Conservative councillors are in the frontline of the government’s battle to reduce the deficit. We are halfway through the financial year, and the challenge of making 28% grant reductions. As the majority party in local government we have had to take the hard decisions to reduce jobs and cut services.
My own council Westminster has faced sharper reductions than many, hit by falling commercial income, rising demands on services, including £50m of unfunded services for visitors to London and reduced government grant. We are meeting the challenge of the new financial stringency achieving an annualised reduction of £30million in our spending because we took tough, perhaps even draconian action early to turn off the spending tap. While this approach has not been without consequences, it does highlight how you can quickly reduce spending without destroying public services.
I think that there are five critical elements to our approach, which can be summarised as realism, honesty, choices, momentum and leadership.
First, robust realism to cut early. We were clear that there would have to be cuts and debated over the winter about how and where to reduce spending. We considered increasing council tax, but took a principled decision that we couldn’t increase tax when local people were facing hard times. We front loaded spending reductions, started the Tri Borough shared services programme, made significant reductions to back office services and increased charges to ensure we had sufficient funding to see us through the year. We agreed a package in March that reduced spending by £55million over three years, with up to 80% of budget cuts away from frontline services, taking £4m out of communications, legal and policy functions alone, and froze council tax while using reserves to cushion the blow of budget cuts.
Second, we were honest about the consequences of not making the cuts. We were specific and open with local people and community leaders about what we might cut through our ‘Tough Choices’ consultation programme. We were upfront with staff about the consequences for their jobs, seeing over 500 roles made redundant. And to ensure that the organisation, and officers knew that we were serious we implemented a recruitment freeze requiring the Cabinet Member for Finance to sign off every request to advertise a job vacancy. This helped reduced the numbers of roles we advertised each week from around 15 to zero, as senior officers understood that we were serious about driving down costs.
Third, be brave about the big areas. Two thirds of our funding is in adult’s and children’s services. We took some hard decisions here – We are taking £15m out of children’s services, but delivering more targeted provision. We are increasing eligibility criteria, reducing travel for elderly people, closing some facilities, but explained and consulted along the way. In many cases it seems that older people understood far more clearly than others the damage that Labour had done to our economy because they had seen it before, and understood the consequences, but these were still hard decisions, not taken lightly.
Fourth, keep up the pressure and momentum. As the 2011-12 financial year has moved on we saw many of our savings plans come to fruition – around 85% are on track, but some aren’t so we had a reserve list of up to £5million additional savings we could deploy. These were not things we wished to do, but financial credibility is at the heart of our roles, so we had to be prepared to act.
Finally, political leadership means that you don’t let up. We had clear messages to our staff, asking them to spend taxpayers money “like it was theirs”. This helped reduce discretionary spending. Leading councillors went on regular visits to the frontline to encourage officers in their work and to meet the savings targets. Monthly financial reports are obviously a key part of our discussions and officers are held accountable for the savings programme through our ‘Delivery Assurance’ groups.
I fear that many authorities – and I know some Labour ones – are putting off the day of reckoning, using up reserves and essentially waiting for a financial Godot. It won’t come and they will be forced into urgent, savage cuts because they did not plan, with inevitable consequences for their citizens.
Our approach has not been without consequences. Decisions to rationalise our youth services, reduce some recycling provision, undertake less maintenance will have some impact on the heart of London. But the country cannot afford the profligacy of the Labour years, and these are Labour’s cuts, the consequence of economic illiteracy.
But we’ve also learnt some radical things along the way.
We’re fundamentally changing services, illustrated by our new mandate for Adult Social Care. At its heart is the simple proposition that too much state care can shorten your life. The argument made by professionals in our paper is that we must get older people to take more charge of their own care and do more things themselves, because the evidence shows that these personal choices and responsibility prolong life, and it will reduce the cost of social services. It’s a radical choice and the right route, but not something we would have considered had we not been faced with spending reductions.
We’re empowering communities, through our Civic Community programme to drive the ‘Big Society’, implementing a new £100,000 small grants fund alongside our existing £1million neighbourhood budget fund, because this is a priority and we believe that it will empower local people to build a stronger society.
And we’re sharing services. This testing time has helped give birth to the “Tri Borough” programme, an initiative between Westminster, Kensington and Hammersmith to share and improve services while saving up to £33million a year.
We’ve learnt a lot over the past year, but by making tough choices early, being open with our residents and being creative about future service provision, we have successfully mitigated the impact on our citizens, and are doing more with less.