COUNCIL CHAMBER, CIVIC OFFICES

Transcription

1 Democratic Services BUDGET REVIEW GROUP MONDAY 30 MARCH PM COUNCIL CHAMBER, CIVIC OFFICES A G E N D A Councillor Councillors Councillors Brackenbury (Chair) M Burke & Hosking (Vice-Chairs) S Burke, P Geary, Lewis and Wilson For more information about the meeting please contact Elizabeth Richardson on Tel: (01908) or Elizabeth.Richardson@milton-keynes.gov.uk

2 What is Overview and Scrutiny? Each local authority is required by law to establish an overview and scrutiny function to support and scrutinise the Council s executive arrangements. Each select committee has its own remit as set out in its terms of reference but they each meet to consider issues of local importance and have a number of key roles: 1. Providing a critical friend challenge to policy makers and decision makers 2. Enabling the voice and concerns of the public 3. Driving improvement in public services. The select committees consider issues by receiving information from and questioning officers and external partners to develop an understanding of proposals or practices. They then develop recommendations to provide to officers, Members or external partners that they believe will improve performance, or as a response to public consultations. As select committees have no executive powers they often present their conclusions in the form of recommendations that can be provided to the Council, elected Members or other external agencies. Members will often request a formal response and progress report on the implementation of recommendations that they have provided to various parties. Attending Meetings of Select Committees / Review Groups Meetings of the select committees / review groups are held in public and are open for everyone to attend. If you would like to attend then please just turn up but if you can then let us know you are attending in advance of the meeting and whether or not you would like to make a representation to Members on behalf of yourself or others. If there are specific issues that the meeting must consider in private then they will be asked to consider this at the meeting. After the meeting the recommendations and Minutes of the meeting, as well as agendas and reports for the majority of the Council s public meetings are available via the Council s website at: ( 2

3 The Overview and Scrutiny process aims to promote the five themes and priorities set out in the Milton Keynes Council Corporate Plan The Corporate Plan and framework sets out the vision for Milton Keynes. It captures what type of place Milton Keynes aspires to be for all those who live, work, learn and visit here. The plan sets out ambitious new objectives for Milton Keynes including achieving world class status for its design, new approaches and technologies and as a sporting city. It has five key themes which help communicate all the work the Council does on behalf of the residents of the borough. The five themes are: Cleaner, greener, safer, healthier Milton Keynes: Improve health and well-being, reduce health inequalities and work with partners to reduce crime and disorder to improve quality of life in MK. Visiting Milton Keynes: Aim to make Milton Keynes a highly regarded visitor destination with a safe and effective transport system which is easily accessible regionally, nationally and internationally. Working in Milton Keynes: To improve the skills and opportunities of everyone in Milton Keynes and help jobseekers into work, while attracting and retaining businesses to provide new opportunities and to bring people, jobs and industries to MK to improve the strength and resilience of the local economy. Living in Milton Keynes: Ensuring people are satisfied with Milton Keynes as a place to live, and to support them effectively through the provision of high quality and efficient public services. World Class Milton Keynes: Our ambition is to increase the international and national standing of Milton Keynes in several areas including our economic success, thriving communities and a high quality environment. 3

4 General Terms of Reference for Overview and Scrutiny Committees / Panels (a) (b) (c) (d) (e) (f) (g) To review or scrutinise any decision made, or other action taken, in connection with the discharge of any of the Executive Functions within the remit of the Committee/Panel. To make reports or recommendations to the Council or to the Cabinet with respect to the discharge of any of the Executive Functions within the remit of the Committee/Panel. To review or scrutinise any decision made, or other action taken, in connection with the discharge of any of the Non-executive Functions within the remit of the Committee/Panel. To make reports or recommendations to the Council or any Committee of the Council with respect to the discharge of any of the Non-executive Functions within the remit of the Committee/Panel. To make reports or recommendations to the Council, to the Cabinet or to a regulatory committee on matters within the remit of the Committee/Panel which affect the Council's area or the inhabitants of the Council's area. To consider any representations made in connection with the work of the Committee/Panel by a Member of the Council on behalf of her/his constituents. To appoint advisers from outside the Council to advise the Committees/Panels. Budget Review Group Terms of Reference 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 the Council s Corporate Plan by making recommendations on: (a) Priority of Services (b) Service efficiencies (c) Value for money (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. 4

5 Health and Safety Please take a few moments to familiarise yourself with the nearest available fire exit, indicated by the fire evacuation signs. In the event of an alarm sounding during the meeting you must evacuate the building immediately and follow all instructions provided by the fire evacuation officer who will identify him/herself should the alarm sound. You will be assisted to the nearest designated assembly point until it is safe to return to the building. Mobile Phones Please ensure that your mobile phone is switched to silent or is switched off completely during the meeting. Agenda Agendas and reports for the majority of the Council s public meetings can be accessed via the Internet at: Wi Fi access is available in the Council s meeting rooms. Recording of Meetings The proceedings at this meeting may be recorded for the purpose of preparing the minutes of the meeting. In accordance with the Openness of Local Government Bodies Regulations 2014, you can film, photograph, record or use social media at any Council meetings that are open to the public. If you are reporting the proceedings, please respect other members of the public at the meeting who do not want to be filmed. You should also not conduct the reporting so that it disrupts the good order and conduct of the meeting. While you do not need permission, you can contact the Council s staff in advance of the meeting to discuss facilities for reporting the proceedings and a contact is included on the front of the agenda, or you can liaise with staff at the meeting. Guidance from the Department for Communities and local government can be viewed at the following link: _Openness_Guide.pdf Comments, Complaints and Compliments Milton Keynes Council welcomes comments, complaints and compliments from members of the public in order to make its services as efficient and effective as possible. We would appreciate any suggestions regarding the usefulness of the paperwork for this meeting, or the conduct of the meeting you have attended. Please use the slip overleaf by detaching it and passing it to the Overview and Scrutiny Officer. Alternatively the slip can be returned by post to Democratic Services, Milton Keynes Council, Civic Offices, 1 Saxon Gate East, Milton Keynes, MK9 3EJ, or you can your comments to scrutiny@milton-keynes.gov.uk If you require a response please leave contact details, ideally including an address. A formal complaints / compliments form is available online at 5

6 Meeting Attended: Budget Review Group Date of Meeting: 30 March 2015 Comments: Contact Details:

7 AGENDA 1. Welcome and Introductions The Chair to welcome Councillors, officers, witnesses and the public to the meeting and introduce Councillors, officers and witnesses who are present. 2. Apologies 3. Disclosures of Interest Councillors to declare any disclosable pecuniary interests, or personal interests (including other pecuniary interests), they may have in the business to be transacted, and officers to disclose any interests they may have in any contract to be considered. 4. Minutes To approve, and the Chair to sign as a correct record, the Minutes of the meetings of the Budget Review Group held on 6 January, 7 January, 15 January, and 21 January (Items 4a 4d) (Pages 9 to 22). 5. Update on the Medium Term Financial Plan / Monitoring Forecast Outturn To scrutinise an update on the Medium Term Financial Plan and a summary of the budget monitoring report up to the end of January 2015 (Item 5(a)) (pages 23 to 32) The Council updates its Medium Term Financial Plan at three points during the financial year to provide a framework for the Council s financial planning. This summary will update the Budget Review Group on the current forecast resources available for the medium term period 2014/15 to 2017/18. On 12 February 2014, the Council set a budget which agreed how financial resources would be used in 2014/15. The presentation will explain the forecast position to date and summarises the detailed budget monitoring report considered by the Cabinet on 9 March The Review will receive a presentation from the Corporate Director Resources giving the latest position (Item 5(b)) (pages 33 to 36) 6. Review of the Budget Challenge Process To review this year s budget preparation process: what worked, what didn t, lessons learnt etc and make recommendations on how the process could be improved next year. The BRG s November and January Reports on the 2015/16 budget are included for information as Items 6(a) (pages 37 to 62) and Item 6(b) (pages 63 to 92). To receive an update on the implementation of the 2015/16 budget, ie progress on items not specified in the budget papers, such as 175k cuts in bus route subsidies, planning criteria changes, the Cultural and Community Services Review etc. 7. Provisional Work Programme 2015/16 Following the decision by full Council on 14 January 2015 to implement a new scrutiny structure from May 2015, scrutiny of the Council s budgets, financial processes and related issues, will be undertaken by a standing Budget Scrutiny 7

8 Committee, which will be a sub-committee of the new Scrutiny Management Committee. The present Review Group is asked to give consideration as to how the new Budget Scrutiny Committee should conduct its business during 2015/16 including what items it would like to consider at the regular meetings and how scrutiny of the draft 2016/17 budget should be conducted. Provisional dates for meetings of the new committee are as follows: Regular Meetings: Monday 27 July 2015 Monday 21 September 2015 Monday 21 March 2016 October Challenge Meetings (Pressures): Wednesday 7 October 2015 Tuesday 13 October 2015 Thursday 15 October 2015 Thursday 22 October 2015 Monday 26 October 2015 January Challenge Meeting (Savings): Tuesday 5 January 2016 Tuesday 12 January 2016 Thursday 14 January 2016 Tuesday 19 January 2016 Monday 25 January

9 ITEM 4(a) MINUTES of the BUDGET REVIEW GROUP MEETING held on TUESDAY 6 JANUARY 2015 at 7.00 PM Present: Apologies: Officers: Councillor Brackenbury (Chair) Councillors M Burke, P Geary, Hosking, Lewis and Wilson Councillor S Burke N Jones (Service Director Finance and Resources), J Smith (Financial Planning Manager), S Joyner (Service Director Adult Social Care and Health Partnerships), M Hancock (Assistant Director Joint Commissioning), V Collins (Assistant Director Older People and Physical Disability Services/ Care Act Lead), C Chandler (Finance Manager Community Wellbeing), J Reed (Service Director Housing and Community), M Smith (Housing Finance Manager), and E Richardson (Overview and Scrutiny Officer) Also Present: Councillors Bald, L Gifford, Legg, Long, McDonald, Middleton, O Neill and C Williams and 14 members of the public Witnesses: Disclosures of Interest: H Denyer (St Mungo s Broadway Housing Association), S Green (MK YMCA), S Harrison (MK Reader Service), S Naylor (Citizens Advice Bureau), J Palmer (AgeUK), R Stone (CommunityAction:MK) Councillor Wilson declared an interest in Item 6 of the agenda as his wife was an Advice Worker with the Citizens Advice Bureau and agreed to withdraw from the discussion of this item. Although not a member of the Review Group, Councillor C Williams requested that it be noted that he was the Council s representative on the Board at the Citizens Advice Bureau and also that he was a reader with MK Reader Service. BRG /15 Budget Monitoring: Forecast Outturn to the End of November 2014 (Period 8) The Review Group received a presentation from the Service Director Finance and Resources explaining the Council s budget position as at the end of November This information would be reported to Cabinet on 12 January 2015 and would include a report on how departments were managing any predicted overspends. The Review Group queried whether the use of the Demand Led Reserves (DLR) indicated an under-funded budget or whether the budget agreed in February 2014 had been wrong. They were advised that DLRs were there to mitigate any potential unforeseen risks which might occur during the financial year. During 2014/15 the demand for Council services in certain areas had BUDGET REVIEW 6 JANUARY 2015 PAGE 1 GROUP 9

10 increased faster than anticipated. The DLRs would not be drawn down until the end of the financial year and once all other options had been considered. In some years the DLRs were not spent at all. The budget that had been agreed in February 2014 was based on the best evidence available at the time and was considered a reasonable and workable budget at that point. BRG also noted that the Dedicated Schools Grant was based on a pupil head count taken in January, which did not allow for the growth surge experienced by Milton Keynes Schools in September. This created a time lag before government funding caught up with actual pupil numbers BRG 25 BRG26 BUDGET SCRUTINY 2015/16: HOUSING AND COMMUNITY The Review Group scrutinised and discussed the significant saving proposals in relation to the Housing and Community Service Group identified during preparation of the 2015/16 draft budget with the Cabinet Member for Housing and Regeneration and the Service Director Housing and Community. The saving was based on a revision to the Council s Housing Allocations Policy to house only statutory homeless cases. The revised policy would be presented to Cabinet for approval on 12 January The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. BUDGET SCRUTINY 2015/16: ADULT SOCIAL CARE & HEALTH The Review Group scrutinised and discussed the significant saving proposals in relation to the Adult Social Care and Health Service Group identified during preparation of the 2015/16 draft budget with the Cabinet Member for Health and Wellbeing and the Service Director Adult Social Care and Health Partnerships. The Review Group received presentations from St Mungo s Broadway Housing Association, the YMCA, the Citizen s Advice Bureau, CommunityAction:MK and AgeUK on the effects the proposed savings would have on their ability to continue to deliver services to the residents of Milton Keynes. BRG noted that since the proposed budget had been drafted, money had been identified to provide some transitional funding to the YMCA and the Citizen s Advice Bureau to enable them to explore alternative funding. Sufficient funds had also been identified to support the MK Reader Service for another year. However, at this time, no such funds had been identified for St Mungo s, AgeUK or CommunityAction:MK. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any BUDGET REVIEW 6 JANUARY 2015 PAGE 2 GROUP 10

11 recommendations would be included in the Review Group s Report to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. THE CHAIR CLOSED THE MEETING AT PM BUDGET REVIEW 6 JANUARY 2015 PAGE 3 GROUP 11

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13 ITEM 4(b) MINUTES of the BUDGET REVIEW GROUP MEETING held on WEDNESDAY 7 JANUARY 2015 at 5.00 PM Present: Apologies: Officers: Councillor Brackenbury (Chair) Councillors M Burke, S Burke, P Geary, Hosking and Lewis Councillor Wilson T Hannam (Corporate Director Resources), M Bracey (Corporate Director People), A Rose (Service Director Planning and Transport), P Sanders (Assistant Director Community Facilities), S Thirlway (Assistant Director Integrated Support and Social Care), A Coleman (Passenger Transport Manager), J Smith (Financial Planning Manager), C Chandler (Finance Manager Community Wellbeing), P Powers (Finance Manager Children and Families), and E Richardson (Overview and Scrutiny Officer) Also Present: Councillors Bald, Bint, Clifton, L Gifford, Hopkins, Legg, Marland, McDonald, Middleton and Miles and 11 members of the public Witnesses: BRG27 BRG 28 Councillor J Stacey, Olney Town Council BUDGET SCRUTINY 2015/16: COMMUNITY AND CULTURAL SERVICES REVIEW (CCSR The Review Group received a presentation from Councillor L Gifford, Cabinet Member for Community Services) which outlined how and when the Review would be carried out, the scope of the Review, arrangements for guidance of the Review and what it hoped to achieve. The Review Group noted that the CCSR was about delivering a package of sustainable services whilst at the same time delivering savings over a two year period. Councillor Gifford would be taking a detailed report on the CCSR to full Council on 18 February for discussion by all councillors. BUDGET SCRUTINY 2015/16: REDUCTION IN BUS ROUTE SUBSIDIES The Review Group scrutinised and discussed the significant saving proposals in relation to the Reduction in Bus Subsidies identified during preparation of the 2015/16 draft budget with the Cabinet Member for Economic Growth and Inward Investment and the Service Director for Planning and Transport. Councillor Clifton explained that any review of bus subsidies needed to consider responses from operators and users, value for money, available alternatives and Council policy objectives and priorities. A map showing the core commercial bus routes in Milton Keynes, BUDGET REVIEW 7 JANUARY 2015 PAGE 1 GROUP 12

14 together with the routes currently subsidised by the Council was provided, although there was no indication which of these routes was likely to have its subsidy removed. The Review Group expressed its concern at the lack of detail in the proposals and that as these were still be being discussed with the bus operators it could be deemed to be commercially sensitive information. The Review Group felt that this hindered it in carrying out the rigorous scrutiny required during consideration of the draft budget proposals and discussed alternative means of scrutiny. RESOLVED That this item should be referred to the meeting of the Environment and Transport Select Committee on 19 January for detailed scrutiny and that, if necessary, it would be heard in a closed session. BRG29 BRG30 BUDGET SCRUTINY 2015/16: CONCESSIONARY BUS FARES AND PARKING CHARGES The Review Group scrutinised and discussed the significant saving proposals in relation to the Concessionary bus fares and parking charges identified during preparation of the 2015/16 draft budget with the Cabinet Member for Economic Growth and Inward Investment and the Service Director for Planning and Transport. The proposed savings included reductions in the subsidies for concessionary bus fares for both senior and junior fares and increases to car parking charges across the borough. Councillor Stacey, from Olney Town Council addressed the Review Group to explain what the impact of introducing parking charges would mean to the economy of small, local centres such as Olney, and that the cost of implementing and enforcing such charges might well exceed any income. Councillor Clifton agreed to seek clarification of the set-up and maintenance costs for this proposal against estimated income. He would also look at knock-on effects such as increased parking in residential areas necessitating the introduction of residents only parking schemes which could be costly to operate. Other proposals included establishing 3 temporary car parks in Central Milton Keynes to alleviate the problem of a shortage of standard rate parking bays in the city centre. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. BUDGET SCRUTINY 2015/16: PLANNING The Review Group scrutinised a proposed restructuring of the Planning Department, which included increased delegation of planning application approvals to officers, reducing delays in the BUDGET REVIEW 7 JANUARY 2015 PAGE 2 GROUP 13

15 process and reducing costs as fewer Development Control Committee meetings would be required. Although the proposed savings were small, the Review Group agreed that any measures which led to an improved service delivery for Planning Enforcement were to be encouraged. For many members of the public, the Development Control Committee was their only contact with the democratic process and the Review Group did not want to see this undermined by an increased delegation of planning application approvals to officers. Councillor Legg, Cabinet Member for Public Realm stated that this was not the case, as the percentage of decisions delegated to officers in Milton Keynes was only 80%, compared with a national average of 95%. Many planning applications went through uncontested by either the public or the Council and that taking these applications to committee was a waste of limited resources. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. THE CHAIR CLOSED THE MEETING AT 9.00 PM BUDGET REVIEW 7 JANUARY 2015 PAGE 3 GROUP 14

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17 ITEM 4(c) MINUTES of the BUDGET REVIEW GROUP MEETING held on THURSDAY 15 JANUARY 2015 at 6.30 PM Present: Officers: Councillor Brackenbury (Chair) Councillors M Burke, S Burke, P Geary, Hosking, Lewis and Wilson M Bracey (Corporate Director People), N Jones (Service Director Finance and Resources), M Hainge (Service Director Public Realm), P Mellor (Assistant Director Public Access), P Sanders (Assistant Director Community Facilities), S Thirlway (Assistant Director Integrated Support and Social Care), R Peck (Head of Customer Service) J Smith (Financial Planning Manager), C Bland (Leisure and Communities Manager), C Chandler (Finance Manager Community Wellbeing), P Powers (Finance Manager Children and Families), A Rulton (Capital Finance Manager) and E Richardson (Overview and Scrutiny Officer) Also Present: Councillors Bint, L Gifford, Legg, McDonald, Middleton and Miles and 9 members of the public Witnesses: Disclosures of Interest: J Cove, Chief Executive (MK Dons Sport Education Trust), R Stone (Community Action MK) Councillor Hosking declared an interest in Item 4 of the agenda (Public Access) as an employee of Weblab, which currently supplied the Council with IT software. Councillor Brackenbury declared an interest in the item on Wider Use Funding as the Different Strokes community group was associated with his employer the Stroke Association. Councillor Brackenbury also declared an interest in the item on Children s Social Care as he was a Trustee of the MK Dons Sport Education Trust. BRG31 BUDGET SCRUTINY 2015/16: COMMUNITY FACILITIES WIDER USE FUNDING The Review Group received a short presentation from Councillor L Gifford explaining the purpose of the Wider Use Funding, the conditions of eligibility and which community groups were likely to be affected. Representatives from some of the groups affected by the proposals also made representations to the meeting about the impact the withdrawal of funding would have on their activities. The Review Group noted that the Council had inherited the Wider Use Funding from Buckinghamshire County Council when it became a Unitary Authority in Over the years anomalies had mounted BUDGET REVIEW 15 JANUARY 2015 PAGE 1 GROUP 15

18 up and the original policy had been stretched over time and was no longer strictly enforced. The proposed changes were an attempt to bring actual practice in line with policy. Although accepting the need for the re-alignment of practice and policy, the Review Group was concerned about the impact of withdrawing this funding could have on the groups affected. Many of them were youth groups such as scouts or sports teams and there could be knock-on effects on other council services if these groups folded. Given the small amount of money involved, the Review Group suggested that funding be maintained at the current level for 2015/16 whilst a review of the policy and its operation was carried out and recommendations made on how it should operate in the future. This approach was welcomed by both the Cabinet Member for Community Services and the Assistant Director (Community Facilities). RESOLVED That following the introduction of new scrutiny procedures from May 2015, a Task and Finish group be established to review the policy on Wider Use Funding, iron out the anomalies and make recommendations on how it should be managed in the future. BRG32 BRG33 BUDGET SCRUTINY 2015/16: PUBLIC ACCESS Councillor Middleton, Cabinet Member for Resources and Commercialism, gave a presentation on the Public Access Budget proposals which covered the overall approach, how the savings would be achieved and plans for implementation risks mitigation. The Review Group noted that public-facing services were being redesigned with the customer in mind so that wherever possible, enquiries were resolved on first contact; providing a better service first time ultimately saved money. Initially, the Public Access Team was concentrating on high volume, high value services which would deliver the best savings, but it was also working to eventually redesign all of the Council s public access services. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. BUDGET SCRUTINY 2015/16: CHILDREN S SOCIAL CARE Savings S40 and S47 proposed that the current parenting support contract provided by the MK Dons Sport Education Trust (SET) would not be recommissioned for 2015/16. The Review Group received a presentation from John Cove, Chief Executive of SET on the work they had done with families in Milton Keynes over the past 30 months as part of their contract to deliver a Get Set Parenting BUDGET REVIEW 15 JANUARY 2015 PAGE 2 GROUP 16

19 programme. He also included information on the services SET could continue to offer at a reduced level of fees. The Assistant Director (Integrated Support and Social Care) confirmed that the Council recognised the quality of the service provided by SET, which it been able to expand beyond the remit of the original specification. The Cabinet Member for Children and School Improvement agreed that SET had provided an excellent service but that it was a matter of affordability. The work was important and still needed to be done; he hoped that the Council would be able to absorb this into the Children s Social Care Service Group and that eventually there would also be more support from the school sector. The Review Group had grave concerns about discontinuing this service which they discussed at length with the Cabinet Member and the Assistant Director (Integrated Support and Social Care). The Review Group was of the opinion that the consequences of not renewing this contract would not be noticed immediately, but rather in 2 or 3 years time and could put a future strain on other council services. The Review Group felt that this was a decision that had not been thought through properly and showed a lack of strategic thinking or plans for transitional arrangements. BRG were also concerned that any reduction in progress with dealing with these families could have a knock-on effect on the receipt of the Troubled Families funding from central government as this funding was on a payment by results basis. The consequences of not continuing with this support from SET could be dire, leading to an increase in failed families and increased costs elsewhere in the Council when trying to pick up the pieces. BRG considered this to be one of the worst proposals in the budget, showing a lack of strategy or transitional arrangements and they recommended that it needed to be rethought. BRG acknowledged the Council s statutory obligations to children s social care, but suggested that did not mean they had to be delivered in a certain way. The Council needed to look at doing things better and more efficiently. There were no areas of service provision which should not be looked at to see what efficiencies could be identified. In relation to saving S46, which proposed ceasing to commission Community Engagement Activity, the Review Group received, without comment or discussion, a short presentation from Ruth Stone from Community Action MK, explaining what she considered to be the importance of the Community Mobiliser programme and the impact the Council s decision to cease funding this service might have, particularly with regard to the Council s stated aim of becoming a co-operative council. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report BUDGET REVIEW 15 JANUARY 2015 PAGE 3 GROUP 17

20 to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. BRG34 BRG35 BUDGET SCRUTINY 2015/16: PUBLIC REALM The Review Group received a very comprehensive presentation from Councillor Legg, Cabinet member for Public Realm, explaining the proposed savings for the Public Realm Service Group, implementation risks, effects on service users, reasoning for the decision and any mitigation required. The Review Group commended Councillor Legg for his clarity of presentation and for providing them with the information they required. Following discussion of the proposals, the Review Group requested that the Service Director Public Ream supplied it with additional information on: (i) How much could be saved by moving to fortnightly waste collections, even though this was not part of Council policy and there were no plans to consider this measure; (ii) Figures to show comparisons with prices charged by private sector operators for pest control at commercial premises; and (iii) Whether the MK Crematorium was competitive with other local authorities. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. BUDGET SCRUTINY 2015/16: FINANCE, HR, GOVERNANCE AND CROSS-SERVICE AREAS A written explanation of the proposed savings had already been circulated to the Review Group by the Service Director Finance and Resources. Councillor Middleton, Cabinet Member for Resources and Commercialism, added his comments during the meeting. Many of the savings for this Service Group were based on technical improvements in how the Council managed its finances and other process efficiencies and did not, therefore affect direct service delivery to the public. The Council was also exploring where it could use its capital resource, rather than incurring revenue costs. It was also continually looking for sustainable solutions within the Council s finances, including spend to save projects, such as the new waste management facility. The proposed savings would be further scrutinised at the meeting of the Budget Review Group scheduled for 21 January 2015 and any recommendations would be included in the Review Group s Report BUDGET REVIEW 15 JANUARY 2015 PAGE 4 GROUP 18

21 to be submitted for consideration by Cabinet on 9 February 2015 as part of the 2015/16 budget setting process. THE CHAIR CLOSED THE MEETING AT PM BUDGET REVIEW 15 JANUARY 2015 PAGE 5 GROUP 19

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23 ITEM 4(d) MINUTES of the BUDGET REVIEW GROUP MEETING held on WEDNESDAY 21 JANUARY 2015 at 6.30 PM Present: Officers: Councillor Brackenbury (Chair) Councillors M Burke, S Burke, P Geary, Hosking, Lewis and Wilson N Jones (Service Director Finance and Resources), A Rulton (Capital Finance Manager) and E Richardson (Overview and Scrutiny Officer) Also Present: Councillor Middleton and 29 members of the public Disclosures of Interest: BRG35 BRG36 Councillor Wilson declared an interest in Item 5 of the agenda (Preparation of Recommendations to Cabinet) as his wife was a Advisor at the Citizen s Advice Bureau. Councillor Brackenbury declared an interest in Item 5 of the agenda (Preparation of Recommendations to Cabinet) as he was a Trustee of the MK Dons Sport Education Trust. Councillor P Geary declared an interest in Item 4 of the agenda (2015/16 Draft Budget: Capital Programme) as one of the projects related to proposals for flood defences on his land. BUDGET SCRUTINY 2015/16: PUBLIC REPRESENTATION The Review Group received a number of presentations from members of the public concerning some of the funding cuts proposed in the draft budget, with several of the speakers urging councillors to reject the budget as currently proposed. These concerns were noted and the Chair confirmed that where appropriate, they would be reflected in the Review Group s final report. He also requested that the Service Director (Finance and Resources) explain to those present the serious legal and logistical implications of the Council not agreeing a balanced budget. BUDGET SCRUTINY 2015/16: CAPITAL PROGRAMME The Review Group received a presentation on the Council s Capital Strategy from the Service Director (Finance and Resources) which outlined the key principles, Resources, Key Investment Requirements, Setting the Programme and Issues for the future. The Review Group considered the presentation and the schemes currently in the Council s Capital Programme and noted that: This was a long term investment plan with school provision, particularly in expansion areas, a major item; There was a need to bring income into Milton Keynes and BUDGET REVIEW 21 JANUARY 2015 PAGE 1 GROUP 20

24 developing facilities such as the Museum and making Milton Keynes a cultural and tourist destination would help with this; Continued investment in the borough s highway infrastructure would also help to make Milton Keynes a destination of choice; Long term regeneration of the area would address inequalities in the borough; The Council was building new council houses to try and address the housing shortage; Although most of the improvements to Bletchley Railway Station were being funded externally, the Council had had to contribute some capital funding. Bletchley would be a significant hub once the East-West rail link was complete. There was also a need to make Bletchley a destination in itself and it was hoped that there would be more commercial development around the station area; Pinch-point improvements to the eastern end of the A421, were being partially funded by the Government s Local Growth Fund, but this had to be match funded by the Council; The Council was supporting the installation of superfast broadband in Milton Keynes which should underpin greater economic prosperity; Although there were significant costs involved in the building of the Residual Waste Treatment Facility, which would need to be managed properly, once operational the Council would be spending considerably less on waste disposal, giving a revenue saving, and the possibility of an income stream if spare capacity could be sold to other local authorities; There was a requirement for the Council to manage its finances in a proper manner and have money available to pay its debts; The New Homes Bonus (NHB) could be spent on either revenue or capital projects. However, using the NHB for revenue funding could have a short term, sticking plaster effect, whereas if it was used for capital projects, the Council eventually acquired an asset with the potential to generate revenue in the future; Work on the Plan MK proposals was a cross party process. BRG37 PREPARATION OF RECOMMENDATIONS TO CABINET The Review Group had received a written response from the Cabinet to the report it had prepared following the October Challenge meetings which it discussed with Councillor Middleton. During the discussion the following points were noted: This year it was agreed that there had been a real dialogue between the Review Group and the Cabinet and the Chair had facilitated some very positive discussions; An increase in Council Tax (up to the pre-referendum limit of BUDGET REVIEW 21 JANUARY 2015 PAGE 2 GROUP 21

25 1.9%) would only have raised a further 750k, which was insignificant in the face of the savings that needed to be made; the Cabinet was of the opinion that the increase would be too big a burden on residents; Not setting a budget at all would be reckless; however an agreed budget might not be the budget as currently presented: If Portfolio holders identified savings, it was clear that they needed to check with officer colleagues that it would not create a pressure elsewhere in the Council; The medium term challenges facing the Council were significant but there was nothing in the budget about how the Council should be restructuring for the future. The Review Group then considered the evidence it had taken at the previous challenge meetings, highlighting those items which were causing it most concern and which it would include in the final report. The Review Group agreed that the report would: outline the work carried out to scrutinise the proposed budget savings, the policy context, key changes and the proposed strategies for implementing these savings; and present the Review Group s recommendations to Cabinet on 9 February 2015 for consideration prior to the budget being presented to full Council on 18 February. The Review Group expressed the hope that its report would assist the Cabinet in finalising its own budget proposals and that should the Cabinet be unable to agree the recommendations, also hoped that the report would give ideas to the political groups in forming amendments and in making decisions at the budget meeting. THE CHAIR CLOSED THE MEETING AT PM BUDGET REVIEW 21 JANUARY 2015 PAGE 3 GROUP 22

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27 ITEM 5(a) REVENUE AND CAPITAL BUDGET MONITORING REPORT - TO END OF JANUARY 2015 Responsible Cabinet Member: Councillor Middleton, (Cabinet member for Resources and Commercialism) Report Sponsors: Tim Hannam (Corporate Director Resources) Nicole Jones (Service Director [Finance and Resources]) Report Author: Nicole Jones (Service Director [Finance and Resources]) Executive Summary: This report advises Cabinet of the forecast outturn position for the General Fund; Housing Revenue Account (HRA) and Dedicated Schools Grant. The General Fund revenue forecast outturn is an overspend of 0.907m (a decrease in the overspend of ( 0.237m) since P9). The Dedicated Schools Grant is reporting a forecast overspend of 0.414m against budget (an increase in overspend of 0.025m since P9). The projected HRA balance at March 2015 is forecast to be ( 4,640k) compared to a budget of ( 4,569k) (no change from period 9). The Capital Programme is forecasting an outturn of m resulting in an overall net variance of ( m) against the latest Spend Approval. This figure includes forecast re-phasing of ( m) bringing the position to a net underspend of ( 0.974m). 1. Recommendation(s) 1.1 That the forecast outturn position of 0.907m and the management actions currently underway to mitigate this position be noted. 1.2 That the projected outturn for the 2014/15 capital programme be noted. 2. Corporate Management Team (CMT) view on Forecast Position 2.1 The current forecast overspend is a concern to CMT, however the overspend has reduced over the last month, due to ongoing work to identify opportunities for cost reduction. The forecast overspend is largely caused by a greater than expected increase in demand for social care services (for both children and adults), but there are also other budget pressures across a number of service groups. The increase in demand for social care services creates an impact on both the current year s budget and the Budget for 2015/ There are a number of management actions currently being undertaken to mitigate and address the forecast financial pressures. All services are still looking to reduce any remaining discretionary spending in order to reduce the forecast overspend. However, it is likely that the management action will not result in the overspend being eliminated by the end of the financial year. 3. General Fund Revenue Outturn Monitor 3.1 Table 1 below shows the forecast revenue outturn figures as at the end of January 2015 as being an overspend of 0.907m against the budget. C ITEM 11 9 MARCH 2015 PAGE 1 23

28 Table 1: Forecast as at January 2015 Forecast Projected Movement Budget Outturn Variation from P9 '000 '000 ' Integrated Support & Social Care 38,207 38, (106) Education, Effectiveness Participation 14,566 14, (24) Community Facilities 8,241 8, Adult Social Care & Health 61,359 61, (68) Public Health 8,852 8, Housing & Community 1,815 1,715 (100) 36 Resources: Finance, HR & Governance 8,714 8,419 (295) 44 Resources: Public Access (1,955) (1,445) 510 (76) Public Realm 39,092 39, (4) Corporate Core (101) (70) Planning & Transport Net Operating Expenditure 180, ,895 1,507 (237) Debt Financing and Interest 18,788 18,488 (300) 0 Sustainability Items, levies and one off pressures 8,049 8, Asset Rentals (16,024) (16,024) 0 0 Forecast Outturn position 191, ,408 1,207 (237) Revenue Support Grant (49,910) (49,910) 0 0 Retained Business Rates (42,242) (42,242) 0 0 Council Tax (87,007) (87,007) 0 0 Public Health Grant (8,788) (8,788) 0 0 Central Education Grant (3,254) (3,554) (300) 0 Total Resources available (191,201) (191,501) (300) 0 Net (Addition)/Reduction (237) Main movements since Period The main movement in period 10, is a reduction in the forecast overspend in Integrated Support and Social Care largely due to achieving a change in placement for one young person from a high cost residential placement to a lower cost placement. Significant Revenue Variances 3.3 Integrated Support and Social Care is currently reporting an overall overspend of 573k against budget including the underspend reported in paragraph 3.2 above. 24 PAGE 2

29 The overspend is mainly due to an increase in numbers and complexity of care needs of children resulting in an overspend in short and long term, permanent and residential placements by 2,974k. This overspend is partially offset by contributions from the Children s Demand Led Reserve ( 780k) and other one off resources ( 1,325k). 3.4 The Integrated Support and Social Care service is undertaking a number of management actions to contain further additional demand pressures, the impact of actions will also support future financial years. These actions include: An increased focus (where appropriate) of moving young people on from residential placements. Work with other regional Local Authorities to develop the market to provide cost effective residential placements for young people with very high needs. Measures to increase foster carers approved to care for adolescents by supporting current carers to develop their skills to cover this age range. Developing a long-term support and intervention programme for young people that have been in care for several years. 3.5 Education, Effectiveness and Participation is reporting a forecast overspend of 145k against budget. The key variations include: A pressure relating to additional home to school transport routes due to demographic increase in pupil numbers in main stream special schools 879k. This pressure has been partially offset by a contribution from the Children s Demand Led Reserve ( 650k). Ways of reducing costs are being implemented, including new contracts and promoting the payment of mileage to parents; An overspend on the Community Language Service due to a loss of business to alternative providers 84k. A full review of the service and how or if this service is to continue in the future is currently being undertaken, this is unlikely to alter this year s outturn; Salary savings due to vacancies within the Service ( 146k). 3.6 Community Facilities is reporting an overspend of 132k against budget. This is mainly due to a saving through externalising the management of the leisure assets, no longer being achievable in 2014/15, due to delays in re-commissioning the assets 77k. Work has restarted on the tender process and the saving will be achieved in 2015/ Adult Social Care & Health is reporting a forecast overspend of 406k compared to budget. The key variations include: External Residential and Supported Living and external Domiciliary Care overspends for people with learning disabilities as a result of increased costs for existing packages and an increase in new clients 1,628k offset by a drawdown from the Adult Social Care Demand Led Reserve ( 1,418k); Elderly Mental Health Residential & Nursing placements additional placements above the numbers within the budget 494k and External Domiciliary Care overspent by 164k, currently offset by increased Frail Elderly client income ( 281k) and a drawdown from Demand Led Reserve ( 316k); 25 PAGE 3

30 Pooled budget overspend due to increasing demand across the service as a result of additional home equipment required 326k; A saving from Section 256 ( 300k) as the fund is allocated to existing services. 3.8 The management actions within Adult Social Care & Health to be undertaken to reduce this reported overspend are: Reviewing learning disability residential placements to determine if in house teams could deliver aspects of the service to reduce costs; Reviewing and ensuring all Residential and Supporting Living care package proposals are within range of the Care Fund Calculator workings; Reviewing and challenging the outcome of continuing health care decisions; A review of agency pressures due to staff absence is also underway. 3.9 Housing & Community is reporting a forecast underspend of ( 100k) at period 10. This is due to an improved position in the Private Sector Lettings (PSL) scheme caused by lower than anticipated administration and maintenance costs ( 40k) and limited take up of homes in partnership (home bonds) incentives ( 40k). There has been an increase in demand for Bed & Breakfast homelessness placements and administrative costs based on the current levels of usage and strategies 428k, this overspend is currently offset by a drawdown from the B&B Demand Led Reserve ( 267k) Finance, HR & Governance is reporting a forecast underspend of ( 295k) at period 10. This is a result of salary savings due to vacancies within the service and recovery of housing benefit subsidy overpayments Public Access is reporting an overspend of 510k at period 10. This is due to a delay in achieving the savings planned from the Facilities Management review 274k. In addition, some of the savings expected from the Public Access Transformation project are not being realised due to process savings either falling in MKSP or having been used to offset other cost reduction savings elsewhere in the Council 280k. The Public Access programme is currently being reframed to focus on the highest impact services, as it is anticipated savings will be delivered in 2015/ Public Realm is reporting an overspend of 212k at period 10. The overspend is due to a shortfall in adoptions income as a result of delays in completion from developers 109k. The wettest winter on record followed by a hot/wet summer has led to additional costs in terms of fleet and staff to deliver extra landscaping work 511k. There are savings in Waste on the Serco collection and cleansing contract due to lower than anticipated inflation ( 576k). An increase in the maintenance requirements for street lighting has led to an overspend of 152k Corporate Core is reporting an underspend of ( 101k) at period 10. This is due to unfilled vacancies of ( 100k) There is an underspend of ( 300k) on debt financing as a result of rephasing of capital projects, resulting in a reduced contribution for loan repayments, known as Minimum Revenue Provision. 26 PAGE 4

31 3.15 There is an increase in the Council s grant allocation for the Education Service Grant Income in 2014/15 as there were fewer pupil transfers than originally anticipated ( 300k). Budget Savings 3.16 The 2014/15 Council budget included ( m) of savings and ( 1.267m) savings brought forward from 2013/14, which were still to be delivered. To date ( 9.740m) of the savings have been achieved, of the remaining savings ( 5.169m) are currently forecast to be delivered. The remaining ( 1.187m) of savings will either be delayed until 2015/16 or mitigated within the service areas. Budgeted Savings in 2014/15 and residual 2013/14 Savings Forecast to be delivered Forecast to be delivered in 2015/16 Undeliverable Savings Green Amber Red '000 '000 '000 '000 '000 Total (16,019) (14,260) (649) (190) (997) 3.17 The following significant savings will not be delivered for the following reasons: Community Facilities savings target of 75k from externalisation of major leisure assets will not be achieved in 2014/15 due to delays in the process. This saving is expected to be achieved in 2015/16. Housing and Community saving for the targeted reduction in the use of Bed & Breakfast accommodation for 100k will not be achieved in 2014/15 due to fewer numbers of private rentals. Public Access has a savings target of 50k for increased income as a result of better marketing and promotion, following the approval of a new sponsorship contract. Work is ongoing on the new contract so the saving will not be achieved in 2014/15. This will be rephased in line with the advertising project. Public Access project savings will not be achieved in 2014/15 270k, the refreshed programme will target significant channel shift opportunities and is expected to deliver these savings. Public Access Facilities Management review saving was expected to bring together staff and create corporate contracts for facilities management 450k. This has been partially achieved in year however 351k is no longer expected to be achieved in 2014/15. Education, Effectiveness and Participation, the Home to School transport service was meant to bring efficiencies. However the service has overspent due to an increase in pupil numbers, so will not achieve savings of 50k. Adult Social Care and Health savings (brought forward from 2013/14) for additional income from charging for learning disability respite care will not be achieved 60k. This is due to the eligible client base being smaller than expected. 27 PAGE 5

32 Impact on General Fund Balance 3.18 If the forecast outturn set out in Table 1 remains unchanged to the end of the financial year, the General Fund balance will be: Table 3: General Fund Balance 2014/15 Forecast Outturn '000 General Fund balance at 1st April 2014 (9,861) Budgeted transitional protection for those who use 200 Community Transport* Forecast overspend 907 Estimated General Fund Balance at 31 st March 2015 (8,754) *Agreed as part of the 2014/15 budget setting process. 4. Dedicated Schools Grant (DSG) 4.1 The Dedicated Schools Grant is a ring-fenced grant paid to local authorities and largely delegated to schools through their individual school budgets. The Governing bodies of schools are responsible for their income and expenditure and Dedicated Schools Grant is therefore not available to support the Council s General Fund. 4.2 The Dedicated Schools Grant is forecasting an overspend of 414k against central expenditure and income. This is an increase in the forecast overspend of 25k compared to a forecast overspend of 389k at period Overall the overspend is due to: Higher than anticipated need for top up funding 700k based on current level of payments and anticipated number of placements in special schools; an overspend of 893k for Other Local Authority (OLA) and private school placements within SEN & Disability provision will be overspent by 210k due to increased student levels. This is offset by reduction on equipment and School access budgets ( 216k). Pupil Growth is forecast to be overspent 561k due to increased housing activity. Expected underspend of ( 1,080k) on the two year old entitlements. The projection was initially for 1,459 two year olds, however due to a low uptake and time lag between referral and placements, the pupil forecast has decreased to 1,200 for the spring term resulting in this forecast underspend. 5. Housing Revenue Account (HRA) 5.1 The Housing Revenue Account is reporting a nil forecast position at the end of period 10. This includes a 1,400k revenue underspend within the HRA due to: Increased income as a result of new stock and reduced voids ( 100k) Reduced income due to major works rephasing 427k A reduction in provision for bad debt due to increased collection ( 350k) Savings in utility accounts ( 307k) and maintenance costs 28 PAGE 6

33 A reduction in capital charges ( 500k) 5.2 This underspend is offset by an increase in the contribution to capital investment, to fund major works and regeneration, by 1,400k. 5.3 The projected HRA balance at March 2015 is forecast to be ( 4,540k) compared to a budget of ( 4,569k). This continues to be in line with the Prudent Minimum HRA level of ( 4,500k), as confirmed in the 2014/15 Budget process. Table 3: HRA Outturn Summary 2014/15 Budget Period 10 Variance '000 '000 '000 Uncommitted reserve b/f (4,569) (4,640) (71) Net (surplus)/deficit in year Uncommitted reserve c/f (4,569) (4,640) (71) Prudent Minimum HRA level 29 PAGE 7

34 6. Capital 6.1 The forecast outturn is monitored against Spend Approval of At the end of January the forecast outturn is m, an overall variation of ( m) against the latest Spend Approval. This figure includes forecast re-phasing of m bringing the position to a net underspend of ( 0.974m). The major underspend is within Housing and Community where the funding will be returned to the Housing Revenue Account and allocated to future year schemes. No further funding is required outside of that allocated within the capital programme. Table 4: Summary of forecast capital expenditure as at 31 st January 2015 Service Group Latest Spend Approval Forecast Spend as at 31/01/15 Variation Over /(under) Spend Approval m m m Resources: Public Access (0.250) Adult Social Care & Health (0.010) Housing and Community: Housing (3.019) Housing and Community: Non Housing Children & Families: Integrated Support and Social Care (0.017) Children & Families: Education, Effectiveness and Participation (2.571) Community Facilities (0.506) Planning & Transport (4.106) Public Realm (0.574) Resources: Finance, HR & Governance Total (11.053) 6.2 The major underspends are: Stantonbury Fire Alarm, ( 131k), final phase tender price under original estimate, project complete with outstanding snagging items to take place over February half term school holiday period, funding will be returned to Education block. Priory Rise 1 Form of Entry, ( 233k), underspend relates to whole project, final alterations in 2014/15 now completed and final account agreed, funding will be returned to Education block. Domestic Heating, ( 304k), underspend due to reduction in current demand, funding will be returned to the Housing Revenue Account. Saints Estate Roofing, ( 108k), work underway with completion anticipated February 2015, funding will be returned to the Housing Revenue Account. 6.3 There are no projects identified as requiring any additional funding. 30 PAGE 8

35 6.4 The following schemes are subject to significant re-phasing. Priory Rise 1 Form of Entry, ( 200k), all work completed except boundary fencing works, which will be undertaken in conjunction with a future Tattenhoe Pavilion project. New Bradwell School Expansion, ( 325k), phase 2 running 16 weeks behind original plan due to planning and Sport England approvals, approvals now received and started on site early January Moorland Infant School Extension, ( 329k), contract has now been awarded and forecast now based on actual tender costs and agreed March 2015 start on site date. Shenley Brook End 2 Forms of Entry, ( 486k), planning application submitted, however traffic surveys need to be completed prior to validation, start on site delayed until March Stanton Low Country Park, ( 294k), hard landscaping and construction of neighbourhood play area will now commence in the drier Spring months. A421 Dual Carriageway and Kingston Roundabout, ( 3,273k), utility contractor has now completed diversion works, however it has delayed the main contractor work by 11 weeks, project still planned to complete summer Monkston and Brinklow V11 Improvements, ( 175k), initial design work starting later than planned, main project delivery planned to start in 2015/16. Wolverton Roofs and Finlochs, ( 610k), contractor has suffered delays starting on site, project to complete in 2015/16. Housing Windows and Doors, ( 599k), leaseholder project delayed due to ongoing leaseholder consultation and design issues with some of the blocks of flats, work will now start on site in April New Build at three garages sites Bletchley, ( 226k), contract awarded but start on site was delayed by two months to conclude planning process, work on site started and due to complete August All schemes have been assessed by Project Managers with regard to their RAG Status in relation to the following key criteria, Time, Cost, Scope and Benefits: RAG rating Green Green/ Amber Red/ Amber Red Definition All key criteria will be achieved. Risks are being actively managed One of the key criteria cannot be delivered within tolerance; project risks are being managed. Two or three of the key criteria cannot be delivered within tolerance. Risks need to be escalated All four key criteria cannot be delivered without further significant. Risks need to be escalated. No of Projects in Category PAGE 9

36 7. Implications 7.1 Policy The recommendations of this report are consistent with the Council s Medium Term Financial Plan. 7.2 Resources and Risk Where significant risks are known they are highlighted in this report. Capital implications are fully considered throughout the report. Revenue implications as a result of capital schemes are built into the Council s debt financing and other revenue budgets as appropriate through the Medium Term Planning process. 7.3 Carbon and Energy Management 7.4 Legal Y Capital Y Revenue N Accommodation N IT Y Medium Term Plan Y Asset Management All capital schemes consider Carbon and Energy Management implications at the capital appraisal stage before they are added to the capital programme. There are no further implications as a result of this report. Legal implications may arise in relation to specific capital schemes or revenue projects. In particular a capital scheme or revenue project may be needed to meet a specific legal requirement. These implications are addressed in the individual project appraisals. There are no significant legal implications arising as a result of this report. 7.5 Other implications All implications are outlined within the report. Y Equalities/Diversity Y Sustainability N Human Rights N E-Government N Stakeholders N Crime and Disorder N Carbon and Energy Management Background Papers: 2014/15 Revenue Budget and Capital Programme as approved by Council in February 2014 PAGE 10 32

37 ITEM 5(b) Budget Monitoring 10 Forecast Outturn 2014/15 Budget Review Group March

38 2014/15 Revenue Monitoring Summary Forecast Forecast overspend of 0.9m, as at end of January 2015 reported to Cabinet on 9 th March. 2014/15 Budget included savings of 14.8m, forecasts show; 13.7m on track for delivery ( 9m already achieved, 4.1m rated green) 0.2m of savings will be achieved in 2015/16 Also on track to deliver 1.2m of the 1.3m savings delayed from 2013/14 Dedicated Schools Grant forecast overspend of 0.4m, mainly as a result of unfunded pupil growth and pressures relating to high needs pupils Housing Revenue Account forecast on track with budget 2 34

39 Summary of General Fund Variances General Fund pressures are mainly as a result of Social Care; Children s Social Care - 0.5m Increase in the cost of Residential Placements, due to increases in children numbers and complexity of needs - 3m Offset by Demand Led Reserve / one-off funding - ( 2.1m) Adult Social Care - 0.4m Increased costs and numbers of Learning Disability service users requiring Residential Care / Supported Living - 1.6m Elderly Mental Health Residential & Nursing Placements - 0.4m Increase in Older Peoples Domiciliary Care hours - 0.2m Offset by Demand Led Reserve ( 1.7m) 3 35

40 Capital Programme Capital programme spend approval of 90m, current forecast variation of ( 11m) Forecast includes scheme re-phasing of 10m and an underspend of ( 1m). The main underspend relates to Housing, where the relevant funding will be reinvested into the Housing Revenue Account in future years. Current project status: RAG Rating Green Green/ Amber Red/Amber Red Total Period

41 Democratic Services ITEM 6(a) Budget Review Group Report November Budget Review Group Report November

42 Contents Introduction & Committee Membership 3 Review Group Summary 4 Acknowledgements 4 Executive Summary 5 Recommendations 6 Cross-Cutting Issues 9 1. Overall Strategy for Forming Budget 9 2. Demand-led Reserves Capability and Consistency of Entrepreneurial Approach Shared Services 12 Individual Service Groups 14 A. Finance, Governance and HR 14 B. Community Facilities 14 C. Education 15 D. Adult Social Care 15 E. Child Social Care and Integrated Support 17 F. Milton Keynes Development Partnership 18 G. Public Realm 19 H. Corporate Core 20 I. Planning & Transport 20 Specific Pressures 22 Annex A: Terms of Reference 24 Annex B: Additional Information

43 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 may be found at Annex A. For the Council year , BRG is composed of Councillors Ric Brackenbury, Margaret Burke, Stuart Burke, David Hosking, Peter Geary, David Lewis & Kevin Wilson. Elizabeth Richardson serves as the Overview and Scrutiny Officer. The purpose of this report is: (i) (ii) to outline the work BRG has carried out to scrutinise budget pressures on Service Groups, the policy context, key changes and the proposed strategies for dealing with these pressures. to present BRG recommendations to Cabinet so that they can be considered as part of the development of the budget and the Medium Term Financial Plan during November During October 2014 BRG held a series of focussed meetings where it met with and received presentations from Cabinet Members and 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). This report is the result of the BRG deliberations following its October Service Group meetings. Councillor Ric Brackenbury Chair, Budget Review Group November

44 Review Group Summary In addition to its standard work programme, BRG met four times in October 2014 and considered budget pressures on Service Groups as follows: Date Service Group 8 October 2014 Finance, Human Resources and Governance Education, Effectiveness and Participation Communities Facilities 20 October 2014 Adult Social Care and Health Integrated Support and Social Care 23 October 2014 Milton Keynes Development Partnership Public Realm, Corporate Core Planning and Transport 28 October 2014 Core Issues, Review and Write Up At the October meetings BRG asked officers and Cabinet Members 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 officers who assisted with preparing documents and presentations, and gave up their time to speak at the meetings, and their assistance in supplying supplementary information when requested to do so. In particular, BRG is grateful for the diligence and patience of Elizabeth Richardson in managing the committee through an intense workload, and for 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 chair would also like to thank Councillors M Burke and Hosking for their vital input and support as Vice-chairs. 40 4

45 Executive Summary This report is written at a time when the Council is having to find 22m of savings in the financial year, with the prospect of further austerity to come, whichever party wins the 2015 General Election. It would be easy to be despondent about the situation the Council finds itself in, and treat each budget-setting process as a survival exercise. However, BRG has heard and scrutinised strategies across all Council service groups which offer far more than this. There are efficiencies being made across the Council, such as through the Property Strategy. Innovative approaches such as the Public Access project are reducing costs and modernising how Council services are experienced. Milton Keynes Service Partnership and Milton Keynes Development Partnership are now embedded and delivering for the Council. Many entrepreneurial proposals for how the Council can respond and develop the market for its services are being developed, each service group taking responsibility for bringing projects forward. BRG has aimed to take a strategic approach to the issues it has reviewed, considering the most significant issues affecting a service group. In particular the pressures in Adult Social Care are such that we have given this service group closer scrutiny, with several recommendations (14-18) arising from this. The Cross-Cutting Issues section of this report covers issues which are relevant across multiple service groups or where an inconsistent approach has been revealed under scrutiny. The Individual Service Groups chapter offers comments on each of the presentations made to BRG about the financial environment each service group finds itself in, with the third discussing Individual Pressures where BRG feels it can add value. BRG has made recommendations where there is a lack of clarity around certain proposals or how decisions are made, where opportunities have been identified but are not being taken forward with sufficient priority, or where risks have been identified in making changes. BRG believes a draft budget taking heed of these recommendations will be all the stronger, and asks the administration to consider each one carefully in bringing their budget forward to Council. 41 5

46 Recommendations All recommendations are offered to the Cabinet in the hope that they will prove useful in forming the budget for the Council and to the Council and residents of Milton Keynes, that the wider issues raised may be properly considered, and for greater understanding of the financial environment the Council finds itself in. The context for each recommendation is covered in more detail in the following sections. 1: Publish figures comparing the percentage of the overall budget allocated to each service group in and : Include projected versions of these same figures in the MTFP documents up to : Make efforts to secure cross-party support for the structure and scope of services to be provided in This may work best through group leader discussions at first. 4: State clearly the key political principles used to form the draft budget. 5: Continue the use of demand-led reserves. 6: Challenge the robustness of all estimates for demand-led reserves, and ensure that these reserves are no greater than necessary to mitigate the risk that volatile demand poses. 7: Produce an overall strategy for how we will deliver an entrepreneurial Council. This may take time to put together, but should be detailed enough to include specific services being marketed across the MTFP period, and how corporately we will manage this process for individual services. 8: Identify the priority areas for traded services in terms of the greatest potential return on investment, at the expense of others as required. Quickly filter out ideas which have insurmountable barriers to delivery. 9: Provide the investment needed in advice, assistance and expertise to these priority areas as they build up business cases and implement when robust. 10: Seek tactical opportunities for shared services where we have a small (less than five full time equivalents) officer team responsible for a Council function, and seek dialogue at political level with neighbouring authorities about covering absences and trialling a shared approach. 42 6

47 11: Increase the pace towards self-service provision in Council libraries. 12: Review usage of library property to analyse opportunity for co-location of services (ie long-term leasing) or for individual hiring of space. 13: Do not risk losing service coverage by increasing fees in Governor Services to an extent which would cause Governing Bodies to consider whether to continue purchasing the service. 14: Seek joint negotiation with neighbouring authorities on commissioned services such as care homes and supported accommodation. 15: Obtain a full understanding of the marketplace before taking steps to put downward pressures on provider profits. 16: Prioritise the marketing of Home Care Services, providing all necessary support to the ongoing review and making this a flagship proposal in the entrepreneurial strategy. 17: Treat those adult (and child) social care prevention services which are shown to be providing value for money in saving future statutory care costs, as if they were statutory themselves. 18: Impose strict monitoring conditions on any downgrading of doublehanded care packages to single-handed ones, and consider whether this review is an effective way of controlling cost. 19: Adopt a sampling approach to tracking demand, taking figures from a number of days across the year, and extrapolating to calculate trends. 20: Secure cross-party agreement on the long-term business plan for the Milton Keynes Development Partnership, in terms of the balance between generating income in the short term through disposal of land and long-term sustainability. 21: Prioritise mitigation against energy price inflation across the Public Realm service group. This includes advancing plans for a Combined Heat and Power network in Central Milton Keynes. 22: Challenge the figures for insurance claims when provided to justify both the need for the pressure in and the confidence that this is under control across the authority. 43 7

48 23: Safeguard information gathering and monitoring services which provide vital information for the wider Council. 24: Obtain details of anticipated savings before making any proposals to increase delegation of planning decisions to officers. 25: Review the capability of the road safety team in terms of whether Member expectations can be met with available resource. 26: Review the criteria for providing polling districts in urban wards, and aim for a consistent approach within and between wards. Cost of venue hire may be a relevant factor in making decisions on polling station provision. Resist the element of this pressure relating to polling stations until the need is clearly evidenced. 27: Consider the merits of moving to all-out elections. This will require political discussions as well as consultation with the residents of Milton Keynes as this is not just a financial decision. 28: Respond to the Government consultation on Local Welfare provision with examples of how this fund has had a positive impact in Milton Keynes, and the need for it to continue. 29: Review options for Bletchley Library including location and any opportunities to co-locate with other Council services. 44 8

49 Cross-Cutting Issues Before discussing issues specific to service groups, a number of issues have emerged from meetings which affect the Council as a whole, and they are considered here in detail: 1. Overall Strategy for Forming Budget BRG was informed that the administration has been compiling its budget by considering individual savings proposals put forward by officers, then deciding which are acceptable. BRG is concerned that this is not a sufficiently strategic approach. Beyond the welcome principle of protecting the vulnerable (later expanded in discussions to increasing budget share for child and adult social care) it has been hard to understand the policies underpinning the acceptance / rejection of various proposals. While much of the direction of travel is set through the Medium Term Financial Plan (MTFP,) BRG feels that greater clarification of the administration s political priorities will aid both the Cabinet in considering individual savings proposals, and the BRG in assessing how closely the budget reflects these priorities. No evidence has been submitted that Members have put forward ideas themselves (perhaps this will come in time, with the current administration going through this process for the first time) and no sense was given that certain areas should be protected from cuts above others until very late in discussions. BRG welcomes the administration s reflections on how the budget setting process might be improved next year should the administration remain in place, particularly the more strategic approach of agreeing a vision for the Council s services in 2020 (roughly the current MTFP period) and then working back to see what this means for the current year budget setting process. BRG has offered to act as a cross-party sounding board for significant changes where the administration will find this useful. Recommendation 1: Publish figures comparing the percentage of the overall budget allocated to each service group in and Reason to provide clarity around which areas are being expected to shoulder the greatest burden of savings, and give greater awareness to councillors and residents of where the bulk of Council spend is. 45 9

50 Recommendation 2: Include projected versions of these same figures in the MTFP documents up to Reason to provide a clear link between single year budgets and the medium term position, and allow a clear understanding of the transformation needed within this period. Recommendation 3: Make efforts to secure cross-party support for the structure and scope of services to be provided in This may work best through group leader discussions at first. Reason to ensure the smoothest possible passage of significant changes, to understand where there is common ground and where agreement will not be possible, and to future-proof for potential changes in administration. Recommendation 4: State clearly the key political principles used to form the draft budget. Reason to assist the BRG in scrutinising how successful the administration has been at embedding its principles and priorities in the draft budget. 2. Demand-led Reserves The Council holds three demand-led reserves: one-off funding to manage volatile demand in the areas of adult care services, child social care, and homelessness. They are rolled forward if unused, however this year, two of them are projected to be used up within in (both social care reserves.) This creates two separate pressures in Firstly, to increase the base budget to the actual figure this year, and then to restore the reserve. BRG recognises that these are areas of the Council where demand is hard to predict, and a small increase in demand creates disproportionate cost (eg individual care packages costing 200k pa) but believes that the whole budget-setting process involves putting estimated values on unknown costs BRG took time to discuss the exceptional treatment for these three areas. The reserves in adult social care are roughly 3% of the overall cost, and the overall level of reserves proposed in the final budget will have to be signed off as acceptable. BRG has discussed whether these demand-led reserves would be better moved into base budgets (to reduce the double pressure when they are used up) or whether they would be better combined so the overall totals 46 10

51 held can be lower, reflecting the reduced risk of all three areas experiencing simultaneous surges in demand. However the first approach would require increased savings which may then not be needed within the year, and the second approach would reduce accountability within each business area to manage their costs. Recommendation 5: Continue the use of demand-led reserves. Reason to avoid cost pressures appearing in the base budget (rather than one-off) until they are incurred. There are persuasive drawbacks to other approaches. Recommendation 6: Challenge the robustness of all estimates for demand-led reserves, and ensure that these reserves are no greater than necessary to mitigate the risk that volatile demand poses. Reason - given the significant amounts involved, and the competing alternative uses for the money, holding excessive funds in demand-led reserves may not represent value for money. 3. Capability and Consistency of Entrepreneurial Approach Most of the service groups who have presented to the BRG have had ideas about what taking an entrepreneurial approach would mean to them. Some will involve selling an existing service to a wider client base, others involve selling a combined service comprising a chargeable one alongside a statutory one. Others will focus more on alternative service provision and working across local authority areas. The BRG supports the administration s desire to become an entrepreneurial Council. Given the pressure that service delivery teams are under, BRG believes an overall strategy and investment in advice and assistance is needed to make this approach a reality, in terms of business development, services to be offered, marketing, recruitment, and internal transitions such as any need to operate out of Milton Keynes Service Partnership when offering a traded service. However few of the service groups seemed to have clear ideas of how to put their ideas into action. The Chief Executive s presentation on this issue began to map out the approach that would be taken to evaluate proposals and deliver this approach, but BRG was concerned about the use of the word commercialism to describe the changes proposed believing that entrepreneurialism is more about creating new and innovative business opportunities. BRG was pleased however to see recognition of the flexibility that would be needed to deliver such varied proposals

52 BRG also noted the Corporate Core service group s commitment to only seek projects which would deliver significant returns. BRG feels this is the right approach at the moment across the whole Council, although ideas which will start small, build a reputation, and grow into substantial businesses should not be dismissed. Recommendation 7: Produce an overall strategy for how we will deliver an entrepreneurial Council. This may take time to put together, but should be detailed enough to include specific services being marketed across the MTFP period, and how corporately we will manage this process for individual services. Reason - to give greater clarity to how the large number of ideas coming forward will be sifted through, where the priority areas will be, and to consider the resourcing implications. Recommendation 8: Identify the priority areas for traded services in terms of the greatest potential return on investment, at the expense of others as required. Quickly filter out ideas which have insurmountable barriers to delivery. Reason Even with investment in business development resource and advice, the Council will not be able to deliver every good idea. Clear prioritisation is needed. Recommendation 9: Provide the investment needed in advice, assistance and expertise to these priority areas as they build up business cases and implement when robust. Reason Service management teams are in the best position to deliver new opportunities, but few have convinced the BRG they are in a position of having the business development and marketing resource in place to deliver. 4. Shared Services BRG has heard some examples of shared services becoming reality; notably in low volume high cost areas such as secure residential places for young people. However, it is clear that this is the exception at the moment, and a number of discussions with other authorities have produced little result. BRG was concerned about the suggestion that only the Leader of the Council could negotiate with other authorities about sharing services; while political buy-in is vital we need to establish ways of opening and conducting negotiations with potential partners. BRG believes that a firmer 48 12

53 approach is needed in this area and general support in principle is not enough to deliver a breakthrough in how we work with other authorities. There are different models of shared service, with examples such as: We buy in a service from a neighbouring authority They buy it from us We negotiate collectively with other authorities for a better deal from private providers (eg care homes) We have a single management of officers at more than one authority We have a single pooled officer team across more than one authority. While only the final example is a conventional, fully shared service, involving alignment of systems, processes, personnel and management, the others all have merit. If the Council is finding it difficult to get agreement on fully shared services, we should seek smaller opportunities to establish the principles and working relationships, and seek larger opportunities from there. While the benefits in sharing larger departments are greater, we may need a more patient approach. BRG accepts that an overall strategy is not what is needed here; rather a willingness to take opportunities as they arise and to knock on open doors, such as hard to recruit to roles. Examples such as the sharing of the Director of Public Health role, and the Buckinghamshire (archaeological) small finds officer working in Milton Keynes one day a week rather than the Council providing a part-time cover directly show what is possible. There is also an advantage of resilience in sharing some of our smallest services. Where we only have a small number of officers responsible for a service, we risk a break in service due to sickness or holiday leave. However where a small team is shared across authorities, there is a level of cover available that would not be possible within a single authority. This gives an added benefit which may be persuasive in negotiation. Recommendation 10: Seek tactical opportunities for shared services where we have a small (less than five full time equivalents) officer team responsible for a Council function, and seek dialogue at political level with neighbouring authorities about covering absences and trialling a shared approach. Reason both a willingness to exploit opportunities at short notice and political will and leadership are vital if we are to form agreement to share services on any of the models available

54 Individual Service Groups BRG offers the following comments on each of the service groups that gave a presentation, in the order that each appeared. This report does not list all the pressures for each one (the next section details where BRG wishes to comment or challenge individual pressures) but instead outlines BRG s understanding of the service and the financial environment in which it operates. 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 service group strategy and proposals. A. Finance, Governance and HR BRG sees the Property Strategy as significant. BRG supports the move from Saxon Court to the Civic Offices, noting the savings through not having to travel externally for meetings and the opportunities for crossdepartmental communication. There is an option of moving out of the Civic Offices to cheaper facilities in Milton Keynes, but the likely alternative use would be retail and the market is not strong at present. There would also be a loss of civic identity if any new premises were far from the centre. B. Community Facilities It was acknowledged that this was one of the service groups to have shrunk by the greatest amount (over 40%) due to budget pressures, as there was a greater proportion of non-statutory services. BRG felt that there was untapped potential in libraries. Self-service has become the norm in supermarkets, and in time it should become so in libraries. This will improve quality of service and present savings (after potential one-off spend for equipment.) There are also opportunities for effective use of space. Where a library has more space than it requires, there are opportunities for colocation of services (both within the Council and outside, such as parish offices, the police, GPs etc) and also for external hire of meeting rooms. There are specific comments on Bletchley Library in the next section Recommendation 11: Increase the pace towards self-service provision in Council libraries. Reason there are cost savings here, and the principle of self-service facilities has been firmly established through supermarkets in recent years

55 Recommendation 12: Review usage of library property to analyse opportunity for co-location of services (ie long-term leasing) or for individual hiring of space. Reason not only cost savings but increased footfall into libraries which would resemble community hubs more closely. C. Education BRG discussed what the Council s response would be to failing academies. There would be no responsibility (or money) to deal with them, and in practice we would know about difficulties as they emerged, with a fallback position of reverting to local authority control before the Council was able to intervene. BRG was concerned about the risks of raising fees in Governor Services there is 85% coverage at present, and this ensures that the Council maintains high quality of service, and ensures the Council is aware of and involved at some level with ongoing issues and decisions the Governing Body is facing. The most significant pressure is the availability of school places. The Council held a member workshop on 29 th October to discuss the issues and strategies in managing school admissions. Recommendation 13: Do not risk losing service coverage by increasing fees in Governor Services to an extent which would cause Governing Bodies to consider whether to continue purchasing the service. Reason the value added by having the Council provide Governor Services to schools is wider in educational terms than a simple financial sum. D. Adult Social Care Over 90% of the service is statutory so any savings have to be made from increased efficiency rather than cutting services. The pressures in this service group dwarf all others without obvious mitigation methods. In particular, the demand-led reserve for adult social care is forecast to be spent this year, requiring an increase in base budget for as well as replenishing the demand-led reserve (in anticipation of further increases in demand). The new Service Director has her work cut out in managing this area of the Council s work given the scale of the pressures and forecast demand

56 BRG believes that opportunities should be taken to negotiate jointly with neighbouring authorities on eg care home places and costs, as the same services will be procured from a limited number of providers, and this is likely to increase engagement with the marketplace. The administration has expressed a desire to find savings in restricting operator profits. The BRG does not necessarily oppose this where profits are disproportionate, but urges the administration to gain a full understanding of provider business models before acting on this; Westlands care home in Olney has recently closed down, and if we offer beneath market rates we may find places are offered to other authorities. Out of all the entrepreneurial proposals the BRG heard, the possibility of marketing home care services to fee-payers (at present we only provide the service to those who qualify for Council-paid care) seemed to have the greatest potential, in terms of volume of service, the Council s understanding of the marketplace, and the potential returns involved. The BRG urges for this to be given priority in putting together the proposed strategy for becoming an entrepreneurial Council, although believes that business development and marketing support will be needed to deliver this. BRG supports the vital review in this area being undertaken by the new Service Director. BRG is concerned that prevention services may be cut back as they are not statutory, unlike direct care services. Where prevention services are demonstrably providing value for money in reducing future care costs, they should be seen as just as important as the statutory services. Of course, there are many non-financial benefits from preventing future acute care needs. BRG supports many of the proposed mechanisms for controlling costs, such as using a Care Funding Calculator and making good use of the Better Care Fund. However the proposal to review double-handed packages (where two carers are required to perform certain tasks) drew concern. While BRG was assured that quality of care would be maintained, strict monitoring will be required. Recommendation 14: Seek joint negotiation with neighbouring authorities on commissioned services such as care homes and supported accommodation. Reason economies of scale and greater understanding of future availability and pressures on limited available resources. Recommendation 15: Obtain a full understanding of the marketplace before taking steps to put downward pressures on provider profits

57 Reason what seems an excessive profit or healthy business at first glance may turn out to be far from the case. There are risks in losing business to other commissioners continuing to pay market rates, and provider failure with knock-on costs to the Council. Recommendation 16: Prioritise the marketing of Home Care Services, providing all necessary support to the ongoing review and making this a flagship proposal in the entrepreneurial strategy. Reason the Council is an established provider with a good reputation, this would be a high volume, high cost service, with an increasing market. Recommendation 17: Treat those adult (and child) social care prevention services which are shown to be providing value for money in saving future statutory care costs, as if they were statutory themselves. Reason the future pressures on both adult and child social care are so significant that we must prioritise anything that mitigates these. Recommendation 18: Impose strict monitoring conditions on any downgrading of double-handed care packages to single-handed ones, and consider whether this review is an effective way of controlling cost. Reason a double-handed package will not be agreed unless it is seen as needed for a client s care, and BRG is concerned that if care tasks are then allocated to a single carer, some tasks will simply not be done. E. Child Social Care and Integrated Support BRG found the presentation given on child social care comprehensive and impressive. The figures and financial environment were clearly outlined, and this service group has made more progress than most with sharing services (eg Family Drug & Alcohol Court with Bucks, jointly procuring beds, foster carers being offered children from outside Milton Keynes.) The Council has become a victim of its own success, with the high reputation of special schools pulling those with complex needs to Milton Keynes, creating a significant pressure on child social care (and later on adult social care.) BRG s only concern is over how demand projections are calculated; these are high cost low volume, so costs are volatile (requiring a demand led reserve.) Future budget requirements are calculated using figures from a single day, which is felt to be typical

58 Recommendation 19: Adopt a sampling approach to tracking demand, taking figures from a number of days across the year, and extrapolating to calculate trends. Reason eliminates any conscious or unconscious bias in the estimating method. Using information across the whole year should mitigate peaks and troughs in the demand. Recommendation 17 also applies to child social care. F. Milton Keynes Development Partnership (MKDP) MKDP has now completed its first full year of operation, managing the previously Homes and Communities Agency-owned land which came across to the Council. BRG was pleased to hear of the 227k surplus in the first year of operation, but from onwards, MKDP will become responsible for paying off the 32m debt taken for the land assets, so needs to have sufficient cash balances to make payment. BRG noted the cross-party representation on the MKDP board and felt this was vital to ensure that the best decisions were taken for Milton Keynes and not just for the maximum financial gain. It is easy to say that Best Economic and Social Consideration will be used when making decisions about sites, but it is how this is applied in practice that matters. There are strategic decisions ahead about whether to sell a large number of sites (generating cash in the short term, but with less long term income) or to invest in the asset base and hold them for rent (less upfront but a more sustainable income in the long term) all in the context of repaying the initial loan for the sites. BRG did not have sufficient time in its discussions to make a recommendation on this balance but felt this needs to be agreed on a cross-party basis. Recommendation 20: Secure cross-party agreement on the long-term business plan for MKDP, in terms of the balance between generating income in the short term through disposal of land and long-term sustainability. Reason to protect MKDP from future changes in administration and to ensure clarity of vision and strategy for MKDP

59 G. Public Realm BRG heard from the Cabinet Member for this service group, but he was unsupported by Council officers. This was the only area without officer support: while the immediate reason was illness, BRG was disappointed that no cover could be arranged, and congratulates Councillor Legg on his efforts to answer its questions when officers would have been better placed to do so. BRG was told that the most significant pressure was energy price inflation, including within contracts, and that mitigation not possible. BRG does not accept this. There are many ways of mitigating against energy price inflation such as through self-generation, reducing energy usage, sharing risks within contracts, and buying in bulk in advance, including in partnership with other authorities. The long term plans such as a combined heat and power network for CMK should be progressed with more urgency although BRG queried whether the development resource for this project was in place. BRG heard outlines for potential combined services around the coroner and bereavement services and supported these; they seemed well thought through and deliverable. BRG asked for further details of the statement that insurance claims against the authority were reducing; this sat awkwardly with the stated pressures on insurance reserves, and at the time of writing this information has not been received. BRG was also concerned about the difficulties in recruiting to posts within this service group, requiring market supplements. Recommendation 21: Prioritise mitigation against energy price inflation across the Public Realm service group. This includes advancing plans for a Combined Heat and Power network in Central Milton Keynes. Reason BRG does not accept that energy price inflation is simply something that happens to the Council, but believes a strategic and intentional approach is needed to put appropriate measures in place. Recommendation 22: Challenge the figures for insurance claims when provided to justify both the need for the pressure in and the confidence that this is under control across the authority. Reason no evidence seen for either claim at present

60 H. Corporate Core This service group has already experienced 40% cost savings. BRG saw the remaining functions of data gathering and performance monitoring as vital. BRG agreed with the stated intent of marketing services only where significant returns were anticipated, as long as this measured both longterm potential as well as the short-term market. Recommendation 23: Safeguard information gathering and monitoring services which provide vital information for the wider Council. Reason the disproportionate impact of removing further services here on the rest of the Council. I. Planning & Transport In the year, additional planning resource was added to the budget, as the statistics for making decisions on planning applications were considerably behind targets. The situation has improved, but these posts are not funded beyond They are currently funded from fee income, but should this decrease and the posts be lost, there is a risk that the Council would fall behind targets once more. BRG heard that development control was not far from being self-financing, but that money was lost on the smallest applications where the application fees did not cover the costs. It was noted that increasing permitted development rights for smaller applications (eg Houses in Multiple Occupancy, office to residential conversions) would reduce numbers of applications which had a net cost to the Council to process. BRG supported the principle of development control being cost-neutral to the Council, however it was concerned at suggestions that this would be achieved through increased delegation to officers, by increasing thresholds for decisions on applications to come to panel / committee. BRG did not see any estimates for the savings such increases would generate, and would need to see these before supporting such a move. Reports would still need to be written and evidence gathered; the main savings would come from the opportunity cost of officer time in meetings that could be used elsewhere. On transport matters, BRG queried whether we were getting value for money from our spend on the canal project, but recognised that the Council had entered into a commitment to fund this, and the amounts involved were small in relation to the overall budget. BRG was concerned about the reduction in the size of the road safety team from 11 full time equivalent 56 20

61 officers to 3, and sought reassurances that this team still had sufficient resource to carry out its function to Member expectations. Recommendation 24: Obtain details of anticipated savings before making any proposals to increase delegation of planning decisions to officers. Reason BRG places a high value on Member input into the decisionmaking process, and is concerned that potential savings may be small in comparison to the loss of democratic input. Recommendation 25: Review the capability of the road safety team in terms of whether Member expectations can be met with available resource. Reason BRG was concerned that the savings already made here in recent years had left a team struggling to cope with the demand for highways safety improvements across the borough

62 Specific Pressures This section highlights the specific costs that the Council will incur, just to provide the same level of service next year as in All references here relate to the numbers supplied on the attachments considered in the BRG meetings. Pressures are only referred to where we have points to raise not covered above, and BRG has focussed on larger items due to their greater significance in the budget setting process. P1: 22k rising to 44k for election costs. BRG is uncomfortable that the Council will be spending more on elections at a time of such restraint. There is a perception of an inconsistent approach to polling stations across the Council wards often based on polling districts which are somewhat arbitrary, rather than criteria such as number of electors, maximum distance to travel, and accessibility. However part of this pressure is due to the fact that all wards are up for election three years out of every four, and there is little mitigation of the extra costs incurred as a result. Were the Council to move to all-out elections every four years this would generate a significant saving, however BRG notes that there are political as well as financial considerations and at least one group has a policy of supporting the current system of elections in thirds. Recommendation 26: Review the criteria for providing polling districts in urban wards, and aim for a consistent approach within and between wards. Cost of venue hire may be a relevant factor in making decisions on polling station provision. Resist the element of this pressure relating to polling stations until the need is clearly evidenced. Reason to ensure that all money spent on elections is justified. Recommendation 27: Consider the merits of moving to all-out elections. This will require political discussions as well as consultation with the residents of Milton Keynes as this is not just a financial decision. Reason - there would be substantial cost savings, there is less potential for unpopular decisions to be deferred when elections are further away, and greater stability of administrations

63 P6: 250k for local welfare fund provision. Discretionary funding for those in crisis is being stopped by the Government, and BRG supports the administration s plans to continue to provide support for vulnerable people locally. However the Government has just launched a consultation on whether to continue with Local Welfare Fund provision. Should the Government change policy, additional Government funding for this administration priority may be available. Recommendation 28: Respond to the Government consultation on Local Welfare provision with examples of how this fund has had a positive impact in Milton Keynes, and the need for it to continue. P23: Withdrawal of savings planned at Bletchley Library Although Bletchley Library has been removed from the Community Asset Transfer Programme, BRG has concerns about its location and usage, and wishes to highlight the need for a deliverable plan for its future. Recommendation 29: Review options for Bletchley Library including location and any opportunities to co-locate with other Council services

64 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

65 Annex B: Additional Information BRG requested additional information during the course of its deliberations; recommendations 19, 22 and 24 refer directly to these requests. At the time of writing only the first query has received a response, published in full here. 1. Information on why figures from a single day were used to estimate future child social care costs. When reviewing the cost of placements to decide how much should be in the budget for next year we did not wish to rely on a single estimate. We looked at the issue from a number of different perspectives. 1. We looked at the outturn position for 2013/14 which was an overspend of 0.92m. However, we also knew that there was a large increase in the overall care numbers during the year, from 282 on 1/4/13 to 305 on 31/3/14. So this figure was likely to be too low as an estimate for the budget required in 2015/ We looked at the latest forecast outturn position for 2014/15 which was an overspend of 1.69m as at period 5 and excluding any offsetting use of demand led reserve and grants. However, we also knew that there were costs of about 200k in 2014/15 that would not reoccur in future years. Also that had been a large amount of turbulence during the first few months of the year which has just started to settle down, so it would be preferable to use a later period forecast which is likely to be more accurate. Also the later in the year the estimate is taken the more accurate the figures are as we know where the children have been placed in the first part of the year. 3. The snap shot was a way of trying to valid the data that we already had. We picked 2 nd October, which after talking to practitioners felt like a fairly typical day. We recorded the day rate of every child in a placement on that day and then multiplied it by 365 days and compared this cost to the current budget. This gave an estimated budget deficit of 1.26m 4. We will continue to monitor the placement costs of every child and forecast their likely costs to the end of the year. This will be reflected in the future forecast outturn position in the budget monitoring reports. If there are any significant changes that we believe are likely to have on-going impact these will be built into the budget proposals before it is finalised in February. 5. For children who are in a stable placement it would be possible to forecast their costs in 2015/16. However, there are a significant number of other children that could be moving into placements, moving from fostering to adoption or returning home where predicting costs would be extremely difficult. 2. Comparative information on social care costs / charges in other local authorities. 3. Information on potential savings from additional delegated powers to officers to determine planning applications. 4. Insurance claim data to validate that the long-term trend is decreasing but that a further one-off pressure is required in

66 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

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

68 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

69 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

70 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 66 4

71 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. 67 5

72 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. 68 6

73 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 69 7

74 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. 70 8

75 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. 71 9

76 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 72 10

77 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 73 11

78 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

79 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

80 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 76 14

81 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

82 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 78 16

83 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

84 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 80 18

85 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 81 19

86 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

87 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; 83 21

88 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

89 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 85 23

90 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

91 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

92 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 88 26

93 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

94 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

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96 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