Welcome to the
Vale of Glamorgan Council

                                                   Scrutiny Committee (Corporate Resources) 

Report of the Task and Finish Group 

The Impact of the Economic Downturn on the Council and its Services 
 

1. Introduction 

 

1.1       With the forecast of increasingly difficult and challenging budget settlements for local government in future years, Members of the Scrutiny Committee (Corporate Resources) considered it essential that the Committee carefully scrutinise ways in which those cuts could be implemented / savings achieved with the minimal impact on the delivery of Council services.

 

1.2       Consequently, the meeting of the Committee of 3rd June 2010 approved the setting up of a Task and Finish Group to review the impact of the economic downturn on the Council and its services (minute no. 89 refers).

 

1.3       The objectives and purpose of the review were to:

 

·        Review ways in which current budget savings can be achieved as currently identified in the Medium Term Financial Plan.

·        Develop a clear understanding of the implications of proposed savings on service delivery and how service delivery will be affected / adjusted.

·        Provide up to date information and details of the current position within the Council.

·        Examine options for maximising income.

·        Explore options for alternative service provision (e.g. via partnership / collaboration, third sector).

·        Consider options and make recommendations.

·        Assist the Budget Working Group and Cabinet in regard to future budget deliberations.

 

1.4       The desired outcomes resulting from the review were seen as:

 

·        Identifying and mitigating where possible the impact the economic downturn will have on Council services.

·        Preparation of a detailed programme on the proposed impact on Council services.

·        Maintenance of up to date information on the Council’s position.

·        Ensuring relevant information / guidance is available for all.

·        Maintenance of appropriate services for the council tax payer and service recipients.

 

1.5        The information required to undertake the task included:

 

·        Relevant data e.g. Cost Centre Analysis, Medium Term Financial Plans.

·        Known and predicted departmental savings targets for 2011/12 and 2012/13.

·        Details of each Directorate’s priorities for savings.

·        Details of where budget savings are likely to be made and the impact on services.

·        Funding programmes.

·        Procurement process.

·        Advice and support services available.

 

1.6       The format of the evidence would be by a combination of:

 

·        Presentations.

·        Background information.

·        Responses to Members’ questions.

·        Verbal / written evidence.

·        Consultation with the public, key stakeholders and other agencies (if deemed appropriate).

·        Statistical information.

 

1.7        Recommendations of the Task and Finish Group would be submitted for consideration to the Scrutiny Committee (Corporate Resources) as lead Committee and any recommendations made to Cabinet to inform the 2011/12 budget process.

 

1.8       Having regard to the amount of work to be completed within the restricted timescale, the Group drew up a detailed work programme. As such, the focus of the Group was to look at revenue rather than capital programme issues and from a medium rather than short-term perspective.

 

1.9       The detailed work of the Group, therefore, encompassed:

 

·  Consultation exercises and interviews with stakeholders.

·  Analysis, prioritisation and challenge of all budget cost centres.

·  The preparation of a strategy for the way forward; and

·  The formation of initial views of possible areas for savings.    

 

2. Consultation

 

2.1       As part of the work programme of the Group, a consultation exercise    on budget priorities was undertaken with specific external stakeholders. This took the form of separate questionnaires to members of the public (via the Citizens' Panel), town and community councils, representatives of the business sector and the Local Service Board (LSB). Interviews were also held with various representatives from the trades unions and teachers associations.

 

2.2       A copy of the questionnaire sent to members of the public on the Citizens' Panel is attached at Appendix A including a summary of the responses. The questionnaire posed three specific questions to be answered:

 

·        To select up to 7 priority areas that should be protected from budget cuts;

·        To identify up to 3 areas where the Council could generate more income;

·        To canvass opinion as to whether council tax should be increased to the Welsh average to support priority services.

 

2.3   A total of 549 (51.2%) completed questionnaires were returned. The priority areas identified showed a clear concern for protecting services within waste management and cleansing (in particular refuse collection and disposal), followed by highways maintenance (road and pavement maintenance) and adult social services (helping people to remain at home and residential care). Parking, public protection, schools, waste management and leisure were all identified as potential areas for increased income generation. Almost two thirds of the respondents favoured an increase in council tax to the Welsh average, with the highest preference for this to be phased in over 3 years. Finally, a number of comments were made by Panel members in respect of the subject matter covered in the questionnaire. These have also been considered by the Group, the most common being as follows:

 

·        Difficult to prioritise between so many important services.

·        More use of volunteer services, community organisations and community offenders.

·        Protect waste management and street cleansing.

·        Protect investment in roads and pavements and reduce potholes.

·        Protect services for the elderly/more care homes.

·        Protect services for children and young people.

·        Protect vulnerable children.

·        Promote public health and safety.

·        Reduce councillors' allowances and expenses.

 

2.4   The questionnaires issued to the town & community councils, business sector and Local Service Board, although similar in nature to that for the Citizens' Panel, placed emphasis on the potential adverse effect on their respective organisations of the Council being unable to protect the priority areas identified or generating increased income which could potentially disadvantage them. It also looked to gain an appreciation of their plans for service reduction/ reconfiguration in the light of the economic downturn.

 

2.5       The questionnaire and summarised results in respect of town and community councils is attached at Appendix B. Following a 30% return of completed questionnaires (8 from 27), almost half of the priorities identified were for waste management & cleansing (refuse collection and disposal), highways maintenance (road and pavement maintenance) and schools (schools management/ education transport). Other priority areas included parks and grounds maintenance, children's social services and adult social services (helping people to remain at home and residential care), leisure services (sport and physical activity for young people) and planning and transportation. Social Services fees and charges for schools transport were identified as the two areas of highest concern, where increased income generation could have a detrimental effect, with parking charges and leisure fees also featuring. None of the responses gave any indication of plans for future changes to their own services.

 

2.6       The LSB meeting of 2nd November received a report from the Council setting out proposals to consult on priorities for its 2011/12 budget. This took the form of a questionnaire intended to glean initial views of which services the Council’s stakeholders, including its partners on the LSB, would most wish to see protected. Some LSB partners found the questionnaire too broad in content and difficult to express the wider strategic issues that were being discussed as part of the development of an integrated Community Strategy.  It was agreed by the Board that the 10 priority areas identified by the LSB partners at the visioning event for the Community Strategy would indicate the LSB’s top service priorities in this respect. These are:

 

LSB lead

·        People of all ages are actively engaged in life in the Vale and have the capacity and confidence to determine their own needs as individuals and within communities. 

·        The diverse needs of local people are met through the provision of customer focused, accessible services and information.

·        Vale residents and organisations behave in a more sustainable way and work together to meet the challenge of climate change ensuring the local environment is a resource we and future generations can enjoy for the benefit of our health and wellbeing.

·        The Vale maximises the potential of its position within the region working with its neighbours for the benefit of local people and businesses, attracting visitors, residents and investment.

·        Older people are supported to remain independent, healthy and active and receive the necessary services to meet their diverse and changing needs.

 

Learning and Skills Partnership Lead

·              People of all ages are able to access co-ordinated learning opportunities and have the necessary skills to reach their full potential, helping to remove barriers to employment.

 

Safer Vale Lead

·              Residents and visitors are safe, feel safe and the Vale is recognised as a low crime area. 

 

Regeneration Partnership Lead

·              The Vale attracts inward investment and supports local businesses to provide a diverse range of sustainable employment opportunities enabling the local economy and individuals to prosper.

 

Health, Social Care and Wellbeing Partnership Lead

·              Health inequalities are reduced and residents are able to access the necessary services, information and advice to improve their wellbeing and quality of life.

 

Children and Young People’s Partnership Lead

·        Children and young people in the Vale are well informed and supported to access a broad range of quality services that enable them to take full advantage of the life opportunities available in their local communities and beyond.

 

2.7       The consultation with the business sector proved to be disappointing with only 1 completed questionnaire returned. This indicated commercial waste collection, road/pavement maintenance, employment and business development, planning, public transport and civil contingencies as priority areas with commercial waste as an income generation possibility whilst maintaining that the Council should encourage an 'open for business' approach. 

 

2.8       The Task and Finish Group invited all the recognised trades unions and teachers associations to consultation and subsequent interviews were held with representatives from the NASUWT, NUT, ASCL and NAHT teaching unions as well as Unison and GMB. Areas discussed included:

 

·        The overall measures that the Council could pursue in order to help respond to the current budget pressures;

·        The particular areas that the Council should consider in order to find the necessary financial savings;

·        Views on the relative priorities between one service and another;

·        Things that the Council should consider in order to mitigate the response to budget pressures (either in terms of the effects on staff or service users).

 

2.9       The opportunity for engagement was widely welcomed by the union representatives who emphasised the need to maintain dialogue and open channels of communication on decisions which would impact upon their members. Issues raised included:

 

          Common Themes

• Prioritising statutory Council services over non statutory services and emphasis on core business for service delivery;
• Need for introduction of cost effective administration systems;
• Need for better procurement.

          Teaching Unions

• Revisiting the schools investment strategy;
• Need for smarter working and alternative methods of service provision;
• Revisiting of previous policy decisions in the light of reduced funding levels;
• Possible extension of the early retirement scheme as an invest to save initiative;
• Possible reduction/freeze in members' expenses; 
• Reducing non essential costs e.g. tea/biscuits;
• Possible use of fixed term contracts and review of staff grades, staff/pupil ratios;
• Increase Council Tax and other income sources e.g. street parking.

          Non- teaching Unions 

• Review use of agency staff;
• Review use of hire vehicles and waiting times for garage repairs;
• More use of technology to assist Council operatives (e.g. camera phones):
• Improved supervision and management arrangements for front line staff;
• Need to reuse furniture and equipment and minimise waste;
• Benefits of and increased use of in-house service provision rather than external contractors;
• Frequency of office moves;
• Addressing impact of low prioritisation by schools on buildings maintenance funded from delegated budgets;
• Reviewing inefficient processes for holding and issuing stock from central stores, reviewing ability of contact centre to deal with technical enquiries;
• Addressing logistical problems associated with the Alps depot.

2.10   Interviews were also held with representatives from the voluntary sector (Vale Council for Voluntary Services and Citizens Advice Bureau). Issues raised included:

• Reducing duplication of service delivery by the Council where already provided via the voluntary sector (e.g. debt counselling/support to clients such as accommodation and welfare payments);
• The Council 'tapping in' to the additional grant funding that the voluntary sector can access for mutually beneficial projects (e.g. training);
• Investigating opportunities for community development projects to be run by the voluntary sector instead of the Council (e.g. community transport/management of community facilities);
• Simplifying and clarifying procurement processes between partner agencies;
• Co-production of service delivery with partners where this can result in better services to the public;
• Use of the voluntary sector as a method of community engagement.

2.11 In preparing this report account has also been taken of the comments of the Scrutiny Committee (Corporate Resources) in its capacity as lead scrutiny committee for consultation on the initial budget proposals for 2011/12. In this respect, the Committee resolved that the deliberations of the Scrutiny Committees be noted and forwarded to the Budget Task and Finish Group for further consideration, the attention of all Members of the Committee being drawn to the fact that, should they have further comments to make in respect of the revenue budget proposals, they should pass those comments to the Scrutiny and Committee Services Section for onward transmission to the Task and Finish Group.

 

2.12  With no further comments being received, the minutes of the Scrutiny Committee (Corporate Resources) held on 7^th December 2010 is attached at Appendix E. The Group has reviewed the minutes and in particular note the recommendations made in respect of savings options LPPH1, LPPH4, LPPH9, LPPH14 and LPPH15 and LD1, LD5, LD6, LD7 and LD8. It is the view of the Group that the Cabinet have regard to these specific recommendations when making their final proposals for the 2011/12 budget.

 

3. Analysis, Prioritisation and Challenge of Budget Cost Centres

 

3.1 In order to identify the differing areas of Council spending and their relative priority and risk, a significant proportion of the work of the Group was taken up with the analysis, prioritisation and challenge of all Council General Fund cost centres.

 

3.2       This was done through the production of Cost Centre Analyses (CCAs) for each cost centre within a service area including:

• Comparisons of the 2009/10 budget, actual outturn for 2009/10 and 2010/11 budget over the different types of expenditure and income.
• Separation of the largely controllable (e.g. salaries and wages) and uncontrollable (e.g. recharges from other departments) elements of income and expenditure.
• Identification of the activities provided and the relevant Service Head/Operational Manager and budget holder where different.
• Objectives for the range of activities provided under that cost centre.
• Where appropriate other relevant information to supplement the financial information e.g. staffing, outputs.

3.3       Each cost centre was awarded a rating that measured its relative risk (based on the Council’s risk management strategy) and corporate priority. The following tables show the criteria used for the risk and corporate priority rating:  

 

Risk Assessment Matrix

 

 

Corporate Priority Category	Score
Commitments and areas where the Council has no control over the expenditure, e.g. contractual and legal commitments, absolute minimum statutory service, taxes, etc.	3
Political Priority (publicly announced commitment e.g. items included in the Community Strategy, Corporate Plan)	2
“Invest to Save” and preventative expenditure	2
Statutory expenditure above the absolute minimum	1

 

3.4       Interviews were held with Service Heads and other staff as necessary in order to clarify any issues raised. The task was progressed on a service-by-service basis with a ‘zero based’ approach taken to the extent that initially it was assumed all activities could be cut unless clear justification could be made for continuation.

 

3.5       The detailed assessment of the Group is attached at Appendix C and this shows for each cost centre the service, name, net & controllable budget, risk and corporate priority rating.

 

3.6       A number of issues were raised during this exercise and a summary of these follow. The conclusion of the Group on each is indicated in brackets in italics and where asterisked, it is included within the Recommendations contained in this report.

 

3.6.1 Learning & Development

• The need to improve schools’ sickness targets (Director of Finance ICT and Property to draw to attention of Director of Learning and Development)  
• Consideration of the merger of the Schools IT service into the Council’s ICT Department (Director of Finance ICT and Property) in order to achieve 10% savings. (Director of Finance ICT and Property to carry out review and report outcome to Cabinet)*
• Reviewing the cost of insurances within the Council in order to consider ways the Council can reduce the cost of insurance corporately including schools. (Director of Finance ICT and Property to carry out review and report outcome to Cabinet)*
• Viability of the Community Enterprise Centre and Training Management. (the saving in Appendix F is noted)
• Alternative ways of providing a Catering service within the Authority (the saving in Appendix F is noted)

3.6.2 Legal, Public Protection & Housing Services

• An assessment of the continued need to obtain external legal advice, in order to realise possible savings. (Director of Finance ICT and Property to draw to attention of Director of Legal, Public Protection and Housing and progress to be reported to Corporate Resources Scrutiny Committee) **
• Consideration of an amalgamation of services for Cabinet Support, Scrutiny and Committee Services, Improvement & Development Team, Mayor’s Office and Members’ Services in order to achieve savings in the region of 10%. (Chief Executive be requested to carry out review and report outcome to Cabinet)*
• A possible reduction in the number of dog wardens. (Director of Finance ICT and Property to draw to attention of Director of Legal, Public Protection and Housing)
• The potential to increase licensing and pest control fees. (The saving in Appendix F is noted)
• Reviewing the two administrative sections within Public Protection and Housing Services in relation to duplication of service. (Director of Finance ICT and Property to draw to attention of Director of Legal, Public Protection and Housing and progress to be reported to Corporate Resources Scrutiny Committee) **
• Consideration of ways to alleviate Homelessness e.g. leasing schemes, mortgage rescue schemes, short-term leases and the Council purchasing properties. (The saving in Appendix F is noted)

3.6.3 Chief Executive’s/Finance, ICT & Property

• The following service areas be recommended to find 5% savings – Transact, ICT, Contact Centre, Systems Implementation. (The savings in Appendix F exceed this target)
• An office accommodation strategy be developed. (The Group note the progress in relation to this contained in the Asset Management Plan reported to Cabinet on 15 December 2010 minute C1149))
• Consideration to the sharing of services with other local authorities e.g. occupational health, training & development, health & safety. (Director of Finance ICT and Property progress if appropriate and progress to be reported to Corporate Resources Scrutiny Committee) **
• Reviewing the Arts Development role and considering working with private partners or other local authorities. (Director of Finance ICT and Property to draw to attention of the Chief Executive and progress to be reported to Corporate Resources Scrutiny Committee) **
• Transferring the responsibilities for the Human Resources (Council’s staffing) aspects of equalities within the Equalities Section to the Human Resources section (Chief Executive be requested to carry out review and report outcome to Cabinet)*
• Reviewing the Equalities Team in order to ascertain future savings. (Chief Executive be requested to carry out review and report outcome to Cabinet)*

3.6.4 Social Services

• Consideration of the possible merging of the Fostering and Adoption Services.(The Group note the merge of the teams)
• The outcome of the day care services review and details of the current position. (The saving in Appendix F is noted)
• The provision of transport and the use of mobility allowances. (The saving in Appendix F is noted)
• Consideration of alternative provisions for various services, for example meals on wheels. (The saving in Appendix F is noted)
• Reviewing the service areas under Business Management and Innovation. (Director of Finance ICT and Property to draw to attention of Director of Social Services to be incorporated into his Change Plan)*
• Reviewing Social Services training to consider the possibility of shared training with other local authorities and / or on a regional basis. (Director of Finance ICT and Property to draw to attention of Director of Social Services to be incorporated into his Change Plan)*
• The transition arrangements of children into adulthood in particular with regard to their learning needs.  (Director of Social Services take a report outlining arrangements to Community Care and Health Scrutiny Committee)*

3.6.5 Environmental & Economic Regeneration

• In light of the possible reduction in planning application fees to the authority that a review of the Planning service be undertaken. (The saving in Appendix F is noted)
• A rationalisation of the Service Areas Planning Policy and Transportation, Policy and Conservation, Road Safety and Public Transport. (Director or Environmental and Economic Regeneration  be requested to carry out review and report outcome to Cabinet)*
• A rationalisation of the service areas for Urban Regeneration, Business Development and Town Management. (Director or Environmental and Economic Regeneration  be requested to carry out review and report outcome to Cabinet)*
• A full review of Community Centres be considered. (Director of Finance ICT and Property to draw to attention of Director or Environmental and Economic Regeneration)
• A review of events within Arts Development be considered. (the saving in Appendix F is noted)
• A review of the Highways and Engineers Department be considered. (the saving in Appendix F is noted)
• A rationalisation of the Arboriculture Maintenance Service be considered. (Director of Finance ICT and Property to draw to attention of Director or Environmental and Economic Regeneration)
• A business case in respect of proposals regarding waste collection re-arrangement be considered. (Director of Finance ICT and Property to draw to attention of Director or Environmental and Economic Regeneration and progress to be reported to Corporate Resources Scrutiny Committee) **
• Revisiting the service area of Building Cleaning Services following the conclusion of the Housing Stock Transfer Ballot. (Director of Finance ICT and Property take forward at appropriate time and progress to be reported to Corporate Resources Scrutiny Committee) **
• As the Sports Development service was dependent on grant funding and Leisure Centres were currently the subject of a separate review no further consideration was necessary at this stage.

4. A Strategy for the Way Forward 

 

4.1   In developing a strategy for the way forward, the Group has factored in the results of the consultation with stakeholders, the analysis of relative risk and corporate priority and interviews with relevant service managers when making their detailed comments.

 

4.2   The Group has paid particular regard of the need to take a longer-term view of the impact of the economic downturn and consequent government spending review, on the Council’s services. Many of the recommendations contained within this report, if progressed, will require forward planning and a lead time before practical implementation. Others will need to be ‘back ended’ in order to avoid impacting detrimentally on other service areas (e.g. any further reduction in Human Resources support at a time when staff and management in all services would be requiring assistance). 

 

4.3   To put the position in financial perspective, the Group requested an up to date projection of the expected shortfall in funding over the next three years.

 

4.4       The work on the 2011/12 budget is yet to be completed, with the final settlement not known until February 2011 and no decision made by Council as to any potential council tax increase until 2^nd March. However, the Director of Finance, ICT and Property has indicated that savings totalling an estimated £4.8M (excluding schools) will be required to balance next financial year’s budget. This is based on the assumption that the schools budget will comply with the minimum target set by the Welsh Assembly Government (WAG).

 

4.5       The estimated savings required for 2012/13 and 2013/14 have been based on forecasts of pay and price inflation and information provided by services on unavoidable cost pressures. As part of the provisional settlement WAG provided estimates of the Vale’s future Aggregate External Finance (the unhypothecated annual revenue support) for 2012/13 and 2013/14. This showed a decrease for 2012/13 of 0.04% and an increase of 1.3% for 2013/14.  The following table summarises the overall position and additional detail on inflation and cost pressures is provided at Appendix D:

 

Predicted Shortfall    2012/13  2013/14 2012/13 to 2013/14      £'000   £'000         Net Predicted Reduction/(Increase) in AEF           50    (1,960)         Total effect of inflation increases      3,140    4,040         Net Unavoidable Cost Pressures      4,710    2,640         Total Shortfall      7,900    4,720

 

4.6  Based on the assumption that again the schools budget will comply with the minimum target set by WAG, the shortfall for Services, excluding schools, is estimated as £6.7M for 2012/13 and £3.1M for 2013/14 (more detail is within Appendix D).  

 

4.7  The costs pressures in the previous table include increased costs falling on the General Fund of about £2M a year arising as a result of a potential stock transfer. However, the ballot has not yet been held and should the stock transfer then the HRA balances will revert to the General Fund. It is recommended by the Group that should a stock transfer take place, every effort must be made to minimise the impact on the General Fund and that to protect vital services the balances transferring to the General Fund from the HRA be used to cover the shortfall until measures to reduce it can take effect.

 

4.8  If the above measure is adopted the estimated shortfall to be met by Services excluding schools is estimated as £4.7M for 2012/13 and £3.1M for 2013/14 (and £4.8M for 2011/12 as stated in paragraph 4.4).

 

4.9  The estimated shortfall in funding for services other than schools is therefore some £12.6M over the next three years. However, it is stressed that, the 2011/12 budget has not been finalised  and  the danger of shifts in inflation, changes to the WAG indicative budget, changes in legislation or demographic movements and changes to grant-funded schemes could increase these targets, particularly for 2013/14 and 2014/15.

 

4.10  Whilst the exact savings target will be subject to change, it is nevertheless clear that the target will be a challenging one. However, from the results of consultation with numerous stakeholder groups  achieving this level of savings will be by no means an easy task, with many large Council services being flagged as priority areas and others having statutory functions to deliver. In addition, the Welsh Assembly Government’s decision to apply a degree of protection to schools and Social Services, which though assisting those areas, may place increased pressure on other Council services.

 

4.11 The Group are of the opinion that cuts in service provision should only be considered as a last resort. Instead, services should make every possible effort to continue to achieve their objectives and outcomes by fundamentally rethinking how they are presently organised and delivered (e.g. implementation of shared services where there is a business case). Whatever, model is adopted however, it is imperative that the services in question remain ‘fit for purpose’. This will entail ensuring that operational budgets are not unnecessarily cut and that management structures at all levels, including the number of tiers, are reduced.

 

4.12 Consequently, it is the view of the Group that over the next 3 years all services, with the exception of schools, should achieve a minimum total saving of 12% (4% per annum) either from efficiencies or savings which have a low impact on clients.  Whilst this is challenging, it is felt by the Group to be achievable particularly as the target has been set at the Directorate level to allow prioritisation and flexibility between Services. It is assumed that schools will be required to meet the savings necessary to balance their budget to the WAG minimum target.

 

4.13 A target of £1M has already been set for savings from Leisure Centres as a result of working with a private sector partner. Consequently they have been excluded from the 4% target and the current £1M target is used instead.

 

4.14 In view of the need to find efficiencies at all levels within the organisation, it is recommended that in addition to the above, the Leader and Chief Executive are requested to review the senior management structure at chief officer level and find a further £200,000 saving. The review should specifically include the Corporate Management Team. This is in addition to the saving identified within the Social Services proposals contained in this report.

 

4.15 The table below specifies the target for each Director, based on the above proposals:

 

Directorate	Savings Target 2011/12 to 2013/14
	£’000
Learning & Development –  Non Schools	1,926
Social Services	4,903
Environmental & Economic Regeneration	3,558
Legal, Public Protection & Housing Services	677
Finance, ICT & Property	878
Chief Executive	475
Review Senior Management	200
Total	12,617

 

4.16 The targets set out above total £12.6M and meet the identified predicted shortfall in the budget over the next 3 years.

 

4.17 The assumptions used for predicting the future shortfalls  assume fairly low pay awards and  inflation rising in line with Government targets (the details are included in Appendix D).  A 1% increase in pay and inflation above the assumptions would result in increased expenditure respectively of £1.4M and £0.6M. Consequently, the Group also propose that where inflation exceeds 2%, Directorates should identify additional savings to cover the increased costs.

 

4.18 If additional savings become necessary the Group recommend that in the first instance these should have a low impact on the client. In the event that this is not possible and cuts in services become necessary then these should be sought from those areas that have a low risk and priority as identified in the CCA (Appendix C).

 

4.19 This exercise has highlighted a number of issues, which the Group feel should be progressed by the relevant service areas, certain of which could result in some ‘quick wins’. These include:

• Eliminating non-essential expenditure (e.g. printing, publications, furniture, conferences, use of non-Council buildings for training purposes etc.).
• Developing a protocol for engagement of consultants and agency staff.
• Seeking further ways to reduce the pay bill (e.g. voluntary reduction in working hours).
• The Director of Social Services being requested to work with the Vale Council for Voluntary Services and Citizens Advice Bureau to identify areas of duplication of service provision and where more joint working/alternative provision would generate savings.
• Building upon the current work to develop a robust programme for workforce planning.

4.20 It is suggested that the Cabinet consider the views of the Citizens’ Panel to progress incremental increases in council tax, over a reasonable period, until the Vale reaches the Welsh average.

 

4.21 Any proposed area for saving will require an Equality Impact Assessment (EqIA) to be completed and engagement with the trades unions where there could be a consequent impact on employees. Carrying out an EqIA involves systematically assessing the likely (or actual) effects of policies on people in respect of disability, gender, sexuality (including gender identity), age, Welsh language, and racial equality.

 

4.22 This report has assumed that the Schools budget will comply with WAG targets. The precise implications will depend on each individual schools position, however the financial position for schools over the next 3 years will be challenging. The Director of Learning and Development should prepare a 3 year Service and Financial Plan for Schools and put in place arrangements to assist schools in delivering their service within budget.

 

4.23 Although not within the remit of the Group, it is recommended that the results of the Savings Challenge arising from ideas and suggestions put forward by Council staff be progressed as a priority and that staff be applauded for their contributions in this respect.

 

4.24 It is, emphasised that progress to achieve the specific savings should have regard to the Group’s overriding objective of maintaining objectives and outcomes for the relevant client groups wherever possible. 

 

5. Possible Areas for Savings 

 

5.1   As part of the remit of the Group a detailed examination of the proposed areas for savings, as submitted to Cabinet in November as part of the initial budget proposals, was undertaken. This included interviews with the relevant Service Heads/Operational Managers and other staff as necessary. The results of the work already undertaken by the Group in respect of prioritisation of cost centres and consultation with stakeholder groups was drawn upon as part of this exercise.

 

5.2   The Group, in addressing the proposed savings, also challenged the implications and whether services had exhausted options for achieving efficiencies or considered whether alternative ways of delivering the services could be provided e.g. joint working etc.  Members of the Group were also aware that some of the proposals would be subject to further consultation and could take some time to deliver.

 

5.3   The Group’s deliberations resulted in certain of the proposals (or aspects of them) not being accepted, as they did not meet the criteria established as indicated in the Strategy for the Way Forward section of this report. For others, different options were chosen by the Group and/or mitigating actions identified to minimise the impact on the client.

 

5.4   A full list of the possible areas for savings that did meet the Group’s criteria is attached at Appendix F and totals £9.3M (excluding schools) phased over the 3-year period 2011/12 to 2013/14. The appendix also incorporates specific savings proposed by the Group.

 

5.5   The appendix sets out for each saving the description, amount, the service implications including any adverse impact, human resource implications and the latest financial year in which the saving should be realised. Included within the Description is the original reference number e.g. LD2, that was used in the Initial Budget Proposals Report taken to Cabinet in November 2010 (where included).

 

5.6    The human resources implications state the estimated reduction in established posts funded by the budget as measured in full-time equivalents (fte) and the estimated potential number of redundancies. The main reasons for the difference between the two figures are vacant posts (or posts covered by agency staff) which result in a reduction of budgeted posts as expressed in fte but have no redundancy implications; and redundancies expressed as head count and not fte, so for example, if 1 fte post actually constituted 2 part-time staff the redundancies would be 2.

 

5.6       Often included within the Service Implications are actions which if carried out would mitigate the impact of the saving. The recommendation of the Group is on the strict proviso that all such mitigations are implemented. When monitoring progress against the targets and recommendations this will be included in the report.

 

5.7        For 2011/12 the reduction in budgeted posts is estimated as 116.85 measured in fte and estimated number of potential redundancies 59.  The overall reduction in budgeted staff over the 3 years in Appendix F is 141.29 fte. The number of potential redundancies over the same period is 86 although this figure needs to be treated with extreme caution due to changing circumstances over the period. 

 

5.8    The above figures do not include the staffing implications relating to budget pressures within schools as the details need to be considered by individual Governing Bodies and supported by the Director of Learning and Development. There are, however, likely to be staff reductions and redundancies depending on each schools circumstances

 

6. Conclusion

 

6.1   The table below identifies for each Director the extent to which the  target has been met and any remaining shortfall. The measures set out in paragraphs 3.6, and Section 4 of this report will assist Services in identifying further savings and Directors are exhorted to identify the specific measures needed to meet the target by June 2011.

 

Directorate	Target	Savings Identified	Shortfall
	£’000	£’000	£’000
Learning & Development (non schools)	1,926	1,926	nil
Social Services	4,903	2,453	2,450
Environmental & Economic Regeneration	3,558	2,763	795
Legal, Public Protection & Housing Services	677	677	nil
Finance, ICT & Property	878	840	38
Chief Executive	475	437	38
Senior Management	200	200	nil
Total	12,617	9,296	3,321

 

6.2       For 2011/12 the total savings identified in Appendix F amount to £5.7M. This sum exceeds the likely sum of £4.8M required to balance the budget by £900k. This figure has been contributed to by the Chief Executive; Finance, ICT and Property; Legal, Public Protection & Housing Services; and Environment and Economic Regeneration.  It is proposed that as the savings are low impact or derived from efficiencies that they be implemented. Services that exceed their target for 2011/12 should not be penalised and the additional savings accrued for 2011/12 would reduce the sum required from those services in future years, to contribute to their 3 year target.

 

6.3        The surplus of £900k thus generated for 2011/12 would be in effect a “one-off” and it is recognised by the Group that it would be best used to fund similar “one-off” expenditure.  The recommendation of the Group is that it should be used to invest in the Highways service to improve the infrastructure and assist in repairing the damage to roads, pavements etc. incurred through the recent bad weather.

 

6.4       In light of the staffing implications of the savings proposals it is essential to ensure that consultation with the trade unions is carried out in accordance with the Council’s Avoiding Redundancy Policy  and related legal requirements. Such consultation will be important given the anticipated number of redundancies over the 3 year period and the need to consider measures to reduce and mitigate the effect on staff. A bi-weekly “change forum” has been set up with the trade unions to help co-ordinate the consultation process and deal with cross Directorate issues. A similar approach, involving the Director of Learning and Development,  needs to be considered in relation to schools to progress consultation in individual schools.

 

6.5       The numbers of potential redundancies over the next few years will also require the roll-out of a number of measures including the strengthening of the Council’s redeployment processes, the tightening of the Council’s vacancy control processes and, where appropriate the targeted search for voluntary redundancies/reduced hours.

 

6.6       The Group noted that training sessions have been scheduled for all Heads of Service to help guide the change process within service areas and to provide appropriate support.

 

6.7       Some of the savings involve other organisations e.g. the voluntary sector. It will be necessary for managers to consult and give adequate notice to those affected by the savings.

 

6.8       The savings and actions proposed in this report should be monitored and the Director of Finance ICT and Property is requested to bring regular quarterly reports on progress to the Corporate Resources Scrutiny commencing June 2011.

 

6.9       In making the following recommendations, the Group have reviewed whether the desired outcomes of their review have been achieved. To recap, these were:

• Identifying and mitigating where possible the impact the economic downturn will have on Council services. This has been achieved through the process of analysing all budget cost centres, having regard to the views expressed as a result of the consultation with the various stakeholder groups. Identifying mitigating actions with regard to the proposed savings.
• Preparation of a detailed programme on the proposed impact on Council services. This is encompassed in the recommendations made in this report and in particular the detailed review of the proposed areas for savings.
• Maintenance of up to date information on the Council’s position. A revised estimate of the Council’s shortfall in funding has been undertaken and, notwithstanding the uncertainties that still exist in this respect, has informed the phasing of the proposed areas for savings. 
• Ensuring relevant information / guidance is available for all. The process of consultation and interviews was supplemented by detailed information and data and supplementary investigation and analysis was also undertaken where deemed necessary.
• Maintenance of appropriate services for the council tax payer and service recipients. This has been a fundamental cornerstone of the Group’s views as set out in the proposed strategy for the way forward.

7.      Recommendations 

 

7.1        The Scrutiny Committee (Corporate Resources) is urged to endorse the report of the Task & Finish Group and recommend to Cabinet that they have regard to its contents and approve the following specific recommendations of the Group when making their final proposals for the 2011/12 budget and when setting the financial strategy for future years. That:

 

i.     The Strategy as set out in Section 4 of the report be adopted.

 

ii.    Directors savings targets for the period to March 2014 be set as follows:

 

Directorate	Savings Target 2011/12 to 2013/14
	£’000
Learning & Development –  Non Schools	1,926
Social Services	4,903
Environmental & Economic Regeneration	3,558
Legal, Public Protection & Housing Services	677
Finance, ICT & Property	878
Chief Executive	475
Review Senior Management	200
Total	12,617

 

iii   That Directors ensure that all specific measures required to achieve

      the above are identified by June 2011 to be included in the Medium Term Financial Plan.

 

iv   One of the measures to be to reduce senior management structures achieving a minimum saving of £200,000 by 2012/13.

 

v    Where inflation exceeds 2%, Directorates savings target be increased accordingly.

 

vi   Should a housing stock transfer take place, the balances transferring to the General Fund from the HRA be used to cover the consequential increased costs falling on the General Fund until measures to reduce it can take effect

 

vii  On the strict proviso that the mitigating actions identified in the Service Implications are implemented, the areas for savings detailed at Appendix F to this report be progressed by the relevant Directors, and that the year indicated be regarded as the latest in which the saving should be realised.

 

viii Any savings which exceed the overall required target for 2011/12 (estimated at £900k) be invested in highways to improve the infrastructure and assist in repairs.

 

ix  That the Director of Finance ICT and Property carry out the following and report back to Cabinet:

• Consider the merger of the Schools IT service into the Council’s ICT Division to achieve 10% savings
• Review insurances within the Council to consider ways the Council can reduce the cost

x    That the Chief Executive carry out the following and report back to Cabinet:

 

·        Consider an amalgamation of services for Cabinet Support, Scrutiny and Committee Services, Improvement & Development Team, Mayor’s Office and Members’ Services to achieve savings in the region of 10%.

·        Review the Equalities Team in order to ascertain future savings and whether the responsibilities for the staffing aspects of equalities should transfer to the Human Resources Division

 

xi     That the Director of Social Services incorporate within his Change Plan a review of the service areas under Business Management and Innovation, and a review of the possibility of shared training on a regional basis

 

xii    That the Director of Environmental & Economic Regeneration carry out the following and report back to Cabinet:

• Investigate the rationalisation of the service areas of Planning Policy and Transportation, Policy and Conservation, Road Safety and Public Transport  to achieve savings
• Investigate the rationalisation of the service areas for Urban Regeneration, Business Development and Town Management to achieve savings

  xiii The following areas be pursued by the Corporate Management Team:

·        Eliminating non-essential expenditure (e.g. printing, publications, furniture, conferences, use of non-Council buildings for training purposes etc.).

·        Developing a protocol for engagement of consultants and agency staff.

·        Seeking further ways to reduce the pay bill (e.g. voluntary reduction in working hours, use of the voluntary/third sector).

·        Building upon the current work to develop a robust programme for workforce planning.

 

xiv  Consideration be given by Cabinet to the Citizens’ Panel response to an incremental increase in council tax over a reasonable period in order to bring the Vale in line with the Welsh average.

 

xv The Director of Social Services engage with the Vale Council for Voluntary Services and Citizens Advice Bureau on their ideas for more efficient and effective involvement of the voluntary sector, eliminating any areas of duplication and identifying saving, as part of the new Social Services Change Plan and report back on progress in this regard to Scrutiny Committee (Corporate Resources).

 

xvi Equality Impact Assessments for each proposed area of saving be undertaken by the relevant chief officer.

 

xvii Consultation is undertaken with the recognised Trade Unions

 

xviii That the Director of Finance, ICT and Property bring a regular quarterly monitoring report, commencing in June 2011, to Corporate Resources Scrutiny Committee on progress against the recommendations in the report

 

ixx The progress on the actions identified with ** in Section 3.6 of the report be reported to Scrutiny Committee as part of the usual recommendation tracking process.

 

xx The recommendations of the Scrutiny Committee (Corporate Resources) on the initial budget proposals for 2011/12 be referred to Cabinet for consideration as part of their deliberations on the final budget proposals.