The Council’s auditors step up the pressure – ‘medium-scale savings’ aren’t enough – ‘hard decisions’ for ‘transformational savings’ are required

One of the key instruments by which the Government exercises control over the Council’s Budget is the annual auditor’s report by Grant Thornton. Their Final Report for 2018/19, just published, spells out their powers.

These include powers to issue a public interest report, make statutory recommendations and to apply to the Court for a declaration that an item of account is contrary to law. The report makes a number of ‘statutory recommendations’, all of which make crystal clear that continuing with just ‘medium-scale’ cuts aren’t enough – the Council has to make what it calls ‘transformational savings’.

Despite the progress made, however, our view is that the Council faces some particular challenges which need to be tackled now. … Strong political leadership is required to implement the hard decisions required to deliver the transformational savings needed to protect financial resilience, and to mitigate the significant financial risks that the Council is facing.

They give a previous example of what they mean by ‘transformational savings’ – the privatisation of Early Years services: ‘a key element of the reorganisation plans involved the TUPE transfer of 140 Council staff to four partner organisations.’

They criticise the Financial Plan for 2019/20 to 2020/23 because it ‘includes mostly medium-scale savings plans but includes few ‘transformational’ savings plans. The ‘the absence of transformational plans within the current Financial Plan, will become more important in later years as it may become more difficult to achieve significant savings through less ambitious schemes.’

They say ‘The current financial plan includes a savings plan to reduce the costs of social care highcost provision by £6.25m in 2019/20, but this plan remains an exception.’ These savings presumably include the current Council campaign to make ‘transformational savings’ in the enablement care workers service.

The report goes on to warn of the cuts that the Council will have to make:

2019/20 and beyond …continues to look extremely challenging. The Council is seeking to strengthen its monitoring processes and embed accountability for delivery of savings more strongly within Directorates. The Council needs to deliver £86m in savings by 2022/23. To put this into context, this is equivalent to around 8% of its current  controllable budget (that is, excluding non-controllable costs such as delegated expenditure to schools). £36m of savings needs to be delivered in the next financial year, 2019/20, but £18m in savings, are still being consulted on. Savings to be consulted on in the following three years amount to £73m.

One of the Council services at risk of ‘transformational savings’ is the refuse collection service. In the next few months an independent review of the service is being carried out. The auditor’s report makes a formal recommendation about its terms of reference, which should ‘include an examination of all options for delivering the refuse collection service going forward … including… outsourcing’.

Finally, the report warns that the Commonwealth Games are already costing the Council around £220million and risk further costs: ‘there remains a risk that the Council might have to meet further liabilities if costs are not well controlled.’ As yet the Council has produced no detailed plans for how it intends to recoup this money.

 

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