Agenda item

In attendance for this item were:

Michael Hudson, Chief Financial Officer

Stephanie Simcox, Head of Strategic Infrastructure Finance

John Hobbs, Director of Economy and Infrastructure

Nigel Hudson, Head of Strategy and Infrastructure

Ian Bamforth, Highways & Public Rights of Way Operations Manager

Cabinet Members with Responsibility (CMR)

Cllr Lucy Hodgson, CMR for Communities

Cllr Tony Miller, CMR for Environment

Cllr Ken Pollock, CMR for Economy and Infrastructure

The Chief Financial Officer (CFO) provided the context to the budget consultation process and advised that comments from the Scrutiny Panels would be discussed by the Overview and Scrutiny Performance Board and reported back to Council.

The key points included:

·         that the overall income from grants and council tax would increase by £6.2 million in 2019/20,

·         there was £35million of cost pressures from demand led services

·         the forecast outturn for 2018/19 at Period 7 was for a £3m overspend

Paragraphs 8.16-8.20 of the Report referred to Economy and Infrastructure developments and a £6.3m decrease in the net budget base budget, including switch to capital. The appendices referred to savings proposals, the capital programme, reserves and risks.  The 2019/20 Budget Book was in draft form but next year they would be available at an earlier stage in the process.

The Chairman invited questions and the following main points were made:

·         It was noted that the proposed redesign of the Economy and Infrastructure (E&I) Directorate made it one of the hardest affected Directorates whereas other Directorates had received additional funding. Recalling use of capitalisation during the previous year's budget setting, the Chairman asked about figures for 2019/20 and it was confirmed that £1.5m related to capitalisation.

·         The Panel had heard from several members of the public present regarding the proposed reform of the Archives Service and asked whether the proposed saving of £405,000 was a budget reduction? It was established that this was a reduction and was unrelated to accommodation costs around The Hive, which had been previously discussed with the Panel.

·         The Director explained that the Archives reform would reduce the Service to its statutory minimum. The reform figure followed consideration of nearest neighbours, as well as data from the Charted Institute of Public Finance and Accountancy (CIPFA). Analysis showed the Service was off the statistical norm, albeit acknowledging the excellence of Worcestershire's Service.

·         Given the competing demands faced by the Council, it would be a case of political prioritisation. Often in such circumstances the Management Team became inventive as in the case of Trading Standards which had undergone a similar exercise and continued to work to satisfaction.

·         The Director referred to the recently agreed Notice of Motion to Council, part of which would involve a Member Advisory Group (MAG) looking at the proposals as well as revisiting the Scrutiny Task Group work from 2015 – this work would help build a business case to deliver savings as well as continued provision of viable services.

·         The Director fully accepted the points made from the members of public, but public consultation exercises always ranked heritage services at the bottom in terms of prioritisation of services, which was the reality the Directorate had to work with.

·         The CMR for Communities added that the Council was in unprecedented times which meant difficult decisions had to be made, however she pointed out that the commercial part of the Archive Service, which generated income, was separate to the reform plans.

·         Whilst cultural services had ranked low in the Council's survey of residents, some Panel members pointed out that this would always be the case with lesser used services but did not mean that the Council should not support such services.

·         A Panel member perceived that savings wouldn't be forthcoming unless staff were asked to consider ways to be more efficient and innovative and that this was all part of the Council for the future.

·         When asked whether the Directorate was still looking for Archives to perform the same service but with more innovation, the Director reiterated that the target was to provide the minimum statutory service whilst incentivising innovation, and not to the extent that staff were demotivated – getting the balance right would need further work in his view.

·         The CMR for Communities pointed out that this was a draft budget and said that she was keen to hear views and wanted to protect as much of the service as possible, although it would be difficult, which was why the MAG had been set up. She referred to the 2015 Scrutiny Report, the aims of which the Service had been working towards.

·         The Panel Chairman perceived that Worcestershire Archives and Archaeology Service (WAAS) was very successful in terms of income generated from its employees, having generated £1.47m that year, and the Director agreed that this was very successful and that the aim was for the Archives Service to become as far as possible, self-financing.

·         Members asked about potential for further charging for WAAS services, and were advised that a lot of work had taken place about charging, including with district councils, although some were more forthcoming than others – this was something it was hoped the MAG could look at

·         A Member asked whether a risk assessment would be carried out regarding the potential loss of accreditation, reputation and subsequent reduced income for the WAAS as a result of budget reductions, as referred to by the public participants, to be advised that risks were included in the original proposal and that some could be mitigated by more staff or better IT. The reputation and thoroughness of WAAS staff drew people to use the service and these factors would all be worked through in the business case.

·         When asked how the draft budget saving figure of £405,000 had been reached, the Director advised that the estimate was based on the minimum staff levels to maintain the statutory minimum service, however the reform project was in its early stages and the final answer would be shaped by further discussion and could well be different.  Reducing the target would mean finding the money elsewhere. The CMR advised that the MAG would help guide this process and reiterated that this was a draft budget.

·         A Panel Member who had also been part of the Scrutiny Task Group Review of WAAS recalled the findings about income generation, marketing and charging district councils and that this seemed to be taking a long time to achieve and that staff may benefit from expertise elsewhere in the Council or investment? He also asked what would be the potential cut in income generation. The Officers present acknowledged that generation of income had perhaps not been pushed hard enough, however staff were now working very hard and improvements had been made, for example in respect of charging for services linked to planning applications. It was confirmed that the WAAS charged district council planning authorities where applicable. The Field Service was the main driver of income.

·         The Panel requested figures for previous years' income in order to see the trajectory of income increase, and also requested the cost of providing a commercial arm of service.

·         It was confirmed that the public survey was completed by a statistically representative proportion of the population, although everyone acknowledged that people tended to value a service they had used.

·         The Chairman pointed out that based on the discussion and public participation, the Panel may want to put forward comments to support maintaining the WAAS accreditation which was so important to its reputation and ability to generate income. 5 Panel Members supported this view although some did not feel they had sufficient knowledge at this stage. The Chairman therefore suggested the way forward would be to look for more efficiencies and savings to a point which still maintained the service's accreditation and national reputation and did not see important historical documents transferred elsewhere.

·         A Panel member commented that establishment of the MAG to consider the Archives reform was a good outcome from Council's prior discussion and the role of this group in guiding the way forward was acknowledged.

·         The Panel discussed the proposed redesign of the E&I Directorate which aimed to save £1.1million, (representing approximately 10% of the Directorate's staff). Members were reassured by the fact that a significant proportion of the savings total (approximately £650,000) would be accounted for by deleting vacant posts.

·         The Director conceded that remaining staff would have to work harder, although his staff were adaptable and receptive to change. In general, the approach was to identify the minimum staff needed to be effective, thereby reducing the headcount intelligently.

·         A Panel member felt this response made the Directorate reform savings figure more manageable. When asked how the remaining £450,000 would be found, the Director advised that no particular department was being focused on and sometimes there were opportunities for restructuring, for example when a senior manager retired. It was confirmed the E&I Directorate had 473 staff, including some vacant posts and that 22 posts had been deleted to account for £650,000 savings.

·         When asked whether such savings reforms improved productivity the Director said this was inevitable and Panel Members commended the E&I Management Team for its leadership in driving increased productivity and innovation from necessary efficiencies.

·         A Panel member queried the impact of reforms on staff wellbeing and whether the example of staff on 35 hour contracts working 53 hours was sustainable? In response the Director advised that staff were not complaining, and the general trend was to do the work required, however he felt mindful of work demands and flexible working helped. He believed work levels were sustainable.

·         When asked about the proposed £500,000 saving through service specification changes to highways maintenance, the Director advised that savings from less road markings would not be safety critical.

·         In relation to cost pressures and the projected increase in waste disposal costs (of £0.4million) as the number of households increased, the Panel noted discussions taking place with District Councils on ways to help cover the extra waste disposal costs of garden waste collections in future years and would await the outcome of this.

On behalf of the Panel the Chairman reiterated the need for the Scrutiny Panels to have access to budget figures (2019/20 Budget Book) information to enable effective budget scrutiny and noted that it was the intention next year to provide the Budget Book at an earlier stage in the process to enable more effective Budget Scrutiny. The Chairman requested the new final budget figures (budget book for 2019/20) be circulated to the Panel as soon as they were available since the Panel was keen to monitor figures for both budget and performance throughout the year.

Following the meeting, the Panel's comments would be summarised and reported to the Overview and Scrutiny Performance Board on 24 January.