This week Camden council adopted its budget for the forthcoming year. Key announcements include:
- No more cuts unless the Government cuts more
- Council Tax freeze and scrapping of second homes relief for 4000 homes
- Extra efficiency savings invested in 16 new Police Officers in Camden Town area
- Pay ratio of highest to lowest paid worker in Camden Council now 10:1
- Community Investment capital Programme to build 850 extra council homes, regenerate estates and repair schools
- Fee freeze for all community festivals and summer fairs this year
Camden’s public services face three threats – reductions in on-going expenditure, cuts to capital investment and extra costs passed to the local taxpayer from changes to the law.
We face the most challenging political and economic context for decades. The government is making increasing demands of local authorities, absolving itself of responsibilities by cutting funding more than it needs to and at a pace which has forced the councils to pass on reductions to front line services. All the while, a second recession threatens to undermine the careful planning we seek to put in place in Camden.
While substantial service cuts were introduced last year, 2012 will see the intensification of the changes to local public and community services resulting from central government funding cuts. Yet despite this, early efficiency savings and long-term term planning has reduced Town Hall costs, developed new ways of saving community services and contributed to a freeze in council tax for households this year.
6 years of cuts
Camden faces at least six years of budget cuts, the longest and deepest in Camden’s history. In November the Office for Budget Responsibility announced a downgrading of its forecast economic growth over the medium term. This will negatively impact the Government’s deficit reduction plans and mean that there will be additional cuts beyond 2015. It also creates an additional risk that there may be further cuts in the current spending review period up to 2015.
Last year we set out the 3 year perspective and plan for Camden’s finances. Camden was one of the few councils to set out a long-term year plan in such detail. With long-term planning now in place, the Council is working hard now to minimise the impact of cuts on Camden from 2014 onwards.
Balanced budget secured to 2014
The 3 year budget Programme is progressing on target, with 47% of the £83.5m programme now delivered. Camden took a long-term approach to its financial challenges by constructing a three-year savings programme in 2011. This planned approach means that on current projections the Council will present balanced budgets in 2013/14 and 2014/15.
This means that, so long as we continue to deliver our planned programme, there will be no further public service cuts on top of those already announced until 2014 unless there are extra government cuts or new pressures from changes in the law arising from welfare reform, the Localism Act, the Health and Social Care Bill or other measures.
The government’s changes to the way councils are funded means we can’t be sure about the level of our future resources, but we are anticipating this will mean saving up to £10m a year in the five years following 2015. This represents as much of a financial challenge in the future as the current pressures we are facing.
Council tax freeze
In order to provide assistance to residents hit by the continuing problems in the national economy, Camden will freeze council tax again this year. The freeze has been achieved by successfully delivering planned savings ahead of schedule and careful financial planning. It means that the Council is able to use the ‘one-off’ council freeze grant from the government to invest in further schools repairs.
Pay and staffing
Since April 2010 staffing has been reduced by the equivalent of 473 full-time posts out of a projected 970 total job losses with 323 full-time employees having left Camden through redundancy.
Spend on external consultants is down 37% from a peak in 2009/10.
In view of the £83 million financial pressure on our budget, Cabinet asked officers to look at reducing the cost of senior officer pay. Following consultation with chief officers, it was decided that there would be a reduction in the total pay of Camden’s chief officers in 2011 compared to 2010.
For chief officers, salaries were frozen and variable pay reduced. This resulted in the overall chief officer pay bill for 2011 being less than for 2010, an overall reduction of 17%.
In addition, chief officer pay ranges for new appointments have been reduced by 10% and pay ranges for existing chief officers have been frozen since 2008. The Chief Executive’s salary has reduced by 20% from last year and councillors have also taken an allowance freeze for the second year running.
Following the new Chief Executive’s appointment the ratio of highest paid to lowest in the council was reduced to 10:1 when the public sector average is 15:1, well below suggested 20:1 by the Hutton report and private sector average (FTSE 100 company), 262:1.
Front line cuts and responses
The depth and speed of government cuts have meant that the council has been forced to reduce front line services, and 2012/13 will be the year when the effects of many of the difficult decisions made in previous years are felt.
The 3-year Budget programme had significant funding reductions planned for 2012/13 for the Council’s support for adult social care and to the voluntary and community sector. In response the Council has sought to promote community involvement and partnership working in each service in order to minimise the effects on service users.
As will be set out in the Camden Plan, the council will be taking further steps to save costs via internal workforce reform, online services and a focus on long-term cost savings to do our best that frontline services are not further affected from 2014 onwards. We hope to come to an agreement with unions over the London Living Wage for contracted workers shortly.
In every area we are looking at how we can deliver alternatives to cuts in difficult times. In consultation with the community, we have kept investment in services for the most vulnerable residents, although this has meant difficult decisions for those with lower needs, the impacts of which are being seen this year.
The ground-breaking Camden Education Commission is drawing on our entire family of Camden schools to address educational disadvantage and deliver a new Camden curriculum building young citizens ready for work in the Camden and London economy. Through early savings Camden will fund the Commission £2m for project works between schools. The success of schools working together in this way will open the possibility of funding in future years.
Further legislative risks and uncertainties
There is a great deal of uncertainty and risk in accurately projecting from 2013/14 due to the introduction of a number of extensive government programmes and the weak economic backdrop.
From 2013/14 the Resource Review will link the Council’s funding directly to the performance of the local economy, and it is not yet clear what the mechanisms to distribute funding between authorities will mean for Camden, or whether the government will use the Review to further reduce Council funding.
Camden has now set up an officer Welfare Reform Steering Group to look at the combined impact of welfare reform on residents across council services and to develop proposals/ communications for Members. The Department of Work and Pensions has estimated that around 1,000 claimants in Camden could be affected by the overall Benefit Cap – 800 will have their benefit reduced by up to £100pw and 200 will see reductions of more than £200pw.
Capital deficit and the Community Investment Programme
Public services face a massive challenge to meet the current capital deficit. Without action now, services will deteriorate and repairs bills will only get higher for the taxpayer. Through the Community Investment Programme we are reinvesting to address local need by the biggest council housing repairs and house and school building programme since the 1970s.
Camden’s Community Investment Programme will work with people in local areas to find ways to solve the borough’s capital problems. Over 60 projects are already being developed identifying sites for redevelopment or sale. For the first time in Camden’s history a full list of all assets the council owns has been published on the Camden website. The Council is calling for communities and other public sector organisations to get involved in investing and protecting what matters most to borough, through a 12 month series of local events.
One of the capital’s largest council housing programmes could see in the region of 850 new council and shared ownership family homes built in Camden. Through the redevelopment of sites, the council aims to secure 2201 new homes will include 1272 private and 867 social housing either council rents or shared ownership.
10,600 homes could receive Better Homes works including new kitchens and bathrooms as a result of funding generated from the programme. The number of homes improved is linked to the level of sales generated by the programme and the type of works commissioned.
The CIP will undertake major repair works to improve the condition of some of Camden’s 57 schools and children’s centres. I doubt there are many, if any, authorities with such an ambitious self-funded programme for schools.
Demand is high, and so are expectations from schools. We can’t achieve all the investment at once because spending has to be phased to enable us to work through a very challenging disposals programme. However, we think we’ve made a really good start using the money we have already been able to make available to the CIP. £4m has been allocated in 2011/12 to some of the most urgent projects in both primary and secondary schools with spending having started in summer 2011.
We plan to spend in the region of another £10m on schools in 2012/13 and we have written to all schools explaining to them where they are in the programme. We are working closely with Maria Fidelis to try to secure the best possible deal from HS2 for a rebuilt school.
By securing capital from regeneration and asset sales £117million will be invested in schools over the next five years including at least:
· £4.27 million for Acland Burghley school
· £3.75 million for Parliament Hill School
· £9.25 million for Hampstead school
· £2.75 million for St Dominic’s Primary
Further sustainability works are being undertaken and a full list of capital allocations will be published shortly.
Freeze on fees for community festivals
Finally, to ease the burden on local communities in the Olympic and Jubilee year (for monarchists and republicans alike) we have frozen all fees for community events and summer fairs to zero.