Cambridge City Council’s budgets were yet again under scrutiny at a meeting at the guildhall this evening (13th February 2009). The meeting was scheduled to enable scrutiny of the opposition budget presented by the Labour group, but because of the significant changes in the Liberal executive’s budget made in January the scope of the meeting had been extended to allow further questioning of the council’s “real” budget.
Questions on the Council’s Budget
The council will receive a Government grant of £530,930 via the Local Authority Business Growth Incentive. Opposition councillors asked if this was ring-fenced, and were told by officers that it was not restricted in any way. Officers reported that it was made under / subject to section 31 of the Local government Act 2003 (though quite what information that gives anyone I don’t know). The council leader Ian Nimmo-Smith said that he saw this grant as reflecting the lobbying which has been going on to request more revenue raised through business rates to be returned to and spent within the city. The report to the meeting indicates the grant is being put towards funding the Lion Yard refurbishment.
Cllr Herbert, leader of the opposition Labour group, kicked off with the rather odd question in my view of why the savings proposed were not equally apportioned across the council’s departments. He asked why the responses to the extra pressures which had been brought into the budgeting process in January had been focused on particular areas. I don’t know what answer he was expecting but surely no one was surprised when the council’s director of finance, David Horspool, said there was no rhyme or reason underlying the different percentage savings beyond different areas presenting different opportunities for savings.
Cllr Herbert’s second question was much better, he asked about the proposed further service reviews, questioning when they were expected to report. The director of finance said that there were no current plans to speed up the reviews, they would be reported – as they were this year – with September 2009’s Medium Term Strategy, they would not be expected to result in savings in the forthcoming financial year. Cllr Nimmo-Smith said that this was in line with the council’s policy of not counting its chickens before they have hatched and that it was a prudent approach, and noted it was difficult to estimate in advance of the reviews what savings might emerge. He said there a possible approach of “going top down” and saying to officers “change the service to make saving X”, though this was not the route generally being taken with in the council. Opposition councillors wanted to know what service reviews were proposed, Ian Nimmo-Smith said that a provisional list had been circulated to group leaders and a final list would be produced.
Cllr Herbert’s third question asked about the propensity of the council to carry over revenue funding each year (he said they also do this with capital funding). He is referring to the practice of where the council fails to spend money it intended to, which is often reallocated to the same area for the next year. Cllr Herbert was questioning the oversight by councillors of where this is occurring, and noted that often such carry-overs indicated that a service area was not delivering what they had been asked to. He asked about the council’s policy with respect to carry-overs, and asked and additional question of if there was a clear policy of reviewing any vacancies arising before it was decided to fill them (this is somewhere the council have already been making savings). Cllr Nimmo-Smith said that all proposals for carry-forwards were considered by the relevant executive councillors and he would also look at them. The director of finance concurred saying each was considered on a case by case basis.
Cllr Howell, the only Conservative on the City Council, was the next to ask questions. He asked about inflation assumptions in relation to wages, prices and council tax. The director of finance said that wages were increasing by 1.5% in 2009/10 and 2010/11 (the current year’s being under negotiation still). He said council is assuming that prices, once wages are taken out will be dropping – the assumption is that inflation there will be negative. On Council Tax the director of finance confirmed that would be increasing by 4.5%. Clearly Cllr Howell was pointing out the inconsistency between low and negative inflation in areas of council spending with the above inflation increase in council tax of 4.5%. Cllr Howell asked if there was still a possibility of a last minute cut in the proposed council tax increase.
Ian Nimmo-Smith said that he could give a political speech, or give some hard facts in response to Cllr Howell’s points. He justified the 4.5% council tax increase, which he accepted as “a bit above inflation” as being due to the shortfall in the increase in external support, by which he means central government grants. He also pointed to the concessionary fares scheme, which he said central government was underfunding by £1.4 million. He said that benefits of the population rising had been offset by the reduction in central government support. The council leader said the rise was modest, and said that in absolute terms Cambridge was not a high taxing council and saying that in league tables for district councils Cambridge was about 30th. Unsurprisingly Cllr Nimmo-Smith did not commit to considering reducing the proposed 4.5% council tax increase as suggested by Cllr Howell.
Cllr Herbert asked if there was any update on projections of the state of the council’s reserves, pointing to the predictions of £3.5 million in 2009/10 dropping to £1.5 million in 2010/11 and to £2 million in 2011/12. He didn’t really get an update, but the director of finance spoke instead about where the pay-back of proposed borrowing to keep the state of the reserves acceptable was accounted for.
Cllr Howell asked what political leadership had been given to service reviews about where savings could be found. The leader said that executive councillors were presented with options by officers, implying that the initiative did not come from councillors. He did say though, perhaps as an exception, that the service review of CCTV which led to savings was at his instigation. Cllr Cantrill said that he did identify areas he’d like to look at within his own area of responsibility and cited human resources as an example. Cllr Nimmo-Smith said that some opportunities to look for savings come about naturally for example when contracts come to an end. Cllr Reid said that she had worked with officers to seek savings in Tourism and on setting profitability targets for car parks.
Independent Cllr Hipkin suggested that there were savings to be found in duplication of council activity in areas which fell across the responsibilities of different departments and different executive councillor responsibilities. He asked about the mechanism for identifying such savings, Ian Nimmo-Smith said this was the job of the “corporate management team”.
Opposition Budget
The meeting then moved on to scrutinise the Labour budget, presented as an amendment to the ruling Liberal Democrat’s proposals.
Cllr Herbert first said that he didn’t think the council were responding with sufficient urgency to the current problems. He said that in contrast to usual opposition budgets he was making suggestions aimed at the longer term stability of the council’s finances. He was proposing to expand the councils service reviews and seek to save an additional £250K in the forthcoming year. Particular areas he suggested looking at were repair and renewal funding, particularly the city services vehicle fleet.
Cllr Herbert said he had become a lightning rod for complaints about the city’s swimming pools, with 3-4 unsolicited phone calls a week on the subject. He said he was happy to share his post-bag on this with the executive councillor responsible, Julie Smith. He said that an adequate quality of service was clearly not being provided.
Cllr Herbert was recommending removing the planning role of Area Committees, he wanted improvements to the Taxi Card scheme which he said had seen its budget cut year on year, he wanted people to be able to use two vouchers for longer journeys. He also said there was room for improvement in street cleaning. He said he did not accept the cut in the s106 budgets and said there was a need to balance those budgets for inflation (ie. the interest or some of it should be left on the accounts).
Cllr Herbert complained that scrutiny was not effective in the council, and suggested more member involvement in the service reviews. He finished by saying that the Labour group did not see the need for the Liberal’s proposed £1 million backup loan.
Cllr Reid was began the questioning of Cllr Herbert’s proposals. She asked about the section 106 interest, which the Liberals are moving into “general funds”. Cllr Herbert is proposing spending it on: “additional youth and recreational projects and extra environmental improvements”. Despite this, Cllr Reid asked if, as the areas which this money can be spent on are governed by guidelines and agreements, it was possible to do what Cllr Herbert was suggesting. Cllrs Reid and Herbert then argued about if there had been a cut in s106 funding, Cllr Reid saying: “there is no cut”, and Cllr Herbert: “in fact there is a cut”. Money which would have been spent on environmental improvements and other areas where s106 money can be spent is being taken away from those areas, so I think it is clear that there is a cut. It appears that the Liberal Democrats have convinced the Cambridge News that there is no cut, as on Saturday they published a retraction of their story about the removal of funds from the s106 budgets. I was disappointed by the Cambridge News’ capitulation. The Labour proposal is not to make this cut.
Cllr Pitt said that he had been teaching his pupils inequalities that day and pointed out £1.3 million is less than £1.5 million. I agree with him on that. His point relates to the fact £1.5 million is the target minimum level for the council’s reserves. The Labour proposals are to dip below that briefly. In the Labour budget amendment published before the meeting this was clear, and as far as I can see, correct. It states that the council’s reserves will: “fall slightly below the current recommended minimum balance of £1.5m ” and the figure they will drop to is given as £1.3 million. An amendment to the amendment was introduced by the Labour group so the error may have been included within that; that was not available in the public gallery and will have been corrected before the council meeting.
Cllr Rosenstiel asked for “Section 25 advice” on the Labour proposals. Section 25 of the Local Government Act 2003 states that the finance officer must report to the council on “the adequacy of the proposed financial reserves”. The director of finance said that it was a judgement matter, he said the £1.5m is a working balance, there for a rainy day / exceptional circumstances. He said that you can make the argument that this is the rainy day, the extreme circumstance, and dip in to the reserve. He noted that the proposal is to return the reserves to a higher level by the end of the period. He said it was difficult to describe the Labour proposals as unacceptable. He said that if the reserves were to be dropped to £30K he would be giving advice under section 25 at that point. I think you could interpret that as saying in the opinion of the director of finance the Labour proposals did leave the reserves in a more than adequate state.
Cllr Cantrill questioned how Cllr Herbert planned to accelerate savings. He suggested that the reserves problem was more significant as there was more risk that they might be required under the Labour budget which was more risky as it depended on savings not yet achieved. Cllr Cantrill asked: “where is the detail”.
Cllr Pitt took the recommendation for ” ongoing increases in savings targets in 2009/10 of £250,000, in 2010/11 by a further £350,000″ and said that as they were ongoing he could multiply them up and over four years they came to over a million pounds. His clear implication was that one million pounds sounds like a lot more money than the £250K figure Cllr Herbert was talking of, and while savings of £250K might sound achievable, £1 million sounds harder. Perhaps he will be reporting his real life application of his “inequalities” skills to his pupils on Monday? Perhaps maths education in this country has become so fluffy that lessons on inequalities at school now include assessments of how big numbers “feel”?
Cllr Julie Smith commented on Labour’s proposed efficiency savings, and on their stated objectives. She said that recent efficiency savings had been saving about 3% per year, which so far had been balanced out by inflation running at 3-3.5%, future savings she said would result in reductions in the absolute levels of budgets as inflation was flat. She also asked Cllr Herbert where he thought savings could be found without cutting services. Cllr Herbert pointed again to the repairs and renewal budgets and the level of the reserves. He also suggested there were savings to be found in Cllr Smith’s area of responsibility. Cllr Smith said that she could find savings but at the expense of cutting things Cllr Herbert wouldn’t support cutting, she said she could save £50K by dropping the big weekend for example.
Cllr Bick asked about the line in the Labour amendment suggesting the council “transfer equivalent of £60,000 in service delivery from city centre street cleansing budget to target most neglected residential areas”, asking what the impact of that would be. Cllr Herbert explained that there had been problems with some residential streets not being cleaned, he said this £60K represented about 5% of the total budget. Cllr Herbert was heckled asking how he had arrived at the £60K figure, why not £50K or £100K he replied that an estimate was a good way of raising the issue. This opened him up to accusations of using the budget process to make make a political point rather than making realistic costed suggestions. He defended this by saying that his approach was reasonable, and it wasn’t worth requesting officers spending time working up costed proposals which weren’t going to be taken on board. Cllr Herbert said the council does offer a “reactive” service, but pointed out that the fact that needs to be used means that there are areas where people aren’t requesting it and the general service level is not good enough. He said the leader of the council, writing in a Liberal Democrat publication, had said the street cleaning service was not as good as it could be. Both were careful not to be critical of the staff.
Cllr Howell said that most of the Labour amendment would not be out of place in a Conservative amendment. He said that the size of the state is unjustifiably high, he too would like to see efficiency savings, and would go beyond that and look at what the council was delivering, and would: “look at what we need to do and what we don’t”. He said that for even the Labour party to be pushing for lower rates of increase in the council tax showed it was too high. He agreed with Cllr Herbert about the problems with the level of service from SLM, and I believe he supported the proposals to look to see if another company could offer a better deal.
Cllr Howell gave his regular spiel on Area Committees, agreeing with the Labour proposal to remove planning from them. He said they were not working and few members of the public attended them. He pointed to the high costs of running the committees. His full argument on this subject can be read on his website.
My view is area committees have the potential to be excellent, I particularly support councillors setting local police priorities; however they are appallingly run and badly publicised and the council and councillors don’t appear to be really interested in improving them.
Cllr Blair spoke to say that she had something to say on street cleaning, but as the meeting had now moved on she wouldn’t say it now and would leave it until the council meeting in two weeks time. She also told the meeting she was attending as an alternate for Cllr Shah, which I presume gave her voting rights on the committee. Cllr Blair was still babbling about the fact she had something to say but wasn’t going to say it now, and was getting heckled by others, and encouraged by the chair to actually make her point when she was abruptly cut off by Cllr Smith. Previously Cllrs Blair and Smith have appeared to be close allies with Blair acting as a willing scapegoat taking the flack for Cllr Smith on both Jesus Green Lottery Bid and the Accordia Playground debacles.
Cllr Smith was interrupting to point out Cllr Howell had made a point on the SLM (Swimming Pools) contract which warranted a response from officers. A council officer said that a consultant had been employed by the council an he had advised that the council was unlikely to get a better deal than they had with SLM if they did go out to the market. She accepted the council had not actually tested the market, but said it had accepted the consultant’s advice. She said this had been reported to councillors in the confidential report on the decision to extend the current contract or not. She said: “we have a very favorable deal with SLM”.
Cllr Cantrill brought the subject back to street cleaning, and complained that Cllr Herbert had misused the process to introduce “concepts” and “political points”, rather than suggest something tangible which could be adopted by the council. Cllr Herbert responded by asking if Cllr Rosenstiel was present, he wanted to ask him if he felt the city was “getting the cleaning service it was entitled to”. The chair, Cllr Taylor wasn’t very happy with this, saying Cllr Herbert should be answering Cllr Cantrill’s point, not questioning Cllr Rosenstiel. Despite this Cllr Rosenstiel replied: “I do not accept that” and “If we take £60K from the city centre cleaning budget then the standards required of us in the city centre won’t be met”. Cllr Herbert complained about the chair’s ruling saying it was an example of why “scrutiny does not work in this chamber” refering to Cllr Cantrill’s charge he said that the purpose of the amendment was not to seek cheap headlines, adding “I will do that on occasion”, “but not generally”.
Cllr Hipkin expressed a concern that if planning was removed from area committees what would be being done would be “wounding rather than slaughter”; he was concerned if the residual role would justify the costs. He claimed that the biggest thing attracting people to the area committees was the planning and that the other items could not survive without them. Cllr Herbert clarified that he did support area committees, and felt they had a role dealing with things like policing, he also said the East Area committee regularly had a “sprightly audience”. Cllr Hipkin said area committees cost £247,000 and that removing planning would only save £40,000. Cllr Hipkin said that if you took out those on the public pay role and those present to observe or take part in the planning items then you had the same dozen people every time.
Cllr Blair decided to make her point on street cleaning after all; in fact she didn’t have a budget related point to make – what she appeared to want to do was talk about how she was a great ward councillor who had walked around her ward with officers and made changes to the schedule of street cleaning. She proudly reported that residential side streets in East Chesterton are to be getting cleaned less often, as more focus is placed on areas where cleaning is needed (presumably Chesterton High Street). She suggested that Cllr Herbert should just “walk round and make some decisions”. Cllr Herbert has the reverse problem of wanting more cleaning of residential side streets, and he presumably doesn’t have an “over-cleaned” area in his ward from which to draw resources; and Cllr Herbert was making a city wide recommendation (I imagine).
Cllr Howell came back briefly on the subject of area committees, building on the costs quoted by Cllr Hipkin to say that with 1100 people attending the costs of the area committees came out at £200 per member of the public, which he said is astonishingly high. He said officers and members often outnumbered members of the public, and those members of the public who did attend were he said generally “very empowered” already.
Cllr Cantrill defended the area committees, pointing to the Mill Road Tesco planning meeting where 150-180 people attended, something he said would not have happened if it had been a meeting held in the guildhall during the day. (A point surely proven wrong by the attendance at the public enquiry Cambridge News Video). He suggested planning items, often held at the end of meetings, introduced people to other business of the committee and said they sometimes get interested in the other items and return.
Cllr Pitt also spoke in support of area committees, saying that they were an example of local devolution, and that he said was something the Liberal Democrats were in favour of.
Cllr Taylor changed the subject to Taxicards, asking Cllr Herbert if he had any idea how many people would used the £8 voucher he was proposing. Cllr Herbert wasn’t able to give any numbers, but did argue that it would be of benefit to those living in all areas of the city, as on occasion those who rely on taxis have to make long journeys; it wasn’t just something that would benefit residents of wards out of the city centre.
Folk Festival Ticketing
Cllr Howell had added an item on the agenda requesting an update on the 2008 Folk Festival ticketing. He addressed his question to Cllr Smith, but the Chief Executive replied instead. He said that group leaders had been briefed earlier in the week on progress both on efforts to recover the money and on the council’s internal investigation and efforts to learn lessons and avoid a repeat. He said there was a separate briefing on the current year’s tender process (indicating perhaps the decision has been made not to run the ticket sales in-house). A notable omission was that he made no comment on the external review which has been promised, he did not say if anyone had been appointed to conduct that review or when it will report. The Chief Executive promised a paper would be taken to one of the March scrutiny meetings, but wanted them moved a few days to the middle of the month to give time to produce the report. I think expecting councillors to reschedule their meeting to give council staff three or four more days to work on a paper was an odd request; I am often surprised by how long it takes council officers to produce papers. If there is a reasonable explanation beyond merely “workload” the chief executive didn’t share it with the meeting.
Cllr Howell said that this was a serious issue, and it was important the council finds out what went wrong. In terms of timing he said that alarm bells ought to have been ringing much earlier and time might be of the essence, particularly with respect to attempts to recover the money.
Ian Nimmo-Smith said that he shares Cllr Howell’s concerns and agreed there needed to be an “understanding of what led to the current situation”. He cautioned Cllr Howell not to conflate the internal investigation with attempts to recover the money. Cllr Howell said the only way he had connected them was in saying time was of the essence in both cases. Cllr Nimmo-Smith said that there were a number of different processes going on in parallel in terms of efforts to recover the money. He also said that the design, letting and administration of the contract had to be looked at so appropriate lessons could be learnt.
Cllr Herbert had made a number of references in the meeting to the potential for the council to come into some “good luck”, there are a number of ways in which the council is budgeting for a worse case scenario than might unfold (and many unexpected new strains might appear too), perhaps one element of “good luck” he might have been considering would be the recovery of some of the ticket money from the Folk Festival online sales.
The last item was for the meeting to agree to Cllr Reid replacing Cllr Nimmo-Smith as the council’s representative on Cambridgeshire Horizons.