County Council Budget Setting Meeting
Today I put forward a series of saving suggestions to the council as part of Labour’s response to the council’s budget. They were based on several ideas about how extra cash could be brought into the council and savings on administration including the shocking about the council seem to spend on consultants and top-heavy senior management structure.
My colleagues and I foolishly had a conversation before the meeting about whether the Tories would actually support them. We had deliberately put forward ideas that if accepted would allow them to discuss the final details throughout the year and to choose how they would spend the money themselves later although we obviously made the point about this being spent on the direct services to the public that they were cutting and I mentioned specifically things like the Fire Service, Adult Social Care and cuts to the Voluntary Sector.
What were we thinking? When it came to the debate it reverted to party political lines and I was told I “didn’t know what I was talking about”. This perhaps wasn’t surprising, but it was disappointed as all of these proposals have been discussed with council officers beforehand, including the finance director, and everybody agreed that they were deliverable and most people said we could actually have gone much further and expected savings far greater than the £5.7m we calculated, but again, we wanted the ideas to be prudent and sensible and not scare-off any councillors who were thinking of supporting us.
We lost the vote and the budget was passed without any amendments, although one Conservative Councillor did discreetly say to me afterwards well done and that I was absolutely right about one of the issues I’d raised.
Please see below for my full speech which includes some of the details.
ALTERNATIVE BUDGET NCC 2017/18 SPEECH
We can’t possibly support your budget of cuts to vulnerable people, so our alternative suggestions will aim to add a little bit of common sense.
Without our amendments, the budget will be a desperate attempt to deal with the financial mess the council is in after years of mismanagement and years of cuts!
As it stands it is a simplistic attempt to deal with the cuts passed down to us by central government who seem to have no understanding about local councils, or about the importance of the services the council provides to our local people here in Northamptonshire.
Without our amendments the budget shows no imagination and simply reacts to the position we find ourselves in with no credible thinking about how to get out of the hole you have dug yourselves into over the last few years.
The great plan, if it can be called that, is still to rely on the ill-thought out and costly idea of Next Generation Working. It’s been three years since the Conservative administration came up with this concept. And for three years we have been told that the answer to everything is to outsource services to a variety of ill-defined new organisations, and this will somehow magically bring huge amounts of extra cash into the council!
Somehow, by passing on responsibility to these new organisations we will be able to bring in extra cash by working more efficiently and by selling our services to other less imaginative councils. But how?
Currently our social care departments are struggling. The idea that we are in a position to sell our expertise to others is laughable. And three years on there are still no convincing plans as to how this will happen.
Councillors recently attending a briefing about how the new Children’s Trust will work and were given the example of two London Councils who have set up something similar with the aim of saving just £2m a year. We need to save far more than that, and in three years of planning this was the best example of any council anywhere that we could be given. True, they had managed to sell services to one other council at the other end of the country, but tellingly we were also told that this new venture is already in financial difficulty!
How an earth are you going to do better, especially given your bad reputation over the last few years.
These new organisations will have to pay VAT, where the council doesn’t now, they will have to pay corporation tax where the council doesn’t now, and despite putting them at arm’s length from the council, they will still have the same people doing the same job, in many cases being paid higher salaries, and obviously with less accountability to the public and less control from elected members.
The Conservative Administration has already spent millions and millions on these plans, nobody seems to be able to say exactly how much but we estimate it getting towards the £50m mark. That is money that could have been spent on delivering better public services, and according to the budget for next year there will still be much more money poured into this project. Again, money that could have been used to provide the day-to-day things our residents are crying out for such as social care and a better fire service.
We as Labour, know the council needs to be better than this! You need to be more imaginative and at last start looking at how the council can bring in extra money to try and make up for the austerity cuts our residents have been facing and will continue to face other the next few years!
In our alternative budget we once again make the case to use the council’s unique position to invest in revenue making schemes that will bring in literally millions of pounds that can be spent locally.
Currently your plans do hardly anything to bring in extra cash other than pile more and more tax rises on to the hard done to local tax payer, a half heartened attempt at using social Impact Bonds (one of our ideas incidentally) and rely on the irresponsible notion of Next Generation.
We call on this council, as a matter of urgency, to borrow in the short term to ensure the long term financial stability of the council and the long term stability of local public services.
I know what you’re going to say! “Here we go again, Labour borrowing money to spend”, but you’re wrong! And let me once more, try to explain why.
There is a huge difference between borrowing money just to spend on propping up a failing budget, (and to an extent that is what you’re already doing by capitalising transformation money), and borrowing as an investment to make a profit that will enable extra cash to be spent on services for years ahead.
We don’t understand why you don’t get this! Other councils around the country do, both Labour and Tory!
I’ll try to explain it simply, if you take the example of a small shop. It would be business suicide and complete folly for them to borrow money to pay their electricity bill. But for them to borrow money to invest in their business, to have a shop refit or to invest in new lines of stock which would in turn lead them to make more profit so they can afford to pay their electricity bill, makes perfect sense. Its basic business economics and I hope you get it now, it’s borrowing to invest, not to spend!
The figures in our alternative budget are taken directly from another council’s budget. Their plans expect a net investment return of only 2 or 3% (and we have chosen the more prudent 2% figure for our calculations), a figure that the businesspeople among you will recognise not only of being achievable, but actually quite a modest ambition.
By re-profiling reserves this will bring in an extra 700,000 pounds a year into the council for the length of the medium term plan and will start to bring in much more after that. But you could actually do so much more than this if you just have the foresight and imagination to get involved in this project.
I was at a conference the other day where the deputy leader of Manchester City Council explained that they had invested in such a manner and had actually bought London Stansted Airport….who knew? They make £11m net profit a year! We could, and should, be doing things like that!
With this so called Next Generation model we need to look at staffing costs.
This council currently spends a small fortune on wages! A lot of this is on senior management and specialist teams. There are huge savings to be made by working more efficiently! And rather than cut funding to direct services and to the money we give to our voluntary sector partners, who often do huge amounts of preventative work that results in less need for expensive services later. You need to address this issue!
Take the Business Intelligence Performance and Business Transformation Teams for example. We currently spend £2.8m in staff costs in this area, and what value do they actual give the organisation? Is it necessary to have such big teams? The answer is no! Of course we need to be able to fulfil our statutory responsibilities and be able to inform robust decision making, but we need smaller more efficient teams of skilled individuals and it has been estimated that this alone could save £1.2m a year.
And the money we spend on consultants is nothing short of shocking!
There seems to be a culture of having everything checked by ‘experts’. We already have highly paid professionals, many earning £50,000 a year or more, who are quite capable of developing ideas. They don’t need to constantly have their work checked by the expensive tick-box exercise of getting consultants to agree.
It’s impossible to find out how much we actually spend on consultants and that in itself gives a worrying picture about the council’s financial controls. Nobody seems to know, but the total bill is likely to be millions, how much did we spend on bringing in outside consultants on transforming to the Next Generation Model? Again, nobody seems to know, but one just person seems to have been paid more than half a million.
Of course there are times when bringing in expert advice is unavoidable but the council needs to move away from the culture of where this is the rule rather than the exception.
It seems at last you are beginning to wake up to this, and we understand the council has now said it will stop using consultants temporarily, but you need to go even further by bringing in a much stricter governance regime and frankly empowering our staff to have the confidence of their convictions and to stop this stupid tick-box culture of having everything checked by these supposed experts.
By focusing on this area alone we will save £1m, although everyone we’ve spoken to say the actual figure is likely to be much higher.
We currently employ 58 senior members of staff costing more than £5m a year. This at a time of austerity and a time when you are allegedly streamlining costs. We call for an immediate review, perhaps using the new ‘zero-based budgeting’ that you belatedly put so much store in, to look at this issue again. There are clearly savings that can be made, especially at a time of supposedly moving away from the traditional ways of managing services.
You currently pay the company LGSS (Local Government Shard Services) £38m a year on things like legal services, Human resources and finance, of which £11.3m alone goes on staffing (2017/18). We recognise this does help save money, but there are still savings to be found and you need to find those savings so the money can be spent on local Northampthshire people!
Far too often people working in IT, in procurement and other departments call on LGSS’s advice when they don’t need to. There has not been enough training and support to allow staff to perform better; very often they simply pass tasks on to others as a matter of course, you need to get better value for money as evidenced in the recent KPMG report which said this council does not offer value for money for the residents and tax payers of this county.
You need to look at each individual department’s working practices and set up individual Service Level Agreements with LGSS because we know that historically this saves money.
HOME TO SCHOOL TRANSPORT
On home to school transport this council currently spends over £7m a year on taxis! There is no way that this can’t be done more efficiently and cheaper. Currently, it is far too easy to simply authorise this expensive method of transport because there is little alternative
We need to find a better way. Let me make it absolutely clear, we are NOT suggesting any cuts to service in this area! Those vulnerable children need to get to school and this council needs to provide that service, but there are better ways of doing it.
A scrutiny report a couple of years ago highlighted the current inefficiency of the usage of NCC’s own vehicles. Other public sector organisation, such as local colleges, are currently undertaking good work on their transport plans and we should work with them to create an efficient transport system rather than relying on previously accepted practices . You need to question the appropriateness of expensive taxi journeys, and have better oversight about how individual cases are dealt with.
And while we’re looking at how we should do things differently, that brings us on to the PFI contacts this council is tied into. And please don’t try and blame Labour for this, you have been in power for twelve years and we’ve had twelve years of cutting services!
We understand the problems in getting out of some of these contracts, but just because something is difficult doesn’t mean it’s impossible, and a short term cost now could result in long-term gains. You need to start serious long tern financial planning. Too often this council’s finances have been directed by the short term electoral cycle, and what is needed now is a clear publically stated commitment to find a way forward on this issue!
It would be financially irresponsible for us to include any benefits from this in our planning for this year’s budget, and we haven’t done so, but it is obvious the council should start to address this issue. The political will doesn’t seem to be there at the moment and the longer we side-line this issue, the longer our residents will continue to pay extra for the services tied up with these deals.
This brings me onto the Chester Farm project! There isn’t a councillor here today that wouldn’t like this project to be completed, but we simply can’t afford it! So much cash has already been spent on this, and because of the financial crisis we find ourselves in, we cannot spend more! You need to stop any further enhancement of the site until it can be afforded and open to the public as it is.
There is no need and no financial sense in spending any more money. You should put up signs and description boards etc. and allow the public to visit the site as it is. There is no need for all the fancy interactive IT and enhancements that are planned. Get it open and let’s get the paying public through the gates and stop further spending.
Instead of the suggested £250,000 a year this will cost let’s bring in revenue and reduce our commitment. By not having to take out further loans we will save £300,000 a year on financing the repayment of capital loans. We’ve already had money from Heritage Lottery Fund so we’ll need to tell them that we are not stopping the project, just slowing it down but will open to the public as is.
We will need to stop the further stages planned by the contractors but we’re had discussions around this with officers and everybody agreed this is possible. We grant you it’s not perfect, but how an earth can we justify further expenditure in the current climate, while we are attacking some of the most vulnerable of our residents through your planned cuts! It doesn’t make sense when people are stuck in hospital and the fire service is losing its capacity.
Even after the Angel Street project is complete the council will still own over 300 different properties across the county. One of the easiest and simplest of our proposals is to review how these properties are used and where applicable what they are rented out for, we are not for one minute suggesting we push further costs onto our voluntary sector partners, this council has already given them enough problems over the last few years.
We know you are half-heartedly starting this, but you need to speed it up. Everyone agrees, savings in this area are easy to find, you just need to will to do it. We’ve put a figure of £300,000 on this but to be honest that’s a drop in the ocean and over the life time of the medium plan, providing you take this issue seriously the figure will be many times that.
All of these savings add up to close of £6m a year but to be honest, that is an absolute minimum. The truth is there is scope for that figure to be doubled or even trebled.
These savings should be placed into earmarked reserves to be spent in this financial year and can then be used to reduce the cuts to the fire service and to children’s services. They can be used to pay for improvements in footpath and road maintenance and most importantly can be used to mitigate the crisis in Adult Social Care, which while we understand is partly a national crises caused by central government, it’s a very real pressure locally and is certainly a priority for the Labour group.
If you vote to accept these amendments you will be agreeing to take money away from some of the inefficiencies of the council, bring desperately needed extra revenue into the council and most importantly agree to spend more money on local people and to safeguard local services.
In short, putting people first!