Agenda item

Resolved: that the report be noted. The Committee also agreed to thank officers for their work.

4.1       David Austin introduced the report, the following key points were noted:

·         The Council was on a journey of austerity, which began in 2010. This would last until 2020 and most likely it would continue into the mid-2020s because of the current direction being pursued by the Government.

·         Not only was the financial position difficult, there was also a high level of uncertainty around policy, as noted in the medium term financial strategy in July.

·         The potential uncertainties and pressures included: the Government’s intention that local government should become self-financing; variations around the level of council tax funding and funding for adult social care as well as changes to the improved Better Care Fund and the risk of retrospective adjustments to the New Homes Bonus.

·         Information was awaited about the plans for fair funding.

·         There was a major programme of health and social care integration, which was liable to change rapidly.

·         There were also restraints around borrowing, which might constrain some of what the Council could do.

·         The ongoing welfare reforms and the roll out of universal credit also presented potential future issues.

·         At the regional level there was the uncertainty around business rates pooling as well as the possible implications for London’s economy of the UK’s exit from the European Union as well as future changes to London’s demographics.

·         The savings target for 2018-19 was £22m and based on the projections in the medium term financial strategy the estimation was that £10m a year would be required after that.

·         If savings were not made in one year, the Council had to use reserves to meet the gap, however – the savings still needed to be made in the following year.

·         It was predicted that there would be a £13m overspend at the end of 2017-18 of which £7m was unachieved savings.

·         Adding new savings proposals to an overspend and to unachieved savings was not feasible. The current plan was to consolidate the Council’s position and to achieve the savings that had already been put forward in previous years.

4.2      David Austin, Janet Senior and Selwyn Thompson responded to questions from the Committee, the following key points were noted:

·         The Council had used reserves to set a balanced budget for three years.

·         There were a number of factors which would affect how long the Council could sustain itself whilst using reserves.

·         The majority of the Council’s existing reserves were allocated to specific commitments and projects. The Council should make it through next year using the reserves but beyond that it would become increasingly challenging.

·         There might be difficult decisions to be made about the level of services that could be delivered.

·         The current focus was on delivering the savings proposals that had been put forward and balancing the budget, however, the level of risks, uncertainties and pressures (as set out previously) remained and each could have a significant impact.

·         Management attention remained focused on delivering savings.

·         There were a number of reasons that savings proposals were not being achieved, in some instances savings proposals had been made but increases in demand had negated the saving, in other areas there were issues with capacity or changes required as a result of consultation.

·         There were some savings which were technically complicated to achieve.

·         Work was carried out with service group managers and directors to identify where there were significant obstacles to achieving savings.

·         There was a rigorous process to challenge services on delivering savings however, some of the savings proposals had also been reversed because it was realised that they were unachievable.

·         To date more than £160m of savings had been brought before members and £153m had been delivered. Some proposals had been rejected. A lot had been learnt through this process about the councillors’ priorities.

4.3           Councillor Bonavia (Cabinet Member for Resources) also addressed the Committee. It was noted that: the Council was half the size it was in 2010. Also, in equivalent terms, the Council’s general fund had been cut by 63% over the same period.

4.4      Janet Senior and Selwyn Thompson responded to questions about saving proposal I13 (more efficient and effective finance processes) the following key points were noted:

·         The Council did not routinely write cheques for the delivery of services. Officers could not recall a time at which the Council had run out of supplies due to problems with the procurement system.

·         The Council had been using Oracle for 20 years. The proposal was to use additional functionality to streamline service delivery.

·         The new solutions would not be put in place until officers were assured that they would work effectively.

·         Options were being explored for the processing of invoices through Oracle using ‘Isupplier’. LB Havering was already using this system so it was proven to be effective.

·         The roll out of additional Oracle services would require a cultural change to the way in which officers worked.

·         The transformation approach being taken by the Council was an integrated programme, which considered use of assets, changes to ways of working and the use of technology as well as staffing, training and change management.

4.5      David Austin and Janet Senior responded to questions about savings proposal I14 (loss of the police officer secondment), the following key points were noted:

·         Civil prosecutions would still be pursued by the Council. In order to pursue criminal cases the Council would need to work with the local police, however, the majority of work undertaken at present related to the civil rather than criminal cases.

·         There were resources across London (such as the counter fraud hub) that the Council could make use of. In a number of instances, such as housing, the powers for prosecution lay with the Council rather than the police. These had to be purchased on a case by case basis.

·         Information about fraud cases was shared with partner organisations.

4.6      Resolved: that the report be noted. The Committee also agreed to thank officers for their work.