Wednesday, 17 December 2014

Statement on the cuts for 17 December Cabinet - Camden's cuts challenge post 10

Conservatives and the smaller state
The Coalition’s cuts to council budgets are a demonstration of their broader plans for public services. They want to roll back the state.  If it’s not recognisably the Road to Wigan Pier then it’s a journey towards a more American Republican model of smaller, limited government with greater use of charities in social policy. 

As Camden council enters its 50th year, this is in direct contrast to the approach taken by generations of Labour councillors here in this Chamber - and the wishes of residents, community groups and campaigners who want to see a council which places social justice at the heart of what it does.

I said 4 years ago that the cuts caused by the banking crisis would be borne by those who had nothing to do with it.  That is what happened and there’s more to come.  More families on low and modest incomes are poorer with less disposable income.  Those that can find work are stuck in a low wage trap.  More have had to move from the borough because of the Bedroom Tax, introduced by the Tories nationally and supported by them locally.  
Poverty is not just unfair but it’s also a waste and waste is inefficient.  Remember: the more people who suffer, the higher the demand for public services.  
The Camden Graph of Doom

Camden’s ‘graph of doom’ predicts future spending.  It estimates that if things don’t change Camden will have no money for anything other than street cleaning and recycling; adult social care and safeguarding children by 2021. 

Do you think that at the end of austerity the Conservatives will pledge to put more money back into libraries or youth centres?  No.  The Conservatives set out their stall when they promised tax cuts over public service funding.

So despite the national economic picture finally improving after the long slump caused by the banking crisis, over the next three years Camden Council faces its toughest financial challenge yet. The Council has already made £93 million in savings across the Council since 2011, while continuing to deliver quality services to local people, build new homes and get young people into work. Now, further cuts to government funding alongside other social pressures – including an ageing population and have left us with a budget gap of £70 million to find by 2017/18.

Funding cuts continue to disproportionately affect those councils with the greatest need. On the government’s own estimates, Camden faces the 8th largest spending power cut per dwelling in  2015/16 among all other local authorities nationally – and by 2017 Camden’s funding from central government will have been cut in half.

Camden Labour has tried to prioritise the money we have left for vulnerable people and what we know will help them best and help save money in the long run. We’ve focused on tackling inequality, preventing people getting in to trouble and being as efficient as we can. This means extra money in some areas like mental health prevention and domestic violence. But also means some very difficult cuts to services that we know people value.

As Labour councillors we are in a particularly difficult position implementing cuts to public services we never wanted to – but let’s be clear: the responsibility lies with George Osborne and the Tory/Lib Dem Coalition. One-term Tory austerity didn’t work because it started off by doing too much too fast, as we warned. Alistair Darling’s plan for spending restraint and investment was replaced by deep cuts in the measures in the emergency budget of 2010 and the first settlement which choked the recovery already underway.  It left no room for error, so when European economies started to suffer there was little scope to compensate.  They sole purpose of the Coalition was to deal with the deficit.  They have failed.

It's clear there is a need for public spending restraint so I also question those who only argue 'to turn the taps back on' without identifying where the money comes from.    

But while I appreciate the difficult situation they are in, I’m also critical of Labour’s front bench when it comes to local government spending.  Hilary Benn loses far too many arguments on spending around the Shadow Cabinet table to other departments: most recently over borrowing caps for council housing.  Too many senior figures take a blinkered approach to local government, and London local government in particular.

So it’s essential that we fight for a Labour government in 2015 which will protect the future of the welfare state and universal public services.  The financial formula which recognised the pressures of inner London should be restored.  Labour’s plan for decentralisation should cede Whitehall spending and powers to local authorities so we have more control over local public services and are able do more for the most vulnerable: after all, we know more about those with the most complex needs than Whitehall agencies do.

Our Plan
Here in Camden we can't sit passively by and let these cuts work themselves out.  In order balance the books decided to take a three year strategic approach to addressing the projected budget deficits. The three year strategy phases the changes so that we can make informed choices, like UNISON's Ethical Care Charter.

The Council’s experience is that reducing budgets by a set percentage across the board is not an effective way to meet these unprecedented cuts. Therefore the council has taken the opportunity to take a planned, longer term approach, looking in detail at all of the Council’s spending to consider how to provide services for less whilst still maintaining range and quality.

Our Four Investment Tests have guided our decision-making to ensure services still tackle inequality and money is spent on the things which have the greatest impact.

The new Outcomes-Based Budget approach has allowed the Council to free up some resources for reinvestment. Examples include enhanced focus on tackling domestic violence, reinvestment in childcare, and an innovative partnership fund in mental health.

We set out to make efficiency measures first.  Smaller support services and streamlined management structures are a major component of this, as well as the adopting of systems thinking.  Technology - through open IT and data analytics, will be a component in over 85% of our initiatives.

The Council is already considerably leaner than in the past. For example, the senior management pay bill has been reduced by over 20% since 2010. We will continue this by reducing further the number of management roles, reducing use of agency workers and consultants we don’t need, and reducing the cost of our support services, including finance, human resources, information technology and property.

Talking to residents
We haven’t made this plan without talking with and listening to residents.  We’ve gathered comments from over 2000 people just at this stage, in one of the largest listening exercises of its kind.

One of the strongest messages we received from residents was the importance of prioritising the money we have to protect our most vulnerable residents and avoiding the large scale privatisation neighbouring boroughs have embarked on.

Residents were also clear that they wanted to see greater value for money in outsourced repairs and street cleaning contracts negotiated by the Tory-Lib Dem administration before 2010.  While progress is being made here, I will announce further measures to ensure value for money in the New Year.

Job losses
It is estimated that the saving proposals agreed in September and those proposed in this report could result in a reduction of up 600 in our Full Time Equivalent staff posts. Any staff reductions required will be managed in line with the Council’s well-established procedures and be subject to an equalities impact assessment. Initial discussions have commenced with staff and trade unions about proposals for meeting the financial challenges ahead.

Measures are already in place to minimise potential redundancies such as holding vacancies and the use of redeployment where possible, but I pledge to monitor this issue an address UNISON’s concerns.

Use of reserves
We cannot agree with the proposal plug our funding gap by using reserves. Reserves are one-off balances and are allocated to specific projects or to mitigate corporate risks. These include funding for projects that will achieve ongoing savings such as our customer access programme, as well as towards fighting the negative impacts of HS2 on local residents.

Reserves can only be used once so they aren’t a sustainable way of plugging a permanent reduction in funding. They also take away from capital projects – to do so, for example, would means the end to the Parliament Hill renewal. 

In summary I thank council staff for their hard work in putting together the MTFS – we are not even halfway through a difficult journey which is transforming local government and how its serves local people.  So far it has proved resilient, just how far that will last if is now open to question after the end of this financial plan.