able to demonstrate that commercial rents would be unviable for their group to meet. Recommendation 10: That temporary measures be put in place for to protect affected groups who are unable to make alternative arrangements (such as moving venue or additional charging of group members) for , and to work with them to identify alternative sources of funding and efficiencies. S87, S88,S89, S90: Reduction in bus subsidies which will result in a loss of some routes and changes to others. Reduction in subsidy of senior non-statutory peak travel concession to half-fare. Reduction in junior fares concessions to half fare ( 1,692k total.) BRG considered the Administration s approach to be fundamentally flawed; both in conducting negotiations with bus operators with almost no success and in its consultations with service users. BRG felt that negotiations were carried out at the last minute and were described as brinkmanship BRG 16

17 was not surprised to see such poor outcomes. Indeed service users on routes which were not even proposed to be removed began to campaign for their route to be protected, as they had no way of knowing which routes were under threat. A public discussion over whether to prioritise fare subsidy or route subsidy would have been far more useful, together with discussions with parishes about whether they would be able to assist. Both Newport Pagnell and Little Brickhill in particular have indicated that they would be interested in holding such discussions. This approach has frustrated scrutiny, left the public unable to comment on proposed savings, and prevented any serious debate or consultation, producing negative reactions from the Milton Keynes Bus Users Group, parishes and the Green party. Given the above, and accepting that cuts must be made, the approach to selecting routes is sensible, with a 60% reduction in subsidy leading to only a 25% reduction in passengers. However the proposals in their current form involve routes either continuing or stopping. This ignores options such as reduced frequencies each day, running only on certain days, or use of taxis / minibuses as is already done in some rural areas. In 2010, the (non-s106) bus subsidy funding was 2.57m. It currently stands at 1.44m, and is proposed to reduce to 0.536m in a 79% reduction in 5 years. The reductions here have reached the point where people are being left with no alternative but to increase their car use or are simply unable to make journeys. This undermines the Council s transport strategy for a modal shift to reduce congestion. Those without car access will be unable to access work, health, shopping beyond local centres or recreation. This will have a big impact on vulnerable people with possible knock-on consequences for other services such as increased use of community transport. On the other hand, the savings may be more than anticipated, as no reduction in the use of concessionary services with the increased fares is anticipated. If the proposal to build temporary cark parks in CMK goes ahead, an anticipated 1m surplus in the parking fund is likely to be generated from onwards, which could be used for ongoing bus funding. Recommendation 11: That either a full review of the Council s transport strategy be conducted, removing all reference to a modal shift away from car use, or agree cross-party a minimum level of bus service to be provided to comply with this strategy. Recommendation 12: That the Administration considers using one-off funding to defer the proposed savings S87 and S88 in whole or part, to allow time to consult properly on alternatives to route closure. Once decisions have been made, then commit to using the additional income from the parking surplus to fund routes on an ongoing basis if required. 17

18 S91, S92, S93, S94, S95, S128, S162: Increased parking charges Premium tariff increase from 1.40 to 2.0; Standard tariff increase from 0.40 to 0.50 per hour; Long stay increase from 8 to 1;, reduction in employee permit subsidies: the present 50% subsidy will be reduced to 40% in 2015/16, 30% in 2016/17 and 25% in 2017/18. New Parking Charges - Theatre multi-storey car park: income arrangement with contractor, resulting in savings on management fee; all long stay off street car parks: first 2 hours free; then 40 per hour to a maximum of 2.40 a day. Introduce parking charges on bank holidays ( 3,598k total). BRG heard a convincing argument from Councillor Joe Stacey of Olney Town Council that the proposals for charging for long stay parking in Olney would be ineffective, and has doubts in general that the out of town long stay parking charges (S128) will raise much money, given installation and enforcement costs, and the alternatives (e.g. other locations, or staying for less than 2 hours). BRG is also concerned about any measures which would decrease the vitality of local town centres. BRG does not object to the strategy behind the CMK parking proposals, including the use of MKDP land to provide temporary car parking and notes that these are income generation measures, and not a cut in service provision. However BRG sees risks in: demand not meeting projections (especially if the multi-storey car park is built); the sites having 6 month notice periods should development proposals be received. BRG welcomes the proposals for Pay on Exit charging in the new car parks, and asks that these are treated as pilots for the expansion of Pay on Exit parking across Central Milton Keynes. Recommendation 13: That a fresh review be made of the business cases for the proposed new car parks in CMK to ensure they are deliverable, and reviewed at the time of decision to build. S132: Increase delegation to officers to levels of similar councils, thus reducing the number of DC Panel and DCC meetings and reducing costs and delays ( 30k). This saving will require cross-party agreement on increasing thresholds for planning applications to come to panel or committee. BRG members have mixed views on both the desirability and the detail of increased delegation (and thus tightened criteria for objections to be taken to panels). If these views are reflected in full Council, agreement will not be easy to achieve, and so the saving may not be possible. BRG made a specific recommendation on this in November, proposing securing this agreement 18

19 before putting a proposal into the draft budget, which has been ignored. As a result this saving must be seen as risky. S136: Restructure of Planning ( 45k). This saving is to be achieved by the reduction of 1 full time equivalent. BRG was keen for the saving to be re-invested in the Planning Department, which was currently seen to be under-performing in a number of areas, in order to increase efficiency and improve standards. It was hoped that increased efficiency and service re-alignment would then produce further savings. S100: Removal of the provision of one-off yearly black sacks drop ( 150k). Although a very visible saving, BRG does not believe this is one of the most significant proposals in this budget, recognising that this will add an average annual household cost of approximately Recommendation 14: That the Overview and Scrutiny Management Committee be requested to consider, in a year s time, carrying out a review of the impact of this saving and any mitigating actions needed. Recommendation 15: That the Administration seeks alternative delivery mechanisms for pink sacks; in some areas it may be feasible to work with ward councillors and parishes who are already making deliveries, or consider a shared delivery with other items such as publications. S113: Review of Commercial Services ( 100k). While the idea of income generation through increased commercial activity by the Council is welcome, BRG is not convinced that this proposal is fully developed to the stage it forms part of a robust budget. Recommendation 16: That the Overview and Scrutiny Management Committee be requested to ensure that these proposals are scrutinised in more detail. S141: Review of employee terms and conditions ( 250k) BRG noted that this needs agreement with both the cross-party Joint Negotiating Committee, and also the trades unions; this will not be known until after the budget meeting, so the saving cannot be guaranteed as available. S38a, S45, S73, S74, S75, S85, S154, S155, S156, S157, S158,S159, S160, S161 - Community and Cultural Services Review The concern here is that the Council is being asked to agree 2.8m of savings without knowing what they will be. Should the proposals then prove 19

20 unacceptable, the funding will already have been lost. Cabinet needs to be careful in assuming savings from any review yet to happen. Tying a specific cuts target to the review also reduces flexibility (including for further savings). This should have been announced in the summer and carried out in the autumn, with the conclusions then informing the draft budget. Should there be any similar proposals next year, BRG urges the Administration to carry out the review in a timely manner, so that the conclusions can inform the budget, not follow on from it. However BRG received a clear presentation with the strategic aims and timescales of the review well specified, and far stronger evidence of working with partners than elsewhere. Councillor Liz Gifford is to lead this review and BRG congratulates her for taking it on. She gave a clear and competent account of the review and has picked up the portfolio quickly. As she is new in post it would be unfair to level the above criticism at her. The Leader commented that net income-generating assets were lost in early Community Asset Transfers; BRG does not believe this to be the case and no evidence was provided to back up this claim. Recommendation 17: That any reviews to be carried out as part of the budget process should begin during the summer, so that budget proposals can emerge from them in time to be included in the draft proposals and full Council can make informed decisions at their budget meeting. Capital Programme All Items BRG reviewed the draft capital budget at its final meeting. BRG recognised that many schemes were needed to meet statutory responsibilities, continue prior year schemes, or meet health and safety requirements. These include new school build programmes, the dualling of the A421 to J13 of the M1, and various bridge repairs, including what seemed a very high spend on an individual bridge in Newton Blossomville. Inclusions where there was choice included expansions of MK Gallery, and plans for enhancements to the area around Bletchley railway station, which were supported in principle by BRG. 20

21 Measuring the Draft Budget against Administration Priorities and Strategies In the initial October meetings, the political strategy of the Administration towards setting a budget was presented as having two core themes: protecting the vulnerable prioritising services affecting those most in need; and A Co-operative Council leading partnership working across the public, voluntary and commercial sectors. The budget strategy itself had three components: Cutting costs; Alternative models of service delivery; An entrepreneurial approach (later changed to commercial however, the term entrepreneurial will be used in this report as it is a better fit for what the strategy detail is about). 1) Protecting the Vulnerable It is recognised by all that the draft budget will have a significant impact on many vulnerable people. Indeed, this priority was subtly changed to protecting the most vulnerable during our challenge meetings. The Review Group heard attempts to justify proposals by referring to those the Council had statutory duties to provide services to, and less reasonably by comparing against a category of people in even greater need. BRG questions this form of justification. Vulnerable can be defined as in need of special care, support, or protection because of age, disability, or risk of abuse or neglect. This definition has no reference to comparisons with others; whether someone is classed as vulnerable depends on their own circumstances and needs. There are a number of choices the administration could have made which would have affected residents more universally. While these would no doubt be controversial in themselves (and BRG is not recommending any of them), they illustrate the various options that could have been chosen instead of some savings which exclusively remove services for the vulnerable: Increases in council tax the administration stated that the 700k increase in income would not generate enough funding set against the negative impact on some residents; Reduced frequency of bin collections; Reduced streetlight operations; 21

22 Further savings in council management; Charging for monitoring of CCTV cameras on behalf of commercial organisations. BRG recognises that there is no way the required savings (and income generation) can be made without any impact on vulnerable service users, as they receive a disproportionately high share of council services. However BRG is concerned about the impact of many of these proposals on service users with little freedom to make alternative provision and urges the Administration to be more robust in seeking efficiencies and alternative delivery mechanisms rather than simply closing services wherever possible. 2) Co-operative Council BRG recognises that there are different understandings among councillors and council officers of what it means to be a Co-operative Council and that the Council itself is in a process of working through this; this section does not attempt to define this but instead reflects concerns expressed by a number of partners at the BRG meetings; it may be useful to consider what they would understand as co-operative behaviour. BRG has heard complaints from many organisations facing funding cuts over a lack of discussion, late changes in plans leaving no time to make transitional arrangements or plan strategically, and it is evident how hard the Administration is working during the period of consultation to try to find ways forward. At a time of such pressures and challenges it is a shame that less time was spent on discussions with partners ahead of the draft budget proposals being made public and the harm in relations caused will take time and effort to repair. There is also a perception that key contracted services have been cut more severely than in-house services, and that the draft budget contains less reduction in council management and overheads than has been the case in recent years. By way of illustration, here is the total pay bill for MKC staff for the past 2 years and for next year in the draft budget: : 69,680,286; : 64,496,720; budget: 65,441,869. The figures are not directly comparable (e.g. no reference to changes from the Community and Cultural Services Review, a pay rise to be implemented in , and the implementation of the living wage) but they do lend weight to the suggestion. There seems to be an acceptance that becoming a Co-operative Council will take time and practice; this draft budget suggests we have a long way to go, and need to be having very different conversations with our partners well in advance of budget proposals being circulated. 22

23 Recommendation 18: That a review be carried out of the Council s management structures and overheads needed for the size and scope of the Council following these budget proposals, and implement the results without delay. 3) Cutting Costs Many of the cost reductions are not listed here as they are individually small so BRG has little comment to make as a group. It is clear that the Council has reduced costs in many areas and that further savings without impact on service delivery are unlikely to be achieved. BRG urges the Administration to look at ways that different services can share costs such as deliveries to all doors by different departments being pooled, and the proposals for the NHS / Public Health budgets to cover some adult social care spend. BRG has concerns about the lack of clarity in some of the proposals. Words such as may, might and consider do not give confidence that the proposals have been fully thought through and finalised, and at times seemed more appropriate for an options paper than a draft budget. BRG could not scrutinise all savings proposals in the draft budget in the time available to it. The draft budget contains several proposals for saving very small amounts in comparison to the largest savings (e.g. proposals that do not save as much as the uncertainty around income from increasing parking charges). Although not scrutinised by the Group as a whole, individual BRG members query whether some of these smallest savings will be worth implementing. 4) Alternative Delivery Models The draft budget contains several examples of changing delivery models, exemplified in the Community and Cultural Services Review, but also in significant savings from MKSP, Public Access and the use of capital funding. BRG can see that further work is being done through reviews of MKSP or additional Public Access projects, and welcomes the progress made to find more efficient ways of working, often improving the public face of services at the same time. The shortcomings here are ending contracts without consideration for a transformed service at lower cost, and the discussions currently underway with some of the organisations affected should have happened much earlier. BRG also has concerns over the lack of one-off funding attached to deliver significant changes. The 1.8m transitional funding for the Community and Cultural Services Review (ongoing savings of 2.8m) will not stretch far over 18 months as claimed, and several recommendations in this report call 23

24 for additional one-off funding to be provided to allow time for more sustainable solutions to be found. BRG is not convinced that developing new ways of working can be quickly achieved, and recognises that significant transitional funding will be required, perhaps well beyond the amounts currently being discussed, and that significant additional one-off and short-term funding will be required. Recommendation 19: That additional one-off funding be sought to deliver the transitional funding for service reconfiguration, and to fund the recommendations in this report. This may involve the delay of one or more agreed programmes. 5) An Entrepreneurial Approach BRG is disappointed with the lack of follow-through on the Administration s bold statements about becoming an entrepreneurial council. The proposals for Bereavement Services are the only clear proposals in the draft budget. S113 is similar, but is only a stream of ideas in the draft budget, and BRG has doubts about the income to be raised from e.g. a pest control service. The proposal to invest in new CMK car parks which then generate income can be regarded as entrepreneurial, or at least commercial, but the Administration does not seem to recognise it as such. The closing of the Handyperson service, rather than attempting to run it as a traded service, highlights the lack of ambition and delivery. The pace of this strategy feels too slow and unfocussed, and BRG had been led to believe that a greater variety of proposals would be in the draft budget. BRG emphasises again the recommendations made in its interim report about the need for a central strategy and approach, with marketing and business development support available to individual areas as needed. BRG believes these previous recommendations remain necessary. 24

25 Annex A: Terms of Reference The following Terms of Reference for the BRG were ratified by the Overview & Scrutiny Management Committee on 10 October 2012: 1. To provide dedicated, cross-party consideration of the Budget and the Council s finances with a view to establishing and maintaining resources which are fit for purpose and address the needs and aspirations of the people of Milton Keynes and the Council s priorities. 2. To contribute to the delivery of Council Priorities by making recommendations on: a. Priority of services; b. Service efficiencies; c. Value for money; and d. Financial strategies 3. To consider and comment on Procurement, Workforce, ICT and Property issues in the light of the Council s Financial Strategy. 4. To monitor the in-year progress of the Revenue and Capital Budgets. 5. To scrutinise and comment upon annual out-turn reports for the Revenue and Capital Budgets and identify learning points. 6. To be consulted during the preparation of the annual Revenue and Capital Strategies and Budgets. 7. To scrutinise the draft Revenue and Capital Budgets. 8. To make recommendations to the Cabinet on any of the above matters at any time and to submit comments to the Council in relation to the Cabinet s proposed Revenue and Capital Budgets at the appropriate time. 25

26 Annex B: Additional Information 6 January 2015 Housing and Community Jane Reed to confirm number of empty houses which will be retained at any one time as temporary accommodation (Jane Reed) Hannah O Neill & Jane Reed agreed to report on progress on S32 to BRG in October 2015 (to be added to 2015/16 work programme) Adult Social Care & Health That spreadsheets showing voluntary sector funding be updated to make clear the difference between the planned cessation of funding and the expiry of contracts which will be renewed in the future (J Smith) BRG would like clarification of where the transitional funding for the YMCA, CAB and the re-instated support for the Reader Service is coming from (Finance Team). BRG to be advised of the Clinical Commissioning Group s decision on the re-alignment of the mental health provision once it has been received (Nigel Long). More information on the Public Health budget (Finance Team). Councillors Middleton and Long to take back to the Cabinet the Group s concerns about using such vague terms as might, maybe, possibly and hope at this late stage of the process. More work should have been done earlier to ensure robustness (Middleton & Long). 7 January 2015 Community & Culture Service Review BRG requested that it be provided with a table of unallocated one-off resources, whether any allocation had been identified and what was then left (Finance Team). BRG requested details of how the figure of 2.8m for the Community and Cultural Services Review (CCSR) over two years had been arrived at (Paul Sanders). Cllr L Gifford to provide a statement to councillors about the CCSR assessment of the library service at a local level which they could 26

27 pass on when they attended local parish / town council meetings (Liz Gifford). Bus Subsidies and Concessionary Fares To be provided by Brian Matthews and Andrew Coleman Parking Provide the justification for the 907k. Provide answer as to why 285k of one-off spending allocated to buses was not used and was available to be diverted to Cyclo-Cross. Response on investigation of smaller vehicles/taxi-buses. Suggestion of EQIA done by route. Bring more detailed proposals to E&TSC on 19 January (possibly on red paper). Provide take up assumptions for the concessionary fare changes. Provide figures on usage, including cross boundary journeys. To be provided by Brian Matthews and Andrew Coleman Provide the set up costs for the off-street parking areas outside CMK (eg Olney etc) (and possibly also a list of car parks affected). Carry out an EQIA (referring to low paid shop workers). Set out the parking account income and expenditure. Provide the business case for the MKDP sites. Provide comparison with other areas (towns and regional shopping centres). Traffic growth/parking demand figures. There is also the Pay on Exit issue around Rebecca Kurth s ideas. 15 January 2015 Public Access Re-issue chart in slide 6 with better colours and legend to make it clearer. Finance Team to check if the medium term reduction in FTE figures quoted in S6 was correct or not and advice BRG accordingly. Provide examples of the business cases backing up the proposals in the draft budget. 27

28 Public Realm MH to advise of possible savings to be made by moving from weekly, to fortnightly bin collections. MH to provide figures to show comparison with prices charged by private sector operators for pest control at commercial premises. 21 January 2015 Cabinet Response to November Report BRG requested information on council tax collection rates. 28

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30 Democratic Services Overview and Scrutiny Milton Keynes Council Civic Offices 1 Saxon Gate East Central Milton Keynes MK9 3EJ Elizabeth Richardson Overview & Scrutiny Officer T E scrutiny@milton-keynes.gov.uk 30