The Chairman of the Council, the Chairmen of Committees and Sub-Committees and Portfolio Holders to answer any questions on any matters in relation to which the Council has powers or duties or which affect the District of which due notice has been given in accordance with Council Procedure Rule No. 12.
Councillor Cresswell to Councillor Jenkins, Leader of the Council
As part of the ongoing discussions about the creation of a single council, will the Councils be required to make a full disclosure of their financial positions to one another including any planned spending or borrowing which is not currently in the public domain, such as confidential land acquisitions?
Answer Yes, absolutely.
Does that apply to every Councillor?
Answer Yes, absolutely.
Councillor Hinton to Councillor Jenkins, Leader of the Council
When in 2011 Babergh and Mid Suffolk Councils agreed to join together their work forces to optimise potential savings from reduced staff numbers and costs there was an expectation of considerable savings for both councils, they would remain separate Constitutional bodies, and these savings would be divided between the councils, helping to support overall finances in the light of reducing Government grants and potential cost pressures.
Question - Part one.
What were the TOTAL costs of staff for Babergh (Full time, part time, contract employees, consultants, everyone) at the start of the process and what was the equivalent cost at Mid Suffolk?
(This TOTAL to include expenditure from all potential “pots” of money which seem to appear at regular intervals.)
The total cost for Babergh in 2011/12 was £8,514k made up of £8,440k people on the payroll and £74k off-payroll costs. The equivalent cost for Mid Suffolk was £9,071k, comprising £8,969k on payroll and £102k off-payroll costs.
Question - Part two.
What are the TOTAL staff costs now for both sections of the councils (we are still separate corporate bodies) and what proportion is allocated to Babergh as its TOTAL wages bill? (Again this figure should be a TOTAL figure of ALL staff costs including contract workers, consultants, interims, pregnancy stand ins, and all other nebulous categories utilised in recent years figures.)
These initial questions are asked to identify the ability of the Councils to actually achieve savings from proposed projects as no assessment of their validity has been conducted.
The total cost for Babergh in 2016/17 was £9,754k made up of £8,525k people on the payroll and £1,229k off-payroll costs. The equivalent cost for Mid Suffolk was £11,158k comprising £9,965k on payroll and £1,193k off-payroll costs.
There are several reasons why the payroll costs have changed over this period of time. I have received a summary analysis from our Section 151 Officer, which I will send to you after the meeting. The Joint Overview and Scrutiny Committee meeting on 18th December will be receiving an update on the latest position in relation to off-payroll costs.
Additional point in relation to statement above
I would also like to remind you that the Joint Scrutiny Committee kept the integration costs and savings position under review, with reports being received by them in January and October 2013, so your statement is untrue that the project was not assessed and integration did in fact deliver over £2m per annum of savings between the two councils.
Within the lobbying for central government accounting, the Transformation Fund is regularly mentioned and utilised as a source for additional funds for regular spending and in the papers before the Council concerning the potential merger, it is quoted as figures in Mid Suffolk District Council and therefore they are more economically viable, my question is: What is the Transformation Fund? Where does it receive its income and how much is in there now and in Mid Suffolk’s account which Babergh Budget report shows limited information on page 3 lines 12 and 13?
Answer to be provided outside the meeting.
Councillor David Busby to Councillor Jennie Jenkins
If as you state, without a merger we are in dire financial straits, then haven’t you mis-managed this Council. How do you explain the turnaround in fortunes since the last merger referendum when we were “the Council with the healthy financial future?”
I would like to begin by thanking Councillor Busby for his question. The Council’s finances and how they have changed in recent years is an important part of determining what we are able to do for our residents and so it is vital that all our Councillors, but also the wider public, fully understand the Council’s changed financial position and how it is likely to continue to change for the future.
My only disappointment is that Councillor Busby has sought to make this a local political point when as he knows the Council was in no overall political control up until 2015 and only changed to a Cabinet model this year. Even more fundamentally, as he knows and as I will explain again, the change to our financial position has been driven by national changes that have affected all councils.
As we are all acutely aware, because it has been mentioned many times over the years in Council meetings, the Council has seen significant reductions in Revenue Support Grant (RSG) from the Government since 2011.
In the 2011/12 year the Council received £4.7m in RSG. This has reduced to just £0.5m this year and falls further to £0.2m next financial year, which is a reduction of £4.5m per annum by the end of the 7th year. By 2019/20 this Council will be in a negative RSG position and will be required to pay £0.13m back to Government.
To offset some of this reduction in local authority funding, the Government has offered different methods of more ‘incentivised’ funding. The main element of this since 2011/12 has been New Homes Bonus (NHB). The Council is receiving £1.2m of NHB in the current year.
There have however also been major changes made by Government to the NHB scheme since it was first launched. It has gone from a position where each new home provided 6 years of funding to the Council to become just 4 years; and a baseline level of growth has been introduced of 0.4% so that NHB is only paid where the increased number of houses in any given year exceeds this baseline. The combination of these factors means that next year the Council is likely to receive £400k less than this year, so £0.8m. Unless there are a significant number of housing completions next year and the scheme remains unaltered then this NHB level is anticipated to fall further, to just £0.6m the following year.
Taking these changes to RSG and NHB together, the Council will have seen an overall reduction in annual funding of £3.7m compared to 2011; against an annual net budget of approximately £10m.
As I have / will explain in response to Cllr Hinton’s question – since 2011, the staffing of the two councils has been amalgamated into one workforce. This has achieved significant annual savings of over £2m, mostly from management tiers.
We have also delivered other new ways of generating income. This includes installing photovoltaic panels on our council houses, investing our cash in different ways and establishing CIFCO to invest in commercial property.
All of this activity, along with driving out further efficiency savings, has meant that the Council has been able to absorb the impact of the RSG reduction and other cost pressures without significantly impacting on the delivery of our services to communities.
There remain however significant financial challenges for the future, as reflected in our Medium Term Financial Strategy. We therefore need to continue to be ambitious and innovative, identifying opportunities to provide even greater value for money in our services and raise additional income to reinvest in our services. To be blunt, if we don’t, we will have to make reductions in the quality and / or nature of services. Personally, I am not prepared to let that happen to our residents and communities.
I therefore believe that the Council’s finances have been very well managed since 2011. This has enabled us to absorb such significant reductions in funding without impacting on the vital services that we provide to our residents. We should therefore be thanking and praising each other and our officers for such an achievement; but we must not be complacent.
I thought you might use NHB as an excuse – a scheme largely out of our control – in the hands of developers. If we look at the difference between MSDC and BDC’s council tax last year of about £10 per household, had we moved towards equilibrium from 2011 then this would have generated about £350k per annum – eliminating our financial problems. I know that this is simplifying the position but don’t you agree that if we adopted a more financially future proofing plan of increasing council tax by 1.9%, instead of continually taking Central Government’s bribes to go with a zero increase, then we would have collected many hundreds of thousands of £’s which would negate the financial hole you have created?
Councillor McCraw to Councillor Jennie Jenkins
Recent meetings of both Cabinet and the Overview and Scrutiny Committee have involved discussion of the differences between Executive Functions and Decisions (those held by Cabinet) and Non-Executive Functions and Decisions (those reserved for the Council as a whole).
The Responsibilities of the Council, the non-Executive, are described in the Constitution, primarily at least, under Part Two: Sections 2.1 – 2.27.
Under Part Two: Sections 1.9 and 3.1 - 3.3 the definition of Executive or Cabinet functions and responsibilities is anything NOT covered by the Council’s decision making powers.
In other words, anything else.
The separation of powers lacks clarity in some of the definitions. Their current interpretation and their implications seem to be lacking. As this is not a time for continued confusion, can a Laymans Guide to these Powers, Functions and Decisions be prepared for the use of elected members, perhaps with examples from practice and the rationale behind them?
This would be an extremely useful resource for all of us. Could it also be done quickly? I suggest within a fortnight, or at least before our next full Council meeting.
Thank you Councillor McCraw for your question. It is essential that all Councillors fully understand the definitions of decision-making as set out in legislation and the governance arrangements laid out in our own constitution. There were workshops explaining the separation of Executive and council functions when we were preparing to adopt the leader-cabinet model and Councillors who attended these workshops were asked for the views on the local choice options for Council decision-making.
However, I welcome your very helpful suggestion about the production of a ‘laymans guide’ to provide further clarity around these definitions and I have asked the Monitoring Officer to begin working on such a document.
Part Two of the Constitution dealing with Responsibilities of Functions gives a list of the Responsibilities of the Council, that is the Non-Executive functions, those that Cabinet expressly does NOT have.
Part Two: Para 2.14 (On Page 37 of 208) lists as one of these ‘The exercise of functions relating to changing the name of the area’. There is no serious possibility of any merged authority retaining the name Babergh District Council. It wouldn’t be accurate, might be misleading and is unlikely to find favour at Mid Suffolk. Even if a name change exists only in potential, does it not follow that that ‘relates’ to a name change?
On that basis, according to our own constitution, doesn’t it follow that the exercise of all functions relating to any merger, exploration of merger or discussion of merger is a non-executive function reserved for the Council as a whole, and that each decision point involved is one for that body and that body alone?
If not, given its importance, why not?
Answer – I shall liaise with the Monitoring Officer and provide a response outside the meeting.