Following on from minute 122, the Director of Law, HR and Asset Management circulated the Budget Proposal agreed by the Cabinet at its Budget Meeting held on 21 February 2011 (minute 327 refers). The Labour Group spokesperson indicated to the Committee that he wished to examine a number of matters contained within the budget in relation to –

·  Early Voluntary Retirement (EVRs)/Voluntary Severance

·  Restructuring

·  Specific Grants

·  Inflation

·  Adult Social Care

·  Solar Energy

In response to questions from Members, the Director of Finance provided information in relation to the funding of EVRs/Voluntary Severance and, in particular, the capitalisation through prudential borrowing of the statutory redundancy element of £6.4m over 2010/2011 and 2011/2012., based upon approximately 1100 members of staff leaving the authority, on a voluntary basis, between December 2010 and June 2011. The Director of Law, HR and Asset Management commented also that an additional 212 people, who were materially affected by the Council’s proposals, had subsequently been given the opportunity to apply for EVR/severance. Of those, approximately 100 had expressed an interest and were in the process of being evaluated. However, no savings assumptions had been made in relation to those posts and the Director of Finance confirmed that if they were to leave, the saving to the Council would exceed the cost of severance.

The Labour Group spokesperson expressed his concern that no evidence had been provided, in advance of the Budget Council meeting, to demonstrate to Members how services would be provided following 1100 members of staff leaving the Council and he sought clarification as to how the figure within the budget proposal of £2m for restructuring and retraining had been arrived at. In response, the Leader of the Council indicated that the figure represented the totality of assessments that had been undertaken by all Chief Officers, who had also been required to prepare an appropriate business case that would be considered by the Strategic Change Programme Board, for funding from the Efficiency Investment Budget. The Director of Law, HR and Asset Management commented that at the present time, the various restructure plans were in various stages of completeness, given that in some areas, significant numbers of staff would not leave until June 2011. He envisaged that plans would be made available for scrutiny, once they had been completed.

In response to a question from a Member as to how the budget process this year differed from previous years, the Director of Finance suggested that the fundamental difference was a loss of £51m in Government grants to the Council. He commented that, of that sum, there had been a loss of £10.1m in Specific Grants. In response to questions from Members, as to the impact of the loss on Council services, he commented that the main loss related to Early Intervention Grant (£4.8m). However, no overarching analysis had been undertaken and individual Chief Officers would be better placed to evaluate the impact on services. Although there had been a grant funding shortfall of £10.1m, there had been major changes to grant provision, with many now included within the general grant, which gave local authorities the greater flexibility that had previously been sought.

In response to comments from Members, the Director of Finance confirmed that a zero provision for inflation had been included within the budget proposal, despite the rate of inflation currently at 4%. However, the rate of inflation was due, in part, to the increase in VAT, which was recoverable by the Council. He commented also that the Council was looking to renegotiate all of its 50 largest contracts, but accepted that the reduction in grant provision meant that the Council would not be able to spend that money in the local economy. Nevertheless, Chief Officers were expected to manage their budget allocation accordingly and take such steps as were necessary to contain expenditure. In response to a request from the Chair, the Director agreed to present his Cabinet report on Procurement Efficiencies (minute 252 (Cabinet – 9 December 2010) refers) to the next meeting of the Committee for consideration.

In response to further questions from Members with regard to the increased budget of Adult Social Services by approximately £2m to meet an increased demand in relation to the care of older people, the Director of Finance indicated that it would, in part, be funded from the additional £4.9m made available by the Government to be deployed, with the agreement of NHS Wirral, to support Adult Social Care, where there was a health benefit.

The Labour Group spokesperson referred also to the proposed capital investment of £2.8m in solar energy on appropriate Council buildings and requested information related to the timescales for payback. The Director of Finance indicated that the proposal was an Invest to save scheme that would result in payback within five years. A detailed report would be presented to the Cabinet and, if approved, would be built into the capital programme. The Director of Law, HR and Asset Management commented that assessments were being undertaken regarding the suitability of provision of photovoltaic cells on all Council buildings and a business case for each would be included in a detailed report to the Cabinet. Although payback would vary from building to building, the use of solar energy would also have a significant impact in reducing the Council’s carbon footprint.

It was moved by Councillor Gilchrist and seconded by Councillor Brighouse –

“That this Committee has considered the explanations given by officers in response to questions covering the steps in hand to re-organise and restructure services in the current financial situation.

The opportunity has also been taken to hear from the senior representative of the trades union setting out concerns about the pressures facing the workforce as services are reorganised and restructured.

This Committee understands the challenges facing senior officers, management and workforce in the current climate and does not underestimate the scale of the task ahead.

Members are therefore anxious that future progress reports on the Change Programme, the monitoring of performance and the changes underway should be clear on the risks and issues that arise.

Committee recognises that the Cabinet’s Budget proposal has set out to retain and maintain services in this period of financial uncertainty and therefore welcomes the proposals”.

It was moved as amendment by Councillor Davies and seconded by Councillor Kenny –

“That this Committee believes that there is a significant lack of information on key issues relating to the budget, notably EVRs, restructuring plans, the impact of cuts in specific grants and how a zero provision for inflation will be funded. This lack of information raises serious doubts about the sustainability of the budget proposed by the Conservative/Liberal Democrat administration. Committee therefore asks the Council to reconsider these budget proposals”.

The amendment was put and lost (4:6)

The motion was put and carried (6:4)

Resolved (6:4) (Councillors P Davies, B Kenny, A McArdle and J Stapleton voting against (1) to (5) below) –

(1)  That this Committee has considered the explanations given by officers in response to questions covering the steps in hand to re-organise and restructure services in the current financial situation.

(2)  The opportunity has also been taken to hear from the senior representative of the trades union setting out concerns about the pressures facing the workforce as services are reorganised and restructured.

(3)  This Committee understands the challenges facing senior officers, management and workforce in the current climate and does not underestimate the scale of the task ahead.

(4)  Members are therefore anxious that future progress reports on the Change Programme, the monitoring of performance and the changes underway should be clear on the risks and issues that arise.

(5)  Committee recognises that the Cabinet’s Budget proposal has set out to retain and maintain services in this period of financial uncertainty and therefore welcomes the proposals.

(6)  That Committee places on record its thanks to officers and staff witnesses for their advice and assistance during this especially busy period.