The following were in attendance for this item:
- Councillor Tony Newman, Leader of the council
- Councillor Simon Hall, Cabinet Member for Finance and Treasury
- Richard Simpson, Executive Director of Resources and s151 Officer
- Lisa Taylor, Assistant Director of Finance and Deputy S151 Officer
Councillor Simon Hall gave a presentation on the council's budget. He spoke of increasing reductions in grants between 2011-2012 and 2019-2020, key savings achieved in 2015-2016 and in 2016-2017, the council's financial strategy 2017-2020 and risks facing the borough.
The Cabinet Member highlighted the pressures on housing as many people were priced out of central London housing. In addition, he explained that Croydon was the borough with the greatest discrepancy between the Local Housing Allowance for people on low incomes and actual rents, a situation which is only likely to grow as this allowance has been frozen for the next three years.
Members asked the Cabinet Member what "managing demand" entailed. He explained that this essentially consisted of finding and implementing ways of preventing various problems from emerging in the first place, using approaches such as education, enforcement, etc. He quoted the examples of using education, enforcement and publicity to encourage people to recycle more and fly-tip less, and providing early interventions and support to families who might otherwise end up requiring acute services, which cost a great deal more.
Members asked to receive data on what the demand pressures would be if no measures were taken to manage these, in order to demonstrate how much of a saving the measures were forecast to achieve. They appreciated that such figures could only be an estimate. The Cabinet Member stated that he would be happy to provide figures for the "do nothing" options when next year's budget options were refined. He added that the paper discussed at the 12 December meeting of the Cabinet showed that the estimated costs for adult social care would rise from £41m per year to £76 per year if no steps were taken to make services more cost-effective. However, he sounded a note of caution regarding estimates of cost avoidance through prevention, as these were notoriously hard to calculate with any precision.
Members questioned the Cabinet Member regarding the demand for temporary accommodation. He acknowledged that it represented a significant financial risk and informed committee members that leases on various blocks of flats had been taken to endeavour to provide such accommodation at a lower cost than bed and breakfast. He highlighted the "home finder scheme" through which households could find homes outside the borough, and the work of the Gateway service, which had succeeded in bringing about a reduction in homelessness applications through its support to households at risk of homelessness.
In answer to a question on leisure centres, the Cabinet Member explained that the planned decrease in expenditure set out in the finance report was due to the fact that the subsidy would end in the forthcoming reprocuring process. In addition, the council was planning to finance leisure centres in a more efficient way. He added that the new swimming pool and leisure centre in New Addington would not necessitate costly maintenance expenditure over the next few years.
The Cabinet Member was questioned regarding future reductions in staffing. Members expressed concerns over the sustainability of council services if such reductions were implemented. He explained that the current total number of staff (900) would go down by 58.1 as new ways of working, self-service and automation would reduce the need for the current staffing levels. However, he remarked that these reductions could not take place in the short term in view of the many changes currently taking place in council services and procedures.
Members discussed spending on children in need. The Cabinet Member explained that the budget has risen significantly in part because of the significant rise in need in the borough, and in part to deal with the backlog of cases and measures taken to respond to the recommendations of the joint targeted area inspection which had taken place this year.
In answer to a question on Growth Zone funding, members were advised that the council would not obtain this funding until Westfield had confirmed that they were going to proceed. The council's Chief Executive Officer explained that there was no aggregation between growth zone funding and the council's general fund and that these two were completely separate funds with separate functions. The Growth Zone loan was due to be paid back with business rates from the Westfield development and the Stanhope Shroeders Ruskin Square development.
Members requested more detail on the 88 budget options listed in Appendix 2 of the budget report so that these could be scrutinised more systematically. The Cabinet Member responded that officers could share the key criteria used for determining whether a proposal should be red, amber or green.
The Cabinet Member gave assurances that trade unions would be fully consulted on the proposed cut of 58.1 council posts when concrete proposals had been drawn up. Budget options will also be taken to Corporate Staff Partnership Panel (CSPP) so that they have advance sight of the principles underlying the proposed cuts. The Cabinet Member stressed that the council was seeking to avoid compulsory redundancies wherever possible. This was to be achieved by deleting vacant posts and making major reductions in the use of agency staff, as was done in the restructure of the Contact Centre. This had involved a reduction of 100 full-time posts without bringing about a single compulsory redundancy. The Cabinet Member undertook to provide staffing numbers over the last three years to members of the committee after the meeting.
It was pointed out that attempts to reduce reliance on agency staff had not been successful in the past. The Cabinet Member responded by explaining that the adoption of prevention and early intervention models, e.g. sign-posting, welfare benefits advice, etc. had contributed to a change in the staff mix and a reduced workload for social workers. Members concurred that such a model seemed more deliverable than a plain recruitment and retention drive.
Members noted that the number of children in need cases had risen from 720 to 1140 in a six month period (paragraph 5.3, graph 3). The Cabinet Member explained that the rise in the number of children in need was partly due to an increase in demand and to the threshold for reporting issues being set lower than before, although most of the rise was due to dealing with a backlog of cases. It is anticipated that this number should come down as they are processed and some can be closed down.
The council's Chief Executive Officer explained that five separate reviews were being undertaken across children's and adults' services to look at the weaknesses identified under the Joint Targetted Area Inspection with a view to producing an improvement plan across children's and adults' services in 2017, looking at all the stages in dealing with cases, from the initial report to their closure. She added that money had previously been spent on having triage work carried out by qualified social workers and that the "Transforming Adult Social Care" (TRASC) programme aimed to entrust the assessment work to the council's Gateway services and to allocate work to social workers that made full use of their qualifications and level of experience.
In answer to a question on the Dedicated Schools Grant (DSG) formula, the Cabinet Member for Finance and Treasury explained that a forthcoming rebalancing of the formula would adversely affect urban areas. However, Croydon schools are likely to be less affected than inner London schools as they face a 6% decrease, in contrast with a 15% fall for inner London schools. In addition, the High Needs part of the DSG funding services for pupils with special needs and disabilities will be a set amount, whereas this had previously been set by schools through top-slicing the DSG in negotiations with the Schools Forum. As this flexibility disappears, the extra spend may fall to the General Fund in future.
Questioned on contract management, the Cabinet Member explained that a review of major contracts was in progress, with some external support to ensure robust outcomes. These may include the termination of some service lines with these services being done in a different way at a reduced cost if performance is poor under current arrangements. Penalties are also being imposed for poor performance.
The Cabinet Member was questioned on transport provision for the Mayor of Croydon. He replied that the type of vehicle was being reviewed: the future model provided for mayoral transport might be electric or hybrid, to contribute to improved air quality. Members asked whether Croydon would be lobbying for all vehicles to run on cleaner fuels in view of the London Mayor's emphasis on air quality. The Leader answered in the affirmative and expressed the view that the council must lead by example. He stressed that the council must always look at environmental considerations when reprocuring services. In addition, efforts will be made to provide bus services in diesel-free vehicles and the council will continue to lobby for extensions to current tram lines in the borough and beyond.
Members were reminded that air quality was to be examined at a forthcoming Scrutiny meeting, at which they would examine the reprocurement of Special Educational Needs transport as well as waste disposal vehicles, many of which currently run on diesel.
The Cabinet Member for Finance and Treasury and officers were thanked for his presentation and fulsome responses to members' questions.
Members of the Committee drew the following conclusions:
- Budgets for the "People Department" are the ones which give the most concern to the committee in terms of demand and cost of service provision
- The pressures on adult social care and health services and their budgets needed to be robustly scrutinised in the following year