The Mayor in his opening remarks referred to the need to plan ahead through to 2019/2020 and in doing so there would be reduced service delivery in some parts of the Council or services provided in a very different way.
Over the next three financial years, it was envisaged that financial reductions would be made within the 'Change Agenda', resulting in savings of some £39 million. It was stated that the proposed reductions would be progressive and incremental and were broadly as follows:-
1. Cost of statutory services to be reduced by £7.7 million.
2. Cost of non-statutory services to be reduced by £5.4 million.
3. Cost of back-office administrative procedures and practices to be reduced by £13.4 million.
4. Cost of customer contact and interface to be reduced by £6.7 million.
5. Cost of building accommodation for Council employees to be reduced by £2.3 million.
In addition, reference was made to the intention to invest in intervention programmes at an early stage in order to reduce subsequent demand, which would result in savings of approximately £3.2 million.
In terms of the 2014/2105 budget process and on the basis of current assessment of government spending plans, it was expected that Council spending for the next financial year would need to be cut by up to £22 million.
In addition to having to address reduced funding the Council had to deal with rising demands placed on services such as the need to increase support for vulnerable people including children looked after and dealing with the growing needs of an ageing population.
Since the meeting of the Council held on 16 October 2013 work undertaken to minimise the extent to which services would be reduced had resulted in a set of mitigating actions that totalled £7 million in 2014/2015 summarised as:-
Mitigating demand for Adults and Children £1.8 million
Use of additional external funding opportunities £1.0 million
Pension contribution adjustments £0.7 million
Senior management reductions £0.4 million
Inflation reduction proposals £1.8 million
Income increases £1.3 million.
The remaining £15 million gap required the need to continue to restructure and refocus services across the Council to reduce costs and to make financial cuts, so that a balanced budget could be achieved for the financial year for 2014/2015.
In terms of the proposals, in many instances, the savings were 'part year' and would therefore offer further savings beyond 2014/2105. The proposals put forward were as follows:-
'Neighbourhoods and Communities'
1. Cease the provision of bedding plants for all areas other than the Cenotaph, town centre, cemeteries and the crematorium, which will save £100,000.
2. Cease the replacement of felled trees, which will save £15,000.
3. Reduce the maintenance of shrubs and hedges from annual to bi-annual maintenance, which will save £35,000.
4. Reduce weeding applications from three times a year to twice a year, which will save £65,000.
5. Halve the frequency of litter picking and street cleansing, which will save £198,000.
6. Reduce the grass cutting and associated works in public open spaces with the exception of formal spaces in parks, cemeteries and playing pitches, which will save £65,000.
7. Invest in vehicle technology that reduces the resources required to undertake road gully cleaning, which will save £60,000.
8. Terminate the subsidy for allotments, which will save £10,000 and allow the allotment holders to manage the asset.
9. Cease the maintenance and upkeep of one bowling green in Pallister Park and two in Albert Park, which will save £10,000.
10. Merge Parks, Streetscene and Cemeteries management, which will save £100,000.
11. Merge Area Care and Waste Management services, which will save £60,000.
12. Contract out highways maintenance functions, which will create an efficiency of £600,000 to either help meet the financial gap, or allow for more roads to be maintained.
13. Create a new enforcement service by combining Street Wardens, Parking Enforcement Officers and Council neighbourhood enforcement functions, which will save £200,000.
14. Cease funding for Community Councils, which will save £12,500.
15. Merge the operation and management of the five community hubs, libraries as well as other community facilities, with a new model of promoting self-service technology, which will save £474,000.
16, Redesign and contract out Homelessness services and Welfare and Money Advice, which will save £200,000.
17. Implement a new project based service model, which will entail the purchase of 'people expertise' for specific projects, rather than employ similar people on a full time basis for Economic Development and Regeneration activity, which will save £391,000.
18. Merge Ayresome Industries with Streetscene Services, which will result in management and accommodation changes, which will save £54,000.
19. Close Clairville Stadium, which will save £104,000.
20. Reduce leisure centre opening hours and reduce staffing levels, which will save £700,000.
21. Contract out Fleet Management and Vehicle Maintenance Services to an external provider, which will save £156,000.
22. Contract out Building Cleaning Services, which will save £252,000.
23. Contract out Council Property Services, which will save £400,000.
24. Merge Environmental Health and Trading Standards management and administration, which will save £106,000.
Wellbeing Care and Learning
25. Renegotiate our joint management costs with Tees Esk and Wear Valley Mental Health Trust, which will save £100,000.
26. Secure alternative funding for Middlesbrough Intermediate Care Centre, which will save £165,000.
27. Introduce a new operating model for Adult Social Care to reduce the work that is required to be undertaken by fully qualified Social Workers, which will save £597,000.
28. Introduce a new operating model for Children's Safeguarding Services that reduces duplication and management costs, which will save £575,000.
29. Merge Children's Centres and Youth Services, which will save £500,000.
Corporate and Central Services
30.Modernise the way in which back office services are delivered by automating processes, make greater use of IT and merge similar functions to deliver savings of £7,600,000.
31. Close Middlesbrough Teaching and Learning Centre, which will save £145,000.
32. Close the TAD Centre, which will save £119,000.
33. Close the Register Office and relocate the registration of births, marriages and also deaths, which will save £20,000.
34. Close Park House and relocate Children's Safeguarding teams, which will save £30,000.
35. Close the Albert Terrace facility and relocate the Families Forward team, which will save £10,000.
36. Introduce a new operating model for the Council Tax, Housing Benefit and Social Fund departments, which will serve £271,000.
37. Introduce a system of payments in advance for all Council services and greater use of Direct Debits, which will save £68,000.
38. Increase the number of Council services that can be accessed by the use of Information Technology, and reduce face to face customer contact, which will save £75,000.
39. Reduce Trade Union facility time, which will save £43,000.
40. Merge the functions of scrutiny support, governance and all other ancillary functions that support Elected Members, which will save £217,000.'
The 40 proposals added up to a total of £15 million, of which approximately £5 million was concerned with front-line services, the remainder £10 million being made up of cuts to 'back office administrative ' functions, changes to the way the Council manages or arranges its business and greater use of Information Technology.
Approximately 40% of the value of the proposals were based on modernising the Council's Information Technology and 27% related to contracting out of services.
The impact on staff was considered to be significant but unavoidable. It was anticipated that there would be around 600 job losses but that approximately 300 would be involved in staff transferring to organisations the Council contracted out current services to, who would be subject to TUPE regulations and the remaining loss of 300 posts involved a large percentage of the people affected leaving by early retirement/ voluntary redundancy process and natural retirements, with others leaving to take up employment with other organisations. The Mayor indicated his intention for the number of compulsory redundancies to be kept to a minimum and referred to a proposed improved range of support measures to be provided for staff affected by the proposals.
It was confirmed that the 40 proposals would now be subject to a six week public consultation exercise, which would run until 3 January 2014. It was proposed that a further Special Meeting of the Council be held on 20 January 2014 to outline the feedback received from the consultation exercise on the proposals and any changes thought necessary and any new proposals or otherwise to address any gap as a result of changes.
In relation to mima the Mayor stated that from next year, Teesside University would take over the day to day running while the Council would retain its involvement as a main funding partner alongside the Arts Council. Under the partnership, mima would complement the University's existing School of Arts & Media, taking the faculty onto another level and increasing its national and international reach. The partnership would result in the Council saving in the region of £350,000 per autumn.
Examining next year's Council Tax the Mayor indicated that a number of factors had been taken into account including the current level of Council tax, levels of inflation, pressures from caring of vulnerable people, level of budget reductions required and the medium to long term implications of the Government's recent financial statements. The Mayor indicated that the freeze grant should not be accepted and that the Council Tax should increase close to 2%.
In response to Members' questions the Mayor provided further clarification in respect of a number of areas including the benefits of the partnership arrangements with Teesside University in respect of mima which included agreement to develop a new building in Centre Gardens East to extend the University's School of Arts and Media which would complement and enhance the mima facility.
It was hoped that the first phase of the Sports Village would be open as soon as practicable after the closure of Clairville Stadium.
Reference was made to the proposed rationale of using consultants for project based service model for economic development and regeneration.
Given the changed circumstances to funding arrangements and cuts it was proposed that the demolition of houses in Phase 2b, Gresham should now not go ahead and residential property owners and operating businesses receive packages of financial assistance to assist with refurbishment. Following clarification sought by Members the Mayor indicated that interest had been shown by a developer in respect of the vacant sites within Gresham.
The Mayor confirmed that he would consider suggestions put forward by Members together with those arising from the overall consultation process.
Members acknowledged the position in which the Council had been placed and of the need to prepare for further significant reduced financial resources.
ORDERED that the proposals outlined above be noted.