All Select Committees

REPORT TITLE

Progress on General Fund Budget Strategy and 2011/12 to 2013/14 Savings Proposals

KEY DECISONS

Yes

Item No. 4

WARD

All

CONTIBUTORS

All Executive Directors

CLASS

Part 1

DATE

20 October – 3 November 2010

1. PURPOSE 1.1 The purpose of this report is to update Members on progress with the General Fund

budget strategy and to provide the opportunity to offer views on the draft revenue budget savings proposals for 2011/12 to 2013/14.

2. EXECUTIVE SUMMARY 2.1 In setting out the Council’s budget for the current year, the expectation that Local

Government finances would be significantly reduced in the future was forecast. The implications for Lewisham were estimated within a range of £50m–£60m over three years. Since this time, the Government has made unanticipated savings of some £6.25bn across public services, of which £1.17bn impacted directly on Local Government services. In Lewisham, this amounted to in-year savings of some £3.295m.

2.2 The longer term implications for Local Government finance continues to be a matter

of speculation, but recent announcements indicate that initial pessimistic estimates are most likely to be realistic. The Government’s Comprehensive Spending Review (CSR) will be reported on 20 October 2010. This will provide some more evidence on the likely impact on Council finances, although a definitive outcome for Lewisham will not be formalised until December 2010 when the Local Government Finance Settlement is expected to be announced.

2.3 The Mayor considered the ‘Financial Survey and Revenue Savings Options 2011/14’

on 14 July 2010. The Mayor instructed officers to develop and consult on options outlined in the report and to report back with proposals in November 2010.

2.4 Savings proposals will be presented to the Mayor on 17 November 2010, consistent

with the savings proposals outlined for some £16.494m over three years. This report also sets out a further £15m of indicative proposals on which the Mayor will be asked to note progress and where necessary, request officers to consult formally. Table 1 below sets out the total proposed savings to be considered for each year.

Table 1 – Total Proposed Revenue Budget Savings 2011/14

Phase 1 Phase 1

Total Phase 2

Total OverallTotal

Directorate 2011/12 2012/13 2013/14 2011/14 2011/14 £m £m £m £m £m £m Children & Young People 2.491 1.026 0.150 3.667 6.023 9.690Community Services 3.697 0.269 0.189 4.155 2.710 6.865Customer Services 1.643 0.409 0.202 2.254 2.361 4.615Regeneration 1.656 0.294 0 1.950 2.125 4.075Resources 2.469 1.665 0.334 4.468 1.844 6.312

Total

11.956

3.663

0.875

16.494

15.063

31.557

2.5 This report advises Scrutiny on the proposals to be made to the Mayor. This early report on the budget proposals provides an opportunity for Scrutiny to comment on the proposals outlined in advance of the Public Accounts Committee and 17 November Mayor & Cabinet.

3. RECOMMENDATIONS

It is recommended that:

3.1 Members of the respective Select Committees are invited to note and comment on the draft revenue budget savings proposals for 2011/12 to 2013/14, before the Mayor makes his decisions on 17 November 2010. Phase 1 proposals are summarised in Appendix 1 and set out in detail in Appendix 2.

3.2 Members note a further report will be made available to the Public Accounts Select

Committee on 9 November 2010, incorporating the views of the respective Select Committees.

3.3 Members note progress on the package of second phase proposals totalling £15m

and where necessary, asks officers to commence consultation and report back in February 2011. Summary attached at Appendix 3.

4. STRUCTURE OF THE REPORT

4.1 The Revenue Budget Savings Report 2011/14 is structured as follows:

Section 1 Purpose Section 2 Executive Summary Section 3 Recommendations Section 4 Structure of the Report Section 5 Policy Context

BUDGET SAVINGS PROPOSALS Section 6 The Ten Questions and Nine Guiding Principles Section 7 Background and Savings Proposals Section 8 Policy Analysis Section 9 Bridging the Gap and Themed Reviews Section 10 Scrutiny Process OTHER KEY BUDGET ISSUES

Section 11 Engagement and Dialogue with residents Section 12 Key Dates Timetable SUMMARY AND IMPLICATIONS

Section 13 Financial Implications Section 14 Legal Implications Section 15 Human Resources Implications Section 16 Equalities Implications Section 17 Environmental Implications Section 18 Crime and Disorder Implications Section 19 Background Papers

5. POLICY CONTEXT

5,1 The Council’s policy framework sets out the priorities that drive the medium term financial planning process and the allocation of resources. In identifying revenue savings proposals consideration has been given to the existing policy framework, in particular the Sustainable Community Strategy and the Council’s 10 Corporate Priorities and these are set out below:

Sustainable Community Strategy • Ambitious and achieving: where people are inspired and supported to fulfil

their potential.

• Safer: where people feel safe and live free from crime, antisocial behaviour and abuse.

• Empowered and responsible: where people are actively involved in their local area and contribute to supportive communities.

• Clean, green and liveable: where people live in high quality housing and can care for and enjoy their environment.

• Healthy, active and enjoyable: where people can actively participate in maintaining and improving their health and well-being.

• Dynamic and prosperous: where people are part of vibrant communities and town centres, well connected to London.

Corporate Priorities

• (A) Community Leadership and Empowerment: developing opportunities for the active participation and engagement of people in the life of the community.

• (B) Young people’s achievement and involvement: raising educational

attainment and improving facilities for young people through partnership working.

• (C) Clean, green and liveable: improving environmental management, the

cleanliness and care for roads and pavements, and promoting a sustainable environment.

• (D) Safety, security and a visible presence: partnership working with the policy and others to further reduce crime levels and using Council powers to combat antisocial behaviour.

• (E) Strengthening the local economy: gaining resources to regenerate key

localities, strengthen employment skills and promote public transport. • (F) Decent Homes for all: investment in social and affordable housing to

achieve the decent homes standard, tackle homelessness and supply key worker housing.

• (G) Protection of children: better safeguarding and joined up services for

children at risk. • (H) Caring for adults and older people: working with health services to

support older people and adults in need of care. • (I) Active, healthy citizens: leisure, sporting, learning and creative activities for

everyone. • (J) Inspiring efficiency, effectiveness and equity: ensuring efficiency and

equity in the delivery of excellent services to meet the needs of the community.

5.2 In taking forward the Council’s Budget Strategy, in engaging our residents, service users and employees, and in deciding on the future shape, scale and quality of services, we are driven by the Council’s four core values:

• We put service to the public first • We respect all people and all communities • We invest in employees • We are open, honest and fair in all we do

5.3 In early 2010, Sir Richard Leese, Leader of Manchester City Council and Sir Steve

Bullock, where requested by the then Secretary of State to consider a strategic approach to the public services response to the economic pressures which were very clearly on the horizon. The primary aim of this work was to provide a framework for the exploration of efficiencies and to mitigate against the worst impact on citizens. The output of this work provided a series of ten questions which all local authorities should consider in meeting the current challenge. Lewisham has used the questions to generate a local approach to explore efficiencies, cost reductions and savings.

6. THE TEN QUESTIONS & NINE GUIDING PRINCIPLES

Ten Questions

6.1 The following examples demonstrate how the ten questions which are referred to in Section 5 above, are influencing the Council’s on going approach to delivering budget savings.

6.2 Q1 – Are you taking a coordinated approach with partners, centred on the Customer, to transforming, sharing and reshaping services in the front and back office?

6.2.1 The Council has had a coordinated approach to Customer Transformation over the past three years based on the Customer Services Strategy. This has delivered

significant transformational change by examining services through the eyes of our customers and putting design at the heart of what we do to deliver effective and efficient local services tailored to customer needs. We have worked within the Council and with partners to deliver services innovatively, whilst releasing officer time, removing waste and improving the customer experience. This has contributed towards the delivery of £3.5m cash-releasing efficiency savings across the Council over the past 3 years. For example, in Housing Benefits we worked collaboratively with partners to redesign the assessment process to better support customers making a benefit claim and removed the burden of repeat contact to our offices to progress their application. Not only do customers’ experience a more efficient and robust service - the average time taken to process a benefit claim has dropped from 22 days to 8 days, but in addition we have released 7% efficiency savings from the budget with a further 9% planned over the next three years.

6.2.2 Within Adult Social Care, we consolidated four business support teams into a central advice and information service. This was to provide a consistent and effective first point of contact, called the SCAIT team. Working with our partners enabled us to understand the complexities of existing service delivery; identify ways to improve initial contact from a customer perspective with different needs, and build collective commitment across organisations to do things differently. SCAIT has provided clear and simple points of access for customers, that is understood by service users and providers, and is consistent and of high quality.

6.2.3 This approach to transforming, sharing and reshaping services in both the front and back office to both deliver savings and also focus on improving the service to customers and service users is a key part of the savings process for the next three years. There are about a £1 million of savings proposed across the Council which result from moving services into AccessPoint, CallPoint and the SCAIT team which have enabled savings in the back office. These are across Customer Services, Regeneration, Community Services and CYP.

6.2.4 Transformation reviews which have sought to streamline processes with a view to driving out inefficiencies, lower costs and improve the service to customers have resulted in savings proposals of over £1m in highways, revenues and benefits and planning.

6.3 Q2 – Are you engaging with all your partners, taking a ‘Total Place’ approach, to secure outcomes for the customer which maximises value for money?

6.3.1 A range of examples of such work exist. For instance, joint commissioning arrangements in both Children’s and Adults Services; community safety arrangements in partnership with the Police at a neighbourhood level/joint procurement of energy across London Councils, with proposals for reducing the council’s learning budgets as a result of an agreement with the London Boroughs of Greenwich, Bexley and Lambeth.

6.3.2 Lewisham has been one of thirteen national pilots for Total Place, an initiative which aims to develop new ways of delivering better outcomes at lower cost. The four themes on which the council has been working are, the management of offenders; worklessness & unemployment, health & social care and assets & energy. In each of these areas the council has been working with our public sector partners locally, our local community & voluntary sector, regional agencies and central government departments. These programmes are inevitably long-term but promise to reduce costs and improve outcomes through better designed and personalised services. A fuller precise of these areas of work is attached at Appendix 4.

6.4 Q3 – Are you improving processes, systems and practices whilst you transform and share resources to ensure that new services are efficient and designed for the customer throughout?

6.4.1 The council is undertaking work to streamline systems, processes and practices. This includes CONTROCC, streamlining income processes to carry out financial assessments and reassessments faster and inform clients of their likely contribution to their care as quickly as possible. We are changing the way invoices are raised so that they reflect more accurately the cost of services actually received. This example contributes £200k of savings to the budget strategy.

6.4.2 The Council will complete the transformation of its web site this year. As a result we will be able to transfer a significant number of transactions onto this channel which will result in a more efficient and cost effective service to customers and local people.

6.4.3 Delivering a cashless Council will make both efficiency savings and improve practice, providing for greater security in council transactions. Savings are outlined in this report of £150k.

6.5 Q4 – Do you have the data available to understand how your council is performing, and do you share and benchmark this information against others to identify areas for increased efficiency?

6.5.1 The Council’s Management Report sets out three distinct prisms through which the Council benchmarks its performance:

• compared to external benchmark • compared to current target and; • compared to the previous year

6.5.2 In conjunction with this approach to performance management our partnership with

London wide and national benchmarking fora has enabled us to deliver significant efficiency savings on an on-going basis in recent years. In the last three years over £26m of efficiency savings have been delivered.

6.5.3 Both the Management Report and the Council’s disciplined approach to data quality management have been held up by our regulator as models of best practice.

6.6 Q5 – Are you considering where you can collaborate with others on the procurement of technology, goods and service provision, and how you can achieve wider social objectives through innovative procurement?

6.6.1 In terms of ICT services we use OGC Buying Solutions facilities for a number of items. Their framework agreements are pre-tendered and fully EU-compliant, saving time and money in procurement. We buy our Desktop/laptop kit via "e-auctions" run by them whereby a number of Councils aggregate their spending power to get competitive prices for buying in "bulk". Our mobile phone contract is based on OGC or better pricing, saving us 50%on previous years, and we are moving away from BT for Broadband provision after running a mini tendering process via the OGC, which will reduce our costs by 50%.

6.6.2 Procurement of the replacement Social Service system was via a joint process with three other boroughs, and Lewisham's Libraries are about to join with the London Libraries consortium for a pan London replacement of the Libraries Management system.

6.6.3 Our Microsoft licensing model was developed in conjunction with the OGC (who used our negotiations as a benchmark) and once again the pricing is based on the aggregated buying power of a number of Authorities. The OGC deal was praised by the Treasury as contributing to "the Government's efficiency targets in support of its Operational Efficiency Programme, and clearly demonstrating the huge benefits that can be achieved through collaborative procurement".

6.6.4 We have recently completed a major joint procurement exercise with Bromley Council for the provision of our Outsourced ICT support Services contracts, using a shared specification and contract documentation and we expect this to generate saving in excess of 25% of the current budgets. It is expected that further joint procurement with Bromley will follow as the contracts develop. The contracts were also designed so that other Councils could potentially join at a later stage. This latter procurement will save the council significant sums included in this savings report.

6.6.5 We are currently working with the London Borough of Lambeth to explore joint arrangements for our financial systems.

6.7 Q6 – Are you considering how you can improve asset management when sharing services, and when considering organisational structures?

6.7.1 Over the last 12 months the Council has continued to strengthen it's asset management arrangements. Lewisham's public sector partners now meet every 6 months to jointly develop and deliver improvements to the borough's physical infrastructure. We are now examining the potential for the joint procurement of facilities management arrangements and shared services. Discussions have also taken place with the London Borough of Southwark on sharing information on the asset management implications of estate rationalisation proposals close to borough boundaries.

6.8 Q7 – Do you understand your workforce and how to get the best out of them?

6.8.1 Lewisham is ambitious for the community it serves, and committed to the continued development of the productivity and effectiveness of our workforce. All the indicators concerned with the overall representation of the workforce identify that Council performance has improved. Similarly, the Council reflects the ethnic origins of the community in its workforce with representation of BME staff at senior level increasing on a year on year basis.

6.8.2 The People Management Strategy focuses on the importance of having an effective, motivated and efficiently organised workforce to deliver this vision. The Council aims to be a “learning organisation” – creating a positive environment in which all staff can improve their approach to learning how they can best deliver value to the public. The Council has been continuously accredited by the Investors in People (IiP) standard since 1996. The IiP assessment process has been an integral part of our continuous workforce development for over a decade – enabling us to identify and implement good practice.

6.8.3 We have a well-motivated and skilled workforce that is clear about the priorities of the organisation and their role in achieving the organisation’s overall goals and in delivering specific service objectives. This is evidenced in our latest employee survey that demonstrated, among other things, that 90 per cent of staff have a comprehensive understanding of their service goals, 13 percentage points above public sector norms.

6.9 Q8 - Does your council have the leadership capacity and skills needed to develop innovative solutions and engage communities and frontline staff?

6.9.1 The Audit Commission has in its own inspection report identified the political and managerial leadership of the organisation as strong. The Council has also been recognised as having an outstanding approach to engaging with its community. The evidence presented in a recent inspection demonstrated the Council’s comprehensive approach to engaging with its residents and citizens across the borough. This resulted in the award of a green flag for excellence in community engagement.

6.9.2 Lewisham is at the leading edge of a range of high profile initiatives, including most recently, Total Place. This involved back office and front line staff looking at service from a customers perspective, across a range of public agencies and driving out efficiencies and better personalised service delivery.

6.10 Q9 – Are you considering whether you have the most efficient management layers and structures in place and can these be shared, integrated or aligned with those of partners?

6.10.1 ‘New Directions’, the Chief Executive’s paper on organisational structure and cost savings has outlined the approach to affecting cost reduction across senior management. It sets out a plan to increase managerial spans of control across the council and reduce senior management costs, by some £1.8m. The most obvious step will be to reduce the Council directorates from 5 to 4.

6.10.2 The total cost of services needs to be re-engineered so they can be secured at much lower cost. This will involve re-designing services from top to bottom as well as examining how work can be re-organised to lower cost. But it must also involve reducing the cost of management and the cost of overheads to service delivery (such as assets, plant, machinery, support service costs and so on). At the present time the overall cost of management in Lewisham is low relative to comparator Councils. However, this does not mean that management costs cannot be lowered further. It will be necessary to reduce the layers of management, increase managerial spans of control and re-group specialties across the Council to save money. What the Council needs to retain is a management structure that secures service delivery (through direct employment or service contracting), assures accountability to the Council and is innovative and flexible enough to continue to change and adapt services into the future. To this end the Council's management arrangements will be altered over the coming period so as to lower the overall cost of management.

6.11 Q10 – Are you considering how flexible your staff are and how specialist professional skill sets can be shared across your partner’s organisations?

6.11.1 A number of budget proposals contained in this report include delivering savings as a result of providing these jointly with partners, for example the proposals on reducing the council’s learning budgets has been produced as a result of an agreement with the London Boroughs of Greenwich, Bexley and Lambeth to deliver training jointly.

Nine Guiding Principles

6.12 Lewisham has developed an underpinning set of nine guiding principles, designed to assist in the process of bringing forward savings proposals and to aid decision making.

6.13 Outlined below are the nine guiding principles:

1) Consider the social impact of proposed changes 2) Avoid short-term fixes 3) Co-ordinate action across the whole Council 4) Encourage self-reliance, mutualism and cooperative endeavour 5) Prioritise support for those in greatest need 6) Not favour one locality over others 7) Involve service users, staff and other stakeholders in service redesign 8) Coordinate action with other public agencies and the voluntary sector, and

consider shared solutions 9) Listen to all voices, take account of all views and then we move forward to

implement.

6.14 The Council has committed to using the nine guiding principles when developing our

budget savings proposals. These principles ensure that savings proposals are considered and decisions made, in a fair, balanced and equitable way. They will continue to influence savings proposals being made.

6.15 Some further consideration

Agency, consultants and interim managers

6.15.1 The majority of the authority’s agency work comes through the managed service contract. Interims and agency workers are used, in the main, where we have difficulty in recruiting or retaining permanent staff. They are also used to cover short-term arrangement such as maternity cover, sickness and annual leave. The two main areas where we employ agency staff are adult social care and refuse and cleansing. We currently engage some 742 agency workers (August, 2010), a reduction from 911, or 20% in the previous year (August, 2009).

6.15.2 Consultants are used to cover short-medium term assignments providing specialist skills for which it would not be economic to maintain a full-time commitment. The use of consultants reflects the complexity of the Council’s Capital Programme, including Building Schools for the Future (BSF), Town Centre regeneration and other major regeneration programmes. There are other aspects of specialised development which require the input of specialist and technical expertise, that would not be cost effective for the Council to retain by any other means, such as for the WorkSmart project, the update of technological systems (Oracle, Website etc). A number of the Capital Projects are now well into the delivery stage and over the medium term it is expected to reduce our requirements for consultants.

Back Office v Front Office

6.15.3 A simple back office/front office split is not straight forward, particularly given some of the larger scale savings which are difficult to disaggregate. Inevitably some of these larger savings have a back office component. However, for simplicity the figures have been taken as front office where in doubt. Broadly, two thirds of the Phase 1 proposals are back office.

7. BACKGROUND AND SAVINGS PROPOSALS

Background

7.1 The Council’s revenue budget is made up of spending on general services such as waste collection, social services, libraries and leisure – called the General Fund budget, spending on education and schools - the Dedicated Schools grant (DSG), and spending on housing – the housing revenue account (HRA). The Council’s gross spend on all areas is some £1.1bn, and the Council receives income of some £830m giving a net spend on all services of £271m.

7.2 The Housing Revenue Account and the DSG are essentially ‘ring fenced’ accounts and are not being considered in this report.

7.3 The General Fund budget was set by Council in March of this year. The net general fund budget is £271.454m. This is also known as the budget requirement. The Council spends £695m gross and attracts income of £424m in relation to the General Fund. The Council’s net spend on arts, leisure and sport is £9.2m, on Early Years is £1.5m and refuse collection of £3.8m. The largest area of spend in General Fund terms is on Adult Social Care of £70m, where in net General Fund budget terms, the Council spends one in every four pounds.

7.4 Included with the General Fund, there is considerable core Council activity funded by grant. In 2010/11, grants received are in excess of £70m. This includes the Area Based Grant and a range of specific grants. There is much talk currently of a substantial number of these grants ending in the spending review proposals due to be announced in October 2010, as part of the Comprehensive Spending Review. This would add to the severe pressure on the Council’s finances.

7.5 While it would be true to say that some grant covers lower impact activity, many core Council services are funded from grant including: Supporting People, School Improvement, Sure Start Grant / Children’s Centres to name but a few. Furthermore much of the grant comes with statutory obligations e.g. Connexions, School Improvement Partners.

7.6 The Council has long sought to maximise its investment in front line services. Over the course of the last six years, the Council has secured and reinvested budget efficiency savings of some £52m. However, as is widely reported, it is anticipated that the Government will reduce mainstream funding available to Local Authorities by up to 25 per cent. The Chancellor’s Comprehensive Spending Review on 20 October 2010 is expected to provide the clearest indication yet, of the potential impact Government funding reductions will have on Local Government.

7.7 The Mayor, recognising the potential scale of the impact of the national deficit on the public sector, when setting the current years budget in March, requested that officers work up a strategy to deal with the forthcoming challenge.

7.8 Work commenced in earnest and a report on the ‘General Fund Budget Strategy and Process 2011/14’ was presented to Mayor and Cabinet in June. This outlined the reasons for the assumptions being made and the strategic approach being taken to identify proposals to meet the anticipated challenge of balancing the budget over the medium term.

7.9 This report was followed by a report in July setting out progress to date and identifying £30m of potential proposals over a 3 year period against an estimated requirement of £60m. The Mayor at this stage instructed officers to develop and

consult on phase 1 options for reporting back in November with proposals to be considered, and to continue to work on phase 2 proposals, which it was recognised would take longer to develop. Progress on these phase 2 proposals will be noted in November with the intention for them to be ready for decision making in February.

7.10 This potentially leaves a significant gap over the 3 year period of a further £30m of options to be identified, if our assumptions are realised.

The Savings proposals

7.11 Budget savings proposals have been examined in the context of our priorities and strategies, with due regard to the nine guiding principles, as set out in Sections 5 and 6.

7.12 In the coming years, the Council will continue to be faced with a changing policy and financial landscape and the budget strategy will need to be reviewed and updated on an ongoing basis to ensure it will meet the emerging requirements. The Comprehensive Spending Review is due to be announced on 20th October and an update on the CSR and its implications for Local Government and Lewisham will be available for the Public Accounts Committee and Mayor & Cabinet meetings on 9 and 17 of November, respectively.

7.13 The Council is estimating an overall reduction in it’s net revenue budget of some 25 per cent. The Council’s savings target of £60m over 3 years, including £20m in 2011/12 was previously agreed by Mayor & Cabinet. The scale of this challenge is unprecedented in recent years and represents more than double the level of revenue savings the Council has been faced with over the past three years.

7.14 The aim of the Council throughout the administration will be to try to sustain positive social results and progressive service outcomes locally through smarter management and productive ways of working and reducing the costs of overheads. However, the scale of the problem is such that it has not been entirely feasible for officers to put forward budget savings proposals that do not have some impact on front line services.

7.15 Changes to our budget of this scale are not simple changes of degree. In some cases for some functions and some activities, it may not be possible to lower the cost of services by one-quarter, without changing the nature of the service or making it non-viable. Reductions of spending at this level may lead to changes in kind – such as service redundancy, merger and alternative rationalisation. This is why we fundamentally need to re-examine all the costs involved in our services and examine every feasible option for lowering costs involved in our services, while sustaining, if not improving, as far as is practicable, existing service standards and levels.

7.16 The Mayor instructed officers to progress the consultation on a package of proposals for 2011/12 to 2013/14 totalling £21.611m. Inevitably, whilst going through the process of firming up the detail of the proposals with greater clarity, some proposals have been re-profiled between the phases. The total has been revised and the proposals contained in this report now seek approval of £16.494m for 2011/14, which includes some £12m for 2011/12. Agreement to implement these savings is being sought for November 2010. Table 2 provides a summary of the first phase proposals for 2011/12 to 2013/14. A summary for each of these proposals is attached at Appendix 1, with the detail for each savings proposal attached at Appendix 2.

Table 2 – Phase 1 Savings Proposals by Directorate for consideration in November 2010

Directorate 2011/12

£m2012/13

£m2013/14

£m3 Year

Total £m

Children & Young People 2.491 1.026 0.150 3.667 Community Services 3.697 0.269 0.189 4.155 Customer Services 1.643 0.409 0.202 2.254 Regeneration 1.656 0.294 0 1.950 Resources 2.469 1.665 0.334 4.468

Total

11.956

3.663

0.875

16.494

8. POLICY ANALYSIS

8.1 The following section provides an analysis of the Phase 1 savings proposals for 2011/14 in the context of the Council’s policy framework.

Policy framework

8.2 This policy analysis describes how savings, proposed by directorates, will impact on

the delivery of the Council’s ten key priorities which are listed below. Any proposed budgetary savings have to be considered in the light of these priorities and the potential effect on services provided and outcomes for both service users and the community at large. The effects are assessed as either positive, neutral or negative, in terms of real impacts on the Council’s functions and services.

1. Community Leadership and Empowerment: developing opportunities for the

active participation and engagement of people in the life of the community. 2. Young people’s achievement and involvement: raising educational

attainment and improving facilities for young people through partnership working.

3. Clean, green and liveable: improving environmental management, the cleanliness and care for roads and pavements, and promoting a sustainable environment.

4. Safety, security and a visible presence: partnership working with the police and others to further reduce crime levels and using Council powers to combat anti-social behaviour.

5. Strengthening the local economy: gaining resources to regenerate key localities, strengthen employment skills and promote public transport.

6. Decent Homes for all: investment in social and affordable housing to achieve the decent homes standard, tackle homelessness and supply key worker housing.

7. Protection of children: better safeguarding and joined up services for children at risk.

8. Caring for adults and older people: working with health services to support older people and adults in need of care.

9. Active, healthy citizens: leisure, sporting, learning and creative activities for everyone.

10. Inspiring efficiency, effectiveness and equity: ensuring efficiency and equity

in the delivery of excellent services to meet the needs of the community.

Presentation of analysis

8.3 The following analysis has been prepared, using various key headings. These offer a wide-ranging perspective of the impact of budget savings for phase 1 of the 2011/14 savings round.

Savings mapped to Council priority

8.4 Figure 1 and Table 3 below illustrates that of the £16.494m worth of savings

identified, £10.689m or 64.8% are linked to Council priority (J) ‘Inspiring efficiency, effectiveness and equity’. The next highest saving £1.283m or 7.8% of the total, has been proposed under priority (I) ‘Active, healthy citizens’. Of the other Council priorities, priority (H) ‘Caring for adults and older people’ and priority (D) ‘Safety, security and a visible presence account for £1.270m or 7.7% and 1.061m or 6.4% of savings respectively.

8.5 Lower amounts are attributable to priority (C) ‘Clean, green and liveable’ £749k or

4.5%, priority (E) ‘Strengthening the local economy’ £528k or 3.2%, (B) ‘Young people’s achievement and involvement’ £394k or 2.4%, (A) ‘Community leadership and empowerment’ 223k or 1.4%, (F) ‘Decent homes for all’ £184k or 1.1% and (G) ‘Protection of children’ 113k or 0.7%.

Figure 1: % of savings proposal mapped to primary corporate priority

Table 3: Proposed savings mapped to Primary Corporate Priorities Primary Council Priority A-J COM CUS CYP REG RES

Grand Total '000s

%age of savings

A. Community leadership & empowerment 126 97 223 1.4%B. Young peoples achievement & involvement 394 394 2.4%

0%

10%

20%

30%

40%

50%

60%

70%

% of total proposed savings (£16.494m)

C. Clean, green & liveable 599 50 100 749 4.5%D. Safety, security and a visible presence 1,048 13 1,061 6.4%E. Strengthening the local economy 528 528 3.2%F. Decent homes for all 184 184 1.1%G. Protection of children 113 113 0.7%H. Caring for adults & older people 1,070 200 1,270 7.7%I. Active, healthy citizens 1,283 1,283 7.8%J. Inspiring efficiency, effectiveness & equity 628 1458 3,160 1,372 4,071 10,689 64.8%Grand Total 4,155 2,254 3,667 1,950 4,468 16,494 100%

Impact on Council priorities

8.6 The diagram below shows how Directorate Management Teams judge the likely

impact of savings proposals upon the delivery of the Council’s priorities. These impacts have been identified as positive, neutral or negative. Of those savings proposed, a combined total of £12.704m or 77% are considered to have an impact that is either ‘neutral’ 45.2% or ‘positive’ 31.8%. A further 23% of savings are described as likely to have a ‘negative’ impact on the delivery of Council priorities.

Figure 2: Impact of savings proposals

23.0%

45.2%

31.8%

Figure 3: Impact of savings proposals on corporate priorities

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Priority

A

Priority

B

Priority

C

Priority

D

Priority

E

Priority

F

Priority

G

Priority

H

Priority

I

Priority

J

PositiveNegativeNeutral

% of total proposed savings 16,494m)

8.7 The chart above demonstrates the positive, neutral or negative effects of savings

proposals on each corporate priority. There is a significant neutral and positive impact on priority (J) ‘Inspiring efficiency, effectiveness and equity’. The highest negative impact is on priority (D) ‘Safety, security and a visible presence’.

Risk to achievement

8.8 All savings proposals that have been put forward are achievable, however, a risk

rating has been given to each proposal which assesses the level of challenge to delivery.

8.9 The tables below offer a directorate perspective as to the relative achievability of

savings proposed in the 2011-12 round. The sliding scale used indicates that 3 and 4 are the most likely to be achieved without difficulty, whilst 1 and 2 savings are those likely to be achieved, but with potential challenges to delivery during the course of implementation.

8.10 Tables 4a and 4b above show the risk to achievability for savings proposed. The

tables suggest that £13.305m, 80.7% (3 and 4) are perceived as having a comparatively low level of risk and are therefore more easily deliverable.

8.11 In contrast 19.3% or £3.189m (1 and 2) of savings are perceived by directorates as being more difficult to achieve.

Table 4a Risk to Achievement

Level of risk Total £ % of savings

1 280k 2 2.909m

High risk savings sub total 3.189m 19.3%

Table 4b Risk to Achievement

Level of risk Total £ % of savings

3 7.147m 4 6.158m

Low risk savings sub total 13.305m 80.7%

Geographical analysis.

8.12 The analysis in the table below shows how directorates have judged the likely geographical impact of savings proposals. The table shows that of the £16.494m savings total, £16.487m (99.96%) will impact borough-wide and not affect any specific ward.

8.13 Amongst the proposals are those for the closure of 5 libraries (Sydenham,

Blackheath, Crofton Park, Grove Park and New Cross) it is recognised that whilst these are located in specific wards the impact of the proposed closures will be felt borough wide.

8.14 Amongst the other proposals identified as impacting borough-wide two (the warden’s

services and economic development service), are known to be active in particular wards. For the wardens service these areas are Deptford, New Cross, Honor Oak, Bellingham and Downham. For the economic development service these areas are Deptford, Lewisham, Catford, Sydenham, Forest Hill, Lee Green and Brockley.

8.15 The only savings proposal that has been identified as having a specific and direct

impact on any one ward is the cancellation of a pilot project designed to work with primary school children and their families to raise aspirations in areas of intergenerational unemployment; the pilot was scheduled to start in April 2011. This savings proposal affects Bellingham and amounts to £7k or 0.04% of the savings total.

Coverage Value £‘000 PercentageBorough-wide 16,487 99.96%Bellingham 7 0.04%Total 16,494 100%

8.16 The table below also shows the type of impact the savings proposals are likely to

have on a geographical basis. The table shows that savings totalling £12.704m or 77.02% are judged to have a likely positive or neutral impact, whilst savings totalling £3.79m or 22.97% are judged to have a likely negative impact.

Type Value £‘000 PercentagePositive or neutral 12,704 77.02%Negative 3,790 22.97%Total 16,494 100%

9 BRIDGING THE GAP & THEMED REVIEWS 9.1 If the Phase 1 proposals are agreed in their entirety, then this would take us some

way towards balancing the budget for 2011/12 and provide a start for the next 2 years. However, we would still have a substantial way to go to achieve the target of £60m over the 3 year period.

9.2 Savings proposals for Phase 2 are still being progressed. These proposals were first

outlined in the 14 July 2010 report and a summary of the indicative savings are attached at Appendix 3. The proposals would provide a further £15m towards the Council achieving its target of £60m. Work needs to progress and consultation exercises need to be finalised in order that decisions can be taken in February 2011.

9.3 It is worth noting, that already since July, there have been changes to the timing and

quantum of the proposals as further work has taken place and officers have become clearer about the scale, feasibility, timing and deliverability of these options. Some proposals have delivered more savings than originally envisaged whilst others have slipped or are now expected to deliver less savings.

9.4 On the whole, the overall quantum is in line with that reported in July 2010.

However, there is likely to be some proposals for which a full year impact will not be possible and these will need to be re-profiled.

Themed Reviews

9.5 The strategy being pursued is to take a longer term view of the budget, recognising

that the scale of the challenge will not simply be met by ‘salami slicing’. Some of these proposals are already coming forward in Phase 1 and Phase 2 proposals, for example Economic Development, Early Years and Wardens. Inevitably, with the timescales involved in delivering transformation, the expectation should be that they will start to deliver in 2012/13 and 2013/14.

9.6 The 6 themed reviews are:

• Fleet, transport and vehicles – A review to consider a range of options for

delivering economies of scale; economies of scope and improved efficiency. Expenditure on this service is £5.8m per annum.

• Income from fees and charges – Lewisham has been identified as 25th on the

income scale across London (£29m per annum). This leaves considerable scope for further evaluation the income that could be generated from fees and charges.

• Removing cash from the Council – The objective of this review is to establish the

scope of migrating cash payers to alternative channels (i.e. debit card payments) or where this is not possible, to allow cash payments at PayPoint or Post Offices. The savings already identified amount to £150k.

• One Front Door – Extending Call Point / Service Point approach –A wide range

of services could benefit from being brought together through a single access point. It is anticipated that savings in this area can be made from a diverse range of services.

• Learning and Development – Joint procurement of training with other boroughs is

leading to the generation of new efficiencies. A recent contract was let in

partnership with Greenwich Council which has already delivered efficiencies. There is the potential for further savings to be realised as other Councils and partner agencies join in with the Greenwich-Lewisham partnership.

• Waste Collection and Disposal Strategy – A strategy is being developed to look

at options for improving waste management.

9.7 As can be seen, some reviews are already included in Phases 1 and 2. However, a substantial number of reviews are still in progress, to the stage of firming up estimated savings. In total, these are expected to deliver further savings.

9.8 In addition to the above reviews, the Chief Executive is to lead a review of the

Council’s overall management arrangements. This is to be phased over the coming 3 years and will look to reduce the number of Council directorates, increase managerial spans of control across the Council and reduce overall senior management costs. This could reduce management costs by some £1.8m.

9.9 There is a clear expectation of a substantial contribution from these areas which are

currently under review. it is not possible to on precise on the scale of the savings at this point.

9.10 There still remains a significant number of unknowns affecting our overall drive to

identify £60m of proposals, not least the impact of the CSR, which may not be fully evaluated until as late as December 2010. However, there must remain a priority for securing now significant savings in year one to balance the 2011/12 budget, with the expectation of further savings to follow in phase 2 and across the themed reviews. However, this does not preclude us from difficult decisions that still remain impacting in years 2 and 3 for closing any remaining gap on our budget strategy. There are a variety of options for proceeding and with greater clarity in the new year, when a formal report will be presented in February covering phase 2 and providing the opportunity for a more definitive statement on any gap outstanding.

10 SCRUTINY PROCESS 10.1 All Select Committees will have an opportunity to consider the budget savings

proposals for 2011/12 to 2013/14. It is important to note, that the results from the various consultation exercises will not be fully available for these meetings, as some remain ongoing. However, they will be available for the Public Accounts Select Committee and the Mayor & Cabinet meetings.

10.2 The Select Committees will consider the budget savings proposals on the following

dates:

• Children & Young People Select – 20 October 2010 • Safer & Stronger Select – 21 October 2010 • Sustainable Development Select – 27 October 2010 • Housing Select – 1 November 2010 • Healthier Communities Select – 3 November 2010

10.3 The Public Accounts Select Committee will be considering this report at its meeting on 9 November 2010.

10.4 Any comments from these meetings will be reported back to the Mayor & Cabinet on

17 November 2010.

11 ENGAGEMENT AND DIALOGUE WITH RESIDENTS 11.1 The ‘Our Lewisham, Our Say’ programme of citizen engagement and dialogue has

been designed to explain the situation the Council will face in the coming years, to listen to citizen’s ideas on how best to tackle it, and to initiate a dialogue between residents on those ideas. It is broad in scope and in reach, presenting choices across a wide range of activities to as many residents as possible. It is not specific to one service or one option, focussing instead on the sorts of options the Council might need to consider across the breadth of its activity as it faces its financial challenge.

11.2 The consultation takes a diverse approach, in which an online survey guides residents through pre-selected options in relation to eleven of the Council’s services, while local assemblies and an online forum provide the opportunity to discuss the issues more broadly. In all elements residents are able to record their preferences for certain options, in certain situations, given the information to hand. They are also able to make other suggestions and to note ideas about what the Council might do differently.

11.3 This consultation, however, is not designed to provide a definitive picture of the views of Lewisham residents. It is not a formal poll or referendum. Instead it will provide pointers to the sorts of solutions that residents tend to prefer, given the situation the Council faces. The programme commenced on 15 July 2010 and to date more than 1,800 residents have participated. The programme will run until shortly after the final local assembly has had an opportunity to discuss the issues involved, on 25 October 2010. The results will be presented as part of the Mayor & Cabinet report on the budget savings on 17 November 2010.

11.4 Consultation on Service Specific Proposals range from the Wardens Service, the Economic Development service and the libraries services. These are alongside other service reviews of a significant scale and order. It is planned that more detailed information on the outcome of these consultations will be available to the Public Accounts Committee and Mayor & Cabinet. It is inevitable given the commitment the Council has made to public consultation and engagement that these reports will take time to fully evaluate. However, it is the intention of officers to ensure that the savings proposed in some of these key areas, for instance, libraries and economic development and wardens are reported at an even greater level of detail for PAC and M&C than has been possible in this initial draft.

11.5 There are a number of petitions that were received at the Council meeting on 23

September 2010 relating to the following libraries: Sydenham, Blackheath, Crofton Park, Grove Park, New Cross.

11.6 The response to these petitions will be dealt with as part of the overall savings to be

presented to the Public Accounts Select Committee and Mayor and Cabinet on the 9

and 17 November respectively.

12 KEY DATES BUDGET TIMETABLE 12.1 The key remaining dates of the budget timetable are as follows:

October 2010 EMT/Mayor’s Briefing considers draft Savings

Proposals and Service Reviews

20 October – 3 November 2010

Select Committees consider the Budget Savings Report

9 November 2010 Public Accounts Select Committee

17 November 2010 Mayor & Cabinet agrees first phase savings

proposals authorises the development of and consultation upon further options.

24/29 November 2010

Full Council – Subject to confirmation

November 2010/ January 2011

Provisional / Final Local Government Settlement

2 February 2011 Public Accounts Committee considers further budget savings proposals and 2011/12 Budget and Council Tax report

9 February 2011 Mayor & Cabinet agrees further budget savings proposals and assesses the need for any additional savings; recommends 2011/12 Budget and Council Tax to Council

1 March 2011 Council agrees 2011/12 Budget and Council Tax

7 March 2011 Reserve Council date

13 FINANCIAL IMPLICATIONS 13.1 The entire report deals with progress on the Council general budget strategy and

savings proposals for 2011/14.

14 LEGAL IMPLICATIONS

A balanced budget

14.1 The Council is under a duty to set a balanced budget each year and must not knowingly budget for a deficit. The revenue proposals set out in this report identify reductions that would go some way to meet this requirement in 2011/12.

14.2 Each savings proposal has been considered in detail in this report and the legal

implications, where appropriate, have been set out against each of the individual proposals.

Constitutional issues

14.3 The Local Government Act 2000 and regulations made under it and statutory

guidance relating to it, provide that it is the responsibility of the full Council to set the Council’s budget. Once the budget has been set, it is for the Mayor to make decisions in accordance with the statutory policy framework and that are not wholly inconsistent with the budget. It is for the Mayor to have overall responsibility for preparing the draft budget for submission to the Council to consider.

14.4 For these purposes the term “budget” means the “budget requirement (as provided

for in the Local Government Finance Act 1992) all the components of the budgetary allocations to different services and projects, proposed taxation levels, contingency

funds (reserves and balances) and any plan or strategy for the control of the local authority’s borrowing or capital expenditure.” (Chapter 2 statutory guidance).

14.5 Authorities are advised by the statutory guidance to adopt an inclusive approach to

preparing the draft budget – to ensure that councillors in general have the opportunity to be involved in the process. However, it is clear that it is for the Mayor to take the lead in that process and that proposals to be considered should come from that quarter. The proposals in this paper for reductions in 2011/12 will be effective if they are reflected in the budget to be fixed by Council in due course. The report sets out the actions taken by the Council to comply with the statutory guidance to include non-executive members in the budget setting process.

Statutory duties and powers

14.6 The Council has a variety of statutory duties which it must fulfil by law. It cannot

lawfully decide not to carry out those duties. Even where the Council is under a statutory duty to provide a service there is often a discretion available to the Council about the level of service provision. Where there is an impact on statutory duty this has been identified in relation to the particular proposals. For other activities, the Council provides services in pursuance of a statutory power rather than a duty, and though not bound to carry out those activities, decisions about them must be taken in accordance with the decision making requirements of administrative law.

Reasonableness and proper process

14.7 Decisions must be made reasonably, taking into account all relevant considerations

and disregarding irrelevancies. These are particular to the service reduction proposed and are set out in the body of the report. It is also imperative that decisions are taken following proper process. Depending on the particular service affected, this may be set down in statute, though not all legal requirements are set down in legislation. For example, again depending on the nature of the service, there may be a requirement to consult before making a decision. Members will see from the body of the report, that consultation with service users, staff and others has taken place in relation to budget reductions as appropriate. The outcome is detailed in the report. Members must consider the responses to that consultation process and consider it with an open mind before coming to any decision.

Staff consultation

14.8 Where proposals, if accepted, would result in more than 100 redundancies within a

90 day period, as appears possible if all proposals under consideration are approved, an employer is required by Section 188 Trade Union and Labour Relations (Consolidation) Act 1992 to consult with the representatives of those who may be affected by the proposals. The consultation period is at least 90 days. This consultation is in addition to consultation with individuals affected by redundancy and/or reorganisation under the Council’s own employment procedures.

14.9 Consultation with the Trade Unions has been undertaken in accordance with

statutory requirements and where these processes have been completed the responses are reflected in the body of the report as are the responses of staff members.

14.10 In relation to a number of proposals, because of the impact of the savings, the

consultation process is not yet complete, and in these cases the Mayor will receive a further report following the closure of the consultation process.

Equalities legislation

14.11 The Sex Discrimination Act 1975 (SDA), the Race Relations Act 1976 (RRA) and the Disability Discrimination Act 1998 (DDA) all contain provisions whose aim is the progressive elimination of discrimination in the public sphere. This is done by requiring public bodies including local authorities to have regard to the need to eliminate discrimination. This is often referred to as the “general duty.” The Act also contain provisions allowing the Secretary of State to make orders or regulations imposing specific duties for the purpose of ensuring the better performance of the general duty.

14.12 By Section 76A of the SDA a local authority in carrying out its functions must have

due regard to the need to:

(a) eliminate unlawful discrimination and harassment; and (b) to promote equality of opportunity between men and women

14.13 Statutory order has been made under Section 76B requiring local authorities to

publish a gender equality scheme, requiring implementation within 3 years and review every 3 years at least with regular reports on the achievement of the aims of the scheme.

14.14 The statutory Code of Practice issued by the then Equal Opportunities Commission

“Gender Equality Duty Code of Practice for England & Wales” highlights that the regard for these duties must be “due” with proportionality and relevance being key principles. It acknowledges that authorities may not always be able to adopt actions that would best promote equality but that they must ensure that in making decisions due regard is had to the duties under the Act. The statutory guidance points out that Equality implications Assessments are a tool to assess the impact of policies and that where full E.I.As are conducted they should be evidence based with an assessment of the likely impact and should consider possible actions to mitigate any adverse impact.

14.15 By Section 71 RRA requires local authorities in carrying out their functions to have

due regard to the need:

(a) to eliminate unlawful racial discrimination; and (b) to promote equality of opportunity and good relations between persons of

different racial groups.

14.16 Again, the Secretary of State has imposed specific duties by statutory order with requirements such as the publication of a race equality scheme, and periodic review of the functions relevant to the scheme, monitoring and review.

14.17 The statutory Code of Practice issued by the then Commission for Racial Equality

also points to the need for the regard to the duty to be due – being proportionate according to the relevance of the duty to the service in question. It is also clear that due regard must be had to the duty in the core functions of policy development, service design and delivery, decision making, employment and, among other things in the exercise of statutory discretion.

14.18 The general duty in relation to disability is set out in Section 49A of the DDA. Under

this every public authority must, in carrying out its functions, have regard to –

(a) the need to eliminate discrimination that is unlawful under the Act

(b) the need to eliminate harassment of disabled people that is related to their disabilities;

(c) the need to promote equality of opportunity between disabled persons and other persons;

(d) the need to take steps to take account of disabled persons’ disabilities, even where that involves treating disabled persons more favourably than other persons;

(e) the need to promote positive attitudes towards disabled persons; and (f) the need to encourage participation by disabled persons in public life.

14.19 The Secretary of State has made regulations which impose on local authorities the

duty to publish a disability equality scheme, review and implementation with reporting requirements.

14.20 The statutory Code of Practice issued by the then Disability Rights Commission “The

Duty to Promote Disability Equality ; Statutory Code of Practice” reflects the emphasis in the other statutory codes on proportionality and relevance, and the need for evidence based EIAs where they are appropriate using data and research. It emphasises the important role of consultation and the involvement of stakeholders, as well as the need to mitigate adverse impact where possible.

14.21 The Courts view all three of these duties as very important and rely on the statutory

code of practices. and it is necessary for members to have regard to these duties and codes before any decision is made, paying attention to the substance of the analysis contained in the equalities impact assessments contained in this report before any decision is made.

14.22 The Council’s own Equality Scheme and its toolkit for conducting equalities impact

assessments reflect the statutory codes of practice and guidance and provide for the Council to consider equalities issues including gender, race, disability, age, sexual orientation, religion and belief. Equalities impact assessments have been conducted with all of these equalities issues addressed, notwithstanding that the general legal duties do not yet cover all of these areas.

14.23 The Equality Act 2010 came on to the statute books this year but many of its

provisions await commencement. It is likely that from April 2011 the new public sector duty which extends 'due regard' to cover age, sexual orientation, pregnancy and maternity, and religion and belief, will have effect. The provisions relating to the duty in relation to socio- economic factors have also yet to be brought into effect. The Government is still considering its position in relation to these matters. As subsequent decisions are required regarding budget reductions, it will be essential to ensure that the most up to date position is reported to members.

14.24 Members are reminded that in considering the proposed reductions, the requirement

under all three statutes is to have regard to the need to eliminate discrimination and promote equality of opportunity. It is not a requirement to eliminate discrimination or promote equality. The duties are “have regard duties”, and the weight to be attached to them is a matter for the Council bearing in mind the issues of relevance and proportionality. It is an option available to members, provided that they grapple seriously with the duties imposed upon them by the equalities legislation, to take the view that the requirement to make a balanced budget, in times of such very severe financial restraint, requires the reductions proposed to be made.

The Human Rights Act 1998

14.25 Since the introduction of the Human Rights Act 1998 (HRA), the rights set out in the European Convention of Human Rights (ECHR) have been incorporated into UK legislation and can be enforced in the domestic courts without having to have recourse to the European courts.

14.26 Those Articles which are particularly relevant to public services are as follows:-

Article 2 – the right to life Article 3 – the right not to be subject to …degrading treatment Article 5 – the right to security of the person Article 6 – the right to a fair trial Article 8 - the right to respect for private and family life, home an correspondence Article 9 - the right to freedom of thought, conscience and religion Article 10 - the right to freedom of expression Article 11 – the right to peaceful assembly Article 14 – the right not to be discriminated against on any ground The first protocol to the EHCR added:- Article 1 - the right to peaceful enjoyment of property Article 2 - the right to education

14.27 Some of these rights are unconditional, such as the right not to be tortured or subject

to degrading treatment. Others may be limited in finite and well defined circumstances (such as the right to liberty); others are qualified and must be balanced against the needs of the wider community or state interest – such as the right to a private and family life. Where there are human rights implications associated with proposals in this report, these have been identified in the body of the report and regard must be had to them before making any decision.

Crime and Disorder

14.28 Section 17 of the Crime and Disorder Act 1998 requires the Council when it

exercises its functions to have regard to the likely effect of the exercise of those functions on, and the need to do all that it reasonably can to prevent, crime and disorder in its area. [Members’ attention is drawn to the likely implications where they are alluded to in the report].

Environmental Implications

14.29 Section 40 of the Natural Environment and Rural Communities Act 2006 states that:

‘every public authority must, in exercising its functions, have regard, so far as is consistent with the proper exercise of those functions, to the purpose of conserving biodiversity’. No such implications have been identified in relation to the reductions proposals.

15 HUMAN RESOURCES IMPLICATIONS 15.1 There are 58 proposals in Phase 1 which have a direct people impact. Of these, 19

proposals are not expected to lead to redundancies, although they will result in changes or deletion of 56 posts which are currently vacant or filled by temporary staff. A total of 39 of these proposals could potentially lead to redundancies, subject to the Council’s ability to redeploy the post holders.

15.2 Of the 56 posts not filled by permanent staff, 25 are currently occupied by agency workers.

15.3 Table 5 provides a breakdown of the restructuring areas identifying posts, vacancies

and agency covered post is described below:

Breakdown of restructurings by Directorate

Directorates Total Proposals Phase 1

With Possible

Redundancies Phase 1

Posts Possibly deleted through

redundancy

Proposals without

RedundanciesPhase 1

Posts; Vacant or

covered by Temps

Phase 1

Vacant posts

covered by agency

staff

Community 7 5 50 2 5 2 Resources 7 7 25 0 1 0 Regeneration 3 2 30 1 8 4 Customer 17 12 39 5 21 8 CYP 24 13 21 11 21 11 Total 58 39 165 19 56 25

15.4 In each of these areas detailed proposals have been produced and presented to

staff, who have been given an opportunity to comment. As at 8 October 2010 consultation had been completed in 33 of the 39 proposals, no significant issues have emerged. All proposals have also been sent to the trade unions.

15.5 An overall briefing on the content of this report has also been given to the trade

unions. Appropriate consultation processes in accordance with the Management of Change Guidelines and protocols issued to the unions have and will continue to take place in directorates. A series of Directorate JCC’s were held earlier in the year and further meetings are scheduled throughout October for staff and unions to put any outstanding views forward. A meeting of the Corporate Joint Council (CJC) is to be convened on the 28 October 2010 and a meeting of the Works Council will take place on 8 November 2010 for the unions to raise outstanding issues. Comments from the Trade Unions can also be submitted to Mayor & Cabinet at its meeting on 17 November 2010.

15.6 The Trade Union and Labour Relations (Consolidation) Act 1992 requires that

collective consultation takes place with recognised trade union representatives. The recognised representatives were written to in July 2010 and notified of the proposals to declare redundancies to address an anticipated general fund revenue budget deficit. There is also a requirement to notify the Secretary of State for Business Innovation and Skills of the proposed redundancies 90 days before the first redundancy takes effect and this was completed in August 2010.

15.7 Each service area will conduct an impact assessment of their reorganisation with

particular emphasis on ethnicity, gender and disability, the council is also monitoring the impact of the savings proposals on the grade profile of the council.

15.8 As decisions on selecting staff have not been made it is not possible to identify the

specific impact on any of these groups. However, it is possible to make comparisons between the composition of the service areas being reorganised and the population employed by the council, 720 people are employed in the 39 service areas being restructured, the composition of staff in this area compared to the population employed by the council is described below:

% of impacted % across the council population Ethnic Group • Asian 2.9% 2.6% • Black African 7% 9% • Black Caribbean 15.5% 19% • Black Other 3.5% 3% • Chinese/Vietnamese 0.5% 0.5% • Mixed Race 3.8% 3% • White British 57% 52% • White Irish 1.6% 2% • White Other 5.8% 6% • Not known/given 1.2% 1.2% • Other Ethnic Group 1.2% 1.6% Gender • Male 39.6% 36% • Female 60.4% 64%

15.9 The table below shows the percentage breakdown by grade of the posts affected by

restructuring compared with the total population, again there is no significant variance. Fuller details will be made available in the Members room.

grade band Number of posts

Population impact by Budget

Proposals Total Population

PO6 – SMG3 19 7.4% 8.2% PO1 - 5 95 37.4% 32% SC6 / SO2 98 38.1% 19.5% SC3/5 43 16.7% 23.5% SC1/2 1 0.4% 9.8% Other 0 0% 7%

TOTALS 256 100% 100%

15.10 Staff have been consulted on their views in each of the areas due for restructuring

as well as on how the Council should change and save via staff forums, manager’s conference, staff magazine, change & save mailbox and the online confidential survey. Over 500 suggestions have been received and posted on the intranet.

15.11 Suggestions have been sent to DMTs to consider and their feedback on the ideas received via this process will be communicated back.

15.12 The Council is supporting staff by offering ‘Understanding and Working through

changes’ workshops. These workshops have been well received by staff.

15.13 Support has also been given to all staff forums and they have been consulted on their views about how the Council could ‘change and save’.

15.14 Following consultation and prior to implementing proposals the council has a

process to identify staff to be selected for redundancy. This will be undertaken

through a combination of interviews, testing and management selection in accordance with the council’s change guidelines.

15.15 Displaced staff will be entitled to a period of notice from six to twelve weeks

depending on their length of service. The intention is for those staff who are made redundant to leave by the end of the financial year. The exceptions are anyone covered by the Disability Discrimination Act.

15.16 Plans are in place to support staff leaving the organisation with individual career

counselling as well as interview skills and CV writing courses, financial planning, career transition and business development. They will also have an option of a workshop to assist them once the training is complete. This is to assist them to either secure redeployment within Lewisham or find a new opportunity should they exit through redundancy.

15.17 As described earlier 25 of these posts are currently covered by agency staff, the

council employs a further 717 agency staff (506.58 fte). In Lewisham the two biggest users of agency workers are Adult Services within the Community directorate, and Environment (Refusing & Cleansing) within the Customer Directorate.

15.18 Council uses agency workers in two principal ways:

1. to cover short to medium term assignments, covering gaps created for example by maternity leave, sickness absence and annual leave.

2. Where there are business reasons including cost and flexibility, for example in Refuse and Street Cleansing, and in Day Care Services.

15.19 Agency workers are engaged through a Managed Service Contract. They currently make up around 13.3% (fte) of the Council’s total non-school based workforce.

15.20 There has been a marked reduction in the use of agency staff from 911 in August

2009 to 742 in August 2010.

15.21 The Council’s People Management Strategy is being revised to ensure the council continues to get the best out of staff during and after the organisation changes including:

• Ensuring an engaged workforce, building on the high level of commitment

which already exists amongst workers in the public sector • Improving performance management, identifying accountability and ensuring

employment and reward mechanisms reward such performance • Having a skilled workforce which is ‘fit for purpose’ i.e. ensuring the skills

contribute to improved outcomes for service users 15.22 Each of the reorganisation areas are reviewed by a senior HR manager to ensure it

appropriately reflects guidelines on the span of management control, layers of responsibility and management roles. The evaluation systems used for grading post particularly management posts also ensure that grades do not drift upwards as a result of managers simply taking on wider responsibilities. The Chief Executive has in the last few weeks briefed all managers in a paper which sets out a framework for managers to have larger spans of control in the future as well as changing their style of approach to deliver services with improved productivity.

16 EQUALITIES IMPLICATIONS

16.1 The Race Relations (Amendment) Act 2000, Disability Discrimination Act (1995, 2005) and the promotion of best practice in relation to other equality areas, require the local authority to ensure that their policies and actions do not discriminate and that the authority promotes equal opportunity and good relations among people from different groups.

16.2 An initial assessment of the equalities implications of the 2011/12 budget savings proposals has been undertaken to ensure that they do not unfairly impact upon particular vulnerable groups, sections of the local community or the Council’s workforce.

16.3 The Council has a legal duty not to discriminate and to promote equality and this analysis has been undertaken with regard to that duty. With the establishment of the Single Equality Bill, our duties will soon extend to encompass the six strands of race, disability and gender age, sexual orientation and religion/belief. We have therefore had regard for all six equality strands, race, disability, gender, age, sexual orientation and religion/belief in our equalities analysis.

Savings proposals which affect staff

16.4 Where budget savings proposals have staffing implications, and these proposals are approved, services will be required to undertake an equalities impact assessment (EIA) as part of their restructuring process. This is stipulated within the Council’s Employment / Change Management policies. Equalities Impact Assessment guidance recommends that a full equalities impact assessment is undertaken if a review of service or a restructure will result in a major service change; involve a considerable amount of money (large capital project); impact on a large number of people; or result in a major organisational change. As part of their operational business processes, services will monitor the impact of any staffing implications on service delivery and where necessary, take action to mitigate any resultant impacts.

16.5 An equalities impact assessment will be conducted on the 2011/12 Budget Savings process. This will mean that all savings proposals which have staffing implications will be considered to assess the overall impact on the organisation.

Savings from service reviews

16.6 Where budget savings proposed are linked to the Council’s Customer Transformation and Efficiency Programme, review managers are required as part of this review process to undertake a thorough equalities analysis to consider whether elements of the project design/delivery could impact differently on different groups within the local communities or staff. Review managers are also required where applicable to explain any positive impacts and how any potential negative effects will be mitigated. Guidance recommends that a full equalities impact assessment is undertaken if the review focuses on a major service change; involves a considerable amount of money (large capital project); impacts on a large number of people; or results in a major organisational change.

Specific proposals

16.7 The majority of specific savings identified in this analysis have a neutral equalities impact (90) and a number have indicated that there will be a positive equalities impact (2). There are however 22 proposals that were assessed to have a negative

impact: A schedule of the equalities impacts assessment has been attached at Appendix 6. Further work is being undertaken on the areas affected by the most significant service changes and this work will be reported on formally to Public Accounts Committee and Mayor & Cabinet.

17 ENVIRONMENTAL IMPLICATIONS 17.1 Any environmental implications are considered where applicable in the detailed

savings proposals. 18 CRIME AND DISORDER IMPLICATIONS 18.1 Any crime and disorder implications are considered where applicable in the detailed

savings proposals.

19 BACKGROUND PAPERS

Short Title Date File Location Contact Officer

General Fund Budget Strategy and Process

23 June 2010

1st Floor Town Hall, Corporate Resources

Selwyn Thompson

Financial Survey and Revenue Budget Savings Options 2011/14

14 July 2010

1st Floor Town Hall, Corporate Resources

Selwyn Thompson

Directorate Revenue Budget Savings

September 2010

1st Floor, Town Hall, Corporate Resources

Selwyn Thompson

For general information on this report please contact:

Janet Senior – Executive Director for Resources (020 8314 8013) Selwyn Thompson – Group Manager, Budget Strategy (020 8314 6932)