To receive a presentation from the Section 151 Officer.

The Chief Officer - Finance verbally updated the Committee on the future direction of budget strategy, the key points were as follows:

 

1.       The Council was currently consulting on the proposed budget for 2014/15; the consultation would close on 20 December 2013.  This would inform the decisions to be made by Cabinet in January 2014 and Full Council in February 2014.

 

2.       Significant savings had to be made due to reductions in government grant and budget pressures in essential areas, particularly Adults Wellbeing; savings of £15m had to be made in 2014/15.

 

3.       Presentations had been given to Cabinet Members and Group Leaders.  Presentations had also been given to, or were scheduled for, each political group.

 

4.       The Chief Officer - Finance invited the Committee to identify what additional information and engagement it wanted in terms of the scrutiny of the budget process, albeit acknowledging that time was limited.

 

The Chairman commented that there had been substantial overspend in Adults Wellbeing for many years and, whilst recognising the on-going efforts of the Director, questioned how this could be brought under control.  In response, the Chief Officer - Finance advised:

 

a.       The starting point for Adults Wellbeing going forward would be the actual expenditure rather than the current budgets, to avoid any in built overspend.  Consequently, there was a higher savings target to take this into account.

 

b.       The authority needed to gain assurance around identified savings, with detailed delivery plans signed off by Directors.  In particular, the Chief Officer - Finance and the Director for Adults Wellbeing were working to ensure that the budget was realistic and plans were in place which were deliverable within the relevant timescales.

 

c.       Budget monitoring showed a downward movement for Adults Wellbeing compared to the previous position and, although a significant overspend remained, this indicated that it was going in the right direction.

 

d.       In response to a question about the measures being put in place to ensure that data was accurate, the Chief Officer - Finance advised that some of the finance team had been redirected to support better management information and forecasts.  He added that, ultimately, he could only make judgements based on the information put in front of him.

 

The Chief Officer - Finance responded to questions from Committee Members, the principal points included:

 

i.        Further to point a. above, with expenditure as a starting point, it was reported that the authority was retendering contracts based on prices in the market and the experience of officers, and this would inform the budget process.  Savings would be delivered through the reorganisation of structures and reductions in staffing, with a number of consultations currently underway.  Further savings would be achieved by not filling vacancies in particular areas and by reducing the use of agency staff.  It was reported that each line of savings had a plan beneath it.

 

ii.       The assumptions in terms of Adults Wellbeing were based on current transition rates and there was no reason to expect these to change materially, although this remained a possibility given the variables involved.

 

iii.      Members might wish to focus on the robustness of the care savings and officers could provide detailed projections if required.

 

iv.      It was noted that the Council would need to stop services in some areas but it was important to provide opportunities to local communities to take services on.

 

v.       Further to point a. above, it was reported that the projected overspend for the Council (using August 2013 figures) was £3.9m, with the figure for Adult Wellbeing being £4.3m.

 

Committee Members made a number of comments, including:

 

•        It was refreshing that actual expenditure figures would be used to inform the budget, as some Members had been requesting this for some time.

 

•        Sensitivity was needed about comments on figures, as hundreds of thousands might be a relatively small in global budgetary terms but could be equivalent to the entire budgets of service areas at risk, many of which were highly valued and beneficial to the public.

 

•        It was requested that communications include more visual representations, such as pie charts, to assist with contextualisation and understanding.

 

•        It was noted that budget holders had to be responsible and keep within targets.

 

The Vice-Chairman made a number of observations about how the Committee could engage with the budget process going forward, including:

 

1)      In the previous year, there had been a joint Task and Finish Group involving representatives from both the Health and General Overview and Scrutiny Committees that had looked at the Adult Wellbeing budget in detail.  However, it was difficult for the group to get to grips with the detail of the budget for the year ahead without the context of the operation of the directorate during the current year.

 

2)      Therefore, if a particular portion of the budget for next year was to be subject to detailed scrutiny, it would be helpful if budget monitoring for the remainder of the current year be provided in order to have visibility of the issues being faced, not only in terms of the savings but also changes to service delivery.  It was noted that the budget monitoring reports tended to be over two months’ in arrears but it was felt that these should be released earlier.

 

3)      It was commented that there was a need to address any remaining culture of complacency within directorates about meeting financial targets, as the Council no longer had the resources available to use in mitigation.

 

4)      In addition to focussing on Adult Wellbeing, there was a need for the Committee to gain an understanding of the consequences of the stopping certain activities on retained services.

 

5)      There was a tendency to ignore the Education budget, because it was ring-fenced in financial terms.  However, the scope of primary and high schools to provide support and capability at community level through the way in which the funds were spent and school facilities made available to and shared with local communities seemed to be being missed in how the thinking on working with schools/academies and the impact of service cuts was being rationalised.

 

The Chief Officer - Finance commented that the consultation contextualised the budget on the basis of deliverability, the starting point for Adult Wellbeing being an actual expenditure position, and the reality that the savings proposals would impact on service provision.  The Chairman said that one of the roles of Councillors would be to prepare communities for what was to come and to encourage local councils and community groups to take responsibility for services that the Council could no longer provide.

 

The Vice-Chairman commented on the implications of the cessation of services by Herefordshire Council on town and parish councils, including:

 

a)      Local councils were realising the extent of challenges but the capacity to respond was variable.

 

b)      There was a critical timing issue, as councils were already in the process of determining their own budgets but there were still uncertainties about the services that might need to be supported. 

 

c)      More work was needed at a county level to help councils understand and reduce the risks of delivering services, with support given to minimise costs, avoid duplication, and undertake commissioning locally.

 

d)      Herefordshire Council had a responsibility to identify and address emerging gaps, or at least make communities aware of them.

 

The Chief Officer - Finance commented that this was an important issue and Councillors had a key role in communicating messages, alongside the budget consultation.  It was acknowledged that capacity was an issue and authorities needed to work together through the transition process. 

 

The Chairman, Vice-Chairman, and other Members made a number of observations, including:

 

i.)       It was commented that the Council had a mixed track record with communicating the position to the town and parish councils.

 

ii.)      The Bromyard locality had held a meeting with local councils over a year ago, where representatives indicated that they were willing in principle to take services on.  However, the response of Herefordshire Council, about what services could be taken on and how councils might organise these on a locality basis, had been unacceptably slow.   An example was given of request from Bromyard and Winslow Town Council about the possibility of taking on the operation of a car park, where the lack of a firm offer prevented the council from budgeting accordingly.  This was not considered an isolated example.  The Chief Officer - Finance said that he was due to speak to town and parish councils as part of the budget process, he would discuss the specific example with the relevant Director, and the importance of reacting properly to requests from local communities was noted.

 

iii.)     The background to the establishment of locality working and forums was noted and concerns were expressed about declining levels of support, due to officers being overstretched, and the consequential risks to the deliverability of local solutions.

 

iv.)     It was commented that there was an outstanding request for assurance about the ability of the finance systems to deal with the collection and distribution of funds between local councils, particularly to ensure that costs for services within localities were not entirely paid for by town councils.  The Chief Officer - Finance suggested that this could be looked at in more detail after the meeting.

 

v.)     It was suggested arrangements could be made to invite the Chief Officer - Finance to the Market Towns’ Forum.  This discussed issues of mutual concern, including the potential devolution of certain services from Herefordshire Council.  It was noted that there needed to be proper engagement with local councils to enable them to make informed decisions.

 

vi.)     It was commented that there were departments within Herefordshire Council that had consistently managed to stay within budget and cope with cuts, even though some of these teams could now be substantially reduced or disbanded.  It was suggested that the authority needed to tap into the knowledge of successful teams and apply best practice to other areas, particularly to the issues in Adult Wellbeing.

 

vii.)    A Member in attendance expressed concern about the risks associated with the proposed savings, particularly in terms of the loss of expertise and the unintended consequences arising from cuts being made within silos without due regard to broader implications, with costs likely to bounce back into other budgets.  Reference was made to the budget reductions for Cultural Services, specifically to the implications for The Courtyard Arts Centre and its nationally recognised outreach work with older people and dementia sufferers.  The Chairman commented that recommendations from the Task and Finish Group on Cultural Services would come forward in the near future, he added that there was particular anxiety about the lack of an evidence base within the Council about the consequential impacts of the proposed cuts.

 

The Chairman proposed, and the Committee supported, the following recommendations.

 

RESOLVED:  That it be recommended to the Executive that:

 

1.       Committee Members be provided with information on both budget monitoring for 2013/14 and budget planning for 2014/15, and if considered necessary a joint Task and Finish Group involving representatives from both the Health and General Overview and Scrutiny Committees be convened; and

 

2.       Assurances be provided about progress with the devolution programme and that town and parish councils would be given adequate support to enable them to take over and maintain services locally.