Agenda item

The Chief Executive introduced the report and advised that the Strategic Director of Resources would cover issues relating to the long-term impact of the recent government budget and that the Committee would also be advised of the scale of changes that would be required.  It was highlighted that it was important to bring Members up to speed on the implications of the Government’s recent announcements.  In response to a question submitted by a Member, the Chief Executive advised that the discussion would cover the macro view of the process but this evening’s discussion would cover the high level impact of the budget.  This would be followed at a later date by the micro view and the long-term view.

The Strategic Director of Improvement and Development outlined the current position with regard to staff appraisals and advised that 635 had been completed across the Council for the rolling year up to 11^th June, 2010 and this reflected an appraisal rate of 44.2% of all staff eligible for an appraisal.  It was highlighted that the Community and Wellbeing Directorate in particular had worked hard to reach a 62.4% completion rate from a low starting baseline.  A new form and related guidance had been introduced and five workshops had taken place to assist Managers with the new appraisal process.  The Director referred the Committee to the detail of the Council’s identified “gold” projects and it was noted that of the 10 projects, 6 had a confidence level of green.

The Director discussed the performance monitoring update covering the period to 31^st March, 2010.  The target set comprised 44 national indicators including 4 local targets on priority areas which were linked to Slough’s key local priorities.  The status indicated that 30% were set at green, 2% at amber and 25% at red.  6 targets were not set, the results were awaited on 13 of the targets. 

During the ensuing debate a number of comments/ questions were raised as follows:

• A Member commented that the status suggested that 70% of the targets were potentially set at red because only 30% were identified as green.  The Director responded that some of the targets had only narrowly been missed and improvement plans had been put in place where necessary. 
• A Member questioned why many projects were not included in the gold projects list and was advised by the Director that because it was important to have plans in place quickly many projects had not been risk assessed but these would be done at a later date.  The Chief Executive advised that what decided whether a project would be a gold project was whether it was of a certain size or scale and it was agreed that Kevin Gordon would circulate the relevant criteria to Committee Members with further information regarding the nature of the project.
• A Member was concerned that the “improving customer service” project was now closed and in his opinion the service was not acceptable.  The Director advised that the closed status indicated that the measures were now in place to carry out the needed improvement and the project was therefore set up to go.  In these circumstances the project status was shown as closed.  Members felt that this was misleading and it appeared that the project was no longer being monitored and the comments should indicate otherwise.  It was agreed that an update on the gold projects be presented to a future meeting the next meeting of the Committee.  It was emphasised by the Director that the information provided reflected the risks associated with projects in the planning stages.
• A Member raised concerns regarding the national indicator for the achievement gap between pupils eligible for free school meals and their peers achieving the expected level at key stages A2 and B4.  He was concerned that this was set at the red status.  The Chief Executive advised that this was one of the most difficult targets to meet and this was due in part to the gap between the number of disadvantaged children against high achievers and levels of depravation in the Borough, the lack of English as their first language in the home contributed to the difficulties in risk area.  It was suggested that an Education Officer could provide more detail to the Committee if required. 

The Director of Resources referred the Committee to the projected budget as at 31^st May, 2010 showing the current financial position.  The Committee was advised that the current budget was just under £104m and the projected outturn was also just under £104m and there was no variance.  The Director advised that the Council could not have forecasted accurately the circumstances it now found itself in after the budget announcements on the 22^nd June.  The Committee was referred to a table showing departmental growth and savings analysis for 2010/11 and the Committee was advised that the budget had been set knowing that savings had to be achieved this year in order to achieve targets in the next year’s budget.  The balance in year budget of £103m would force savings of £400,000 in 2011/12 and £4m in 2012/13 after savings of £5.2m and £1.1m.  Savings and efficiencies would be used to offset growth of £5.1m and £4.2m over the period, mainly being related to capital requirements.  These figures were based on assumptions including the government grant, income, and council tax increases.

The Director outlined a number of changes that had been made since the election.  These included the removal of a number of grants from dedicated activity ring fencing, in year cuts to area based (non-ring fenced) grants and specific funding programmes, and the impact of a reduced revenue of £2.5m 

The Council now faced a deficit of £2.5m from April 2010 to March 2011 and drawing on resources to meet the deficit would not be an option.  Directors would work with Commissioners to explore ways to meet the reduced budget and recommendations would be prepared for Cabinet which would reflect £1.8m of the sum needed.  The Director was confident that the balance of the required savings would be delivered if Members accepted the recommendations.  It was clear that there would be an inevitable impact on future savings and there would be resultant major pressures for residents, communities, partners and employees of the Council.  It was noted that the government had made it clear that the decision as to how cuts should be made would be made locally. The announced fees on council tax would cause a £1.2m annual reduction and this would have an on year cumulative effect.  Changes to the housing benefit and welfare system would increase demand for services and an increase in VAT of 2.5% would have an effect on 3^rd party contracts.  There would be an impact on staff who would face a 2^nd year without a pay rise and pay freeze and a pensions review.  A sizeable percentage of staff would fall below the £21,000 threshold and this would mean that those staff would be given a small increase in pay. 

In summary there had been savings built into the budget for 2010/11 but there were now additional pressures for the current year of £2.5m and estimated pressures of approximately £25m over the 4 year period.  It was noted that 70% of the Council’s cost was for staffing.

In the ensuing debate, Members raised a number of comments / questions as follows:

• A Member asked whether the £2.5m cut was a total surprise or whether it was known in advance that some areas in particular would be cut.  The Director advised that this was a historic surprise and no-one anticipated the level of the £2.5m cuts to some critical service areas.  It would be necessary to secure  £2.5m in year and in the emerging budget there would be 25% cuts in Government funding over 3 or 4 years. 
• A Member asked whether the prediction that the private sector would pick up and create more jobs etc had been factored in to the budget proposals.  The Chief Executive advised that a £25m reduction in resources was needed in the 4 year period and the economic situation would have relatively little impact on that fact. 
• A Member asked whether the Census 2011 had been taken into account when assessing the budget.  The Chief Executive advised that there was no guarantee that the Council would achieve a higher population count so this could not be factored into the budget.  It was also noted that even if a higher population  was achieved then it would take several years for the financial effects of this to be incorporated within the budget and even in the best outcome the improvement could not be anywhere near the £25m cut. 

The Committee noted that the £25m cut equated for example to 70% of the total social care budget or all of the none school spending within Education and Children Services.  The Chief Executive advised that it was impossible to ignore the situation and although some lobbying could be done particularly with regard to the census, a more strategic approach was required to address the problem.  It would be important to go back to basics and drive forward and consider the focus of the organisation whilst delivering the Council’s priorities and acute needs within the community.  Within the next 6 months it would be important to identify, commit to and drive forward a new agenda.  On the positive side the Council was in a position of having a strong Administration which was returned with an increase majority thereby giving clear decision making and direction.  Also the Council had a strong strategic team, good employee relations and the commitment of its staff, having completed job evaluation.  There was now a need to develop a strategic plan which would set a new 5 year medium term financial plan with a zero base budget for the next financial year.  It would be important to work with partners, communities and residents and engage trade unions to adopt a workforce planning approach i.e. a resources fund would need to be established ahead of the difficult choices that would be required.  It was clear that some things would be delivered differently and some services would not be provided at all.  The end result would be a smaller Council with a smaller number of staff and there would be detailed financial sessions for all Members at which the future plans would be discussed.  In response to a question about the freezing of council tax, the Chief Executive advised that the Government’s advice on this was not clear at this time but advised that 2.5% of the council tax equated to £1.2m.  More would be known in the autumn but clearly this amount would not make a big difference in the overall cuts. 

A Member was concerned about the cuts to the voluntary sector and cited examples of schemes which could be affected such as the Britwell project which kept children off the streets.  He was concerned that if this scheme was cut then there could be 50 children affected.  The Chief Executive advised that it was possible that the voluntary sector would be commissioned to contract out such schemes to another organisation but at the same time in issues such as this it was important to look at prevention.

Councillor Anderson, Leader of the Council addressed the meeting and advised that every area would be looked at to decide where cuts could be made.  It was highlighted that even in areas where there was a statutory obligation to provide a service, those particular services may not be provided as before.  It was highlighted that this would be the first time ever that every year spending would need to be reduced and this was the biggest challenge that this Council had ever faced.

Resolved –

(a)  That the report be noted and that a financial update report be submitted to the Committee in January 2011.

(b)  That the Strategic Director, Improvement and Development, submit a report to the next meeting on the progress of the Performance Reporting Gold Project (Improving Customer Service)