Southwark Council’s draft budget for 2017-18 reveals another punishing year of cuts ahead
The final budget will be produced on February 22
Southwark Council is crossing the Ts on its 2017-18 budget, with big cuts and shakeups expected in social care, children’s services and other vital services.
The borough is entering year-two of its plan to withstand £47m of government cuts over three years, first announced for 2016-17. This will be the eighth consecutive year of cuts since the Lib Dem/Conservative government, with over £100m lost since 2011.
At an Overview and Scrutiny Committee meeting on Monday, cabinet members fielded questions from Liberal Democrat and Labour councillors on what changes lay ahead for each department.
Cabinet member for finance, modernisation and performance, Fiona Colley, told the committee that this April’s budget would include savings of £25.6m.
As previously reported, council tax will rise for a second year.
Increases will partly be ring-fenced as part of the government enforced “social care levy” equalling a council tax rise of three per cent to tackle “growing” pressures of adult social care.
In a ‘foreword’ statement prepared for Monday’s meeting, Cllr Colley referred to “high-profile” media coverage of a “crisis in adult social care”.
Southwark will also end its seven-year freeze on voluntary tax rises by going for a 1.99 per cent tax rise. This brings the total 2017-18 tax rise to 4.99 per cent, creating £4.49m of revenue.
Cllr Colley said Southwark would become the seventh lowest-taxing council of London’s 32 boroughs. But speaking to the committee, she called the increases a “last resort”.
This will bring the total annual council tax revenue to £87.5m.
It was also revealed that Southwark had dipped into its reserves “throughout” the last several years, to avoid raising taxes, which Cllr Colley suggested could no longer be relied upon, and could “become a no-go area”.
National Insurance contributions have increased, costing £1.5m, and the council will pay higher staff salaries for the London Living Wage.
Revenue from business rates is also set for a shakeup in the years to come.
Southwark Council will keep 30 per cent of the growth in business-rate revenues generated by Southwark’s improving economy (the rest kept by central government).
But at the same time, increased business rates in April will see Southwark pay an extra £1.25m to the government for its own offices.
The government also plans to reform businesses rates so that councils keep 100 per cent of the revenue they collect, but this will be in exchange for other general government funding.
Meanwhile, The Mayor of London Sadiq Khan proposed another new tax that will be collected by councils, but used only to fund the Met Police, and will equal less than £1 per week for the average Southwark household.
The finished budget will be approved at full-council meeting on February 22.
Growing pressures on children’s services
Southwark’s cabinet member for children and schools, Victoria Mills, told Monday’s committee that there were growing pressures of demand on schools and children’s services.
Last year the council committed to a three-year freeze on its annual spend on the department, at £50m. But this year the department is forecast to overspend by £5.5m.
The borough will lose £2.6m from its Education Services Grant, which Cllr Mills said would be covered by funding from the Southwark Schools Forum and from schools’ own budgets.
Cllr Mills was also asked about pressures of retaining social workers.
An officer from the department told the committee that the average turnover of social work staff was after seven to eight years. “It’s a tough job,” the officer said, and added that staff faced “public vilification” and had been “attacked”.
“But we continue to attract staff who like what the council is doing,” Cllr Mills said, adding that case-loads in Southwark were sixteen per cent lower than in other London boroughs. The number of children in care increased from 475 as of April 1 2016, to 502 on January 1 this year.
Looking ahead, the government is currently consulting on a new national funding formula for schools that could be rolled out in the following year.
The News has previously reported that schools in two parliamentary constituencies in Southwark – Camberwell and Peckham, and Bermondsey and Old Southwark, look set to be the worst affected in the whole country, with over £1,000 lost per pupil.
Costs of adult social care
Care for the elderly and mentally and physically disabled is the most high-profile issue facing local councils, and Southwark is no exception.
Speaking at Monday’s committee, Southwark’s cabinet member for adult care and financial inclusion, Richard Livingstone, said many of the savings would come from passing responsibility for services onto the NHS.
For example, £900,000 could be saved from no longer providing equipment like wheelchairs and stair lifts. However Cllr Livingstone admitted that this has yet to be agreed with the NHS or other third-sector organisations.
Cllr Livingstone said: “Go to most other boroughs and it’s the voluntary sector. It’s not the local authority that provides them. In other boroughs they wouldn’t think of going to the council. It would be by the NHS or the third sector.”
Other savings could include:
- “Rationalising” its transport services for people in care, so that the council is only doing what the minimum statutory duty requires, saving £375,000 per year
- Personal budgets for social care will be reduced by ten per cent to save £410,000, with consultations with individual resident “to ensure that the impact… is mitigated appropriately”.
- £300,000 could be saved by renegotiating a dozen agency staff contracts that have run for more than ten years
Cllr Livingstone added that another unique pressure on Southwark Council was that it spent 18.9 per cent more than the average among London councils on residents with learning disabilities.
In addition to the tax increase to pay for social care, extra funding will come from a one-year-only £1.57m government grant, which councillor Fiona Colley called “woefully inadequate”.
Cllr Colley said a “substantial deficit” was still expected in its care services department, even after a £9.5m overspend for 2016-17, when Southwark ditched its target to find £12m of savings.
Added pressure will come from increased staff salaries from the London Living Wage and Southwark’s Ethical Care Charter: a pledge not to use zero-hours contracts.
Despite this, she said Southwark had maintained decent care services. The borough boasts having the second-lowest level of “delayed discharges from hospital” – when patients are held up in hospital if councils can’t find them accommodation after treatment.
*In the council’s housing department, more of the council’s temporary accommodation will be privately rented in areas around London, instead of relying on B&Bs, saving £500,000.
‘Gradual transition’ to online services
Councillor Fiona Colley discussed the council’s long term plans to “gradually transition” from face-to-face and telephone customer services.
She told councillors at Monday’s committee meeting that she decided against closing more call centres, because “we have a way to go” towards getting elderly and vulnerable residents confident with online services.
“We gave some thought to whether we would go more rapidly towards digitalising customer services. We’re not going to yet for the wholesale online. I suspect one day we will get that place,” Cllr Colley said.
“With online exclusion, we have to start seeing it in the same way we see financial exclusion – it has to be something that is tackled, not just allowed for.
“We need to be doing much more to tackle online exclusion. It’s my priority.”
She added that 5,000 courses will be run in Southwark’s libraries this year to help more people get online
The council also plans to close more of its ‘My Southwark Service Points’ in future. Closing the Bermondsey Service Point has saved £450,000.