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Labour councillor’s 20-point plan to reduce service cuts

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CROYDON COMMENTARY: Unions are tonight staging a protest outside the Town Hall against the council’s plan for another £38million-worth of cuts.
Here, Labour councillor ANDREW PELLING, pictured left, outlines the ways he believes that the council can avoid causing harm to the most vulnerable in the borough

In these days of strained circumstances at the council, I’ve been hearing a phrase that I have not heard since Margaret Thatcher was Prime Minister: “There is no alternative”.

Under pressure: council officials have told councillors that cuts are the only way

It was a favourite of the Conservative Prime Minister that was jokingly abbreviated to “TINA”. TINA is today stalking the covid-emptied corridors and Members’ Room of Croydon Town Hall.

You can’t put to one side the proposed cuts, we are told, because there is no alternative.

But actually, there is.

We’re told there is no alternative as commissioners will be called in by the Conservative government to take control of the council, and there’s still £13million of cuts to find urgently, then £25million next year and £5million in each of the two years after that… There are no alternatives.

But actually, there are.

There are financial solutions that can bag the big swings in budget numbers that can avoid some of the cuts which hurt those most in need.

An example of hurting the needy, where I have very strong reservations, is the cuts to Council Tax benefits.

Some households will lose more than £120 per month. I just don’t see how Labour can, in all conscience, do this now. Especially when Labour itself locally is campaigning against Tory attacks on the money received by lower-paid workers.

Proper support: the council wants to take £5.7m away from the borough’s poorest

The timing of this £5.7million being taken out of the hands of the poorest in Croydon by a Labour council – I emphasise a Labour council – is just awful when people are struggling with crippling energy price hikes, furlough ending, the reversal of Universal Credit rises and a more than doubling in inflation.My councillor comrades know of my worries and have been kindly tolerant of them.

But all this is not necessary, at least not yet.

Savings can be found by returning to actually overseeing the implementation of contracts and inspecting the council’s contractors’ work.

We are told that contract oversight is in complete chaos. Information is missing. Contracts are being extended without checking whether the services are still needed in the form taken. The Regina Road debacle shows how contract performance is not followed through, even when concerns are flagged frequently.

Other costs balloon for the council when contracts fail.

A Labour council should treat their tenants with respect. Tenants’ needs increase if they are made to live in squalid conditions, increasing needs for rehousing, health and social care support, and increased educational support needs of their children.

Well-run contracts save huge overspends by the council. And then there’s the money to be got out of the private sector in penalties for non-performance. These private sector contracts should be made to sweat, to the big benefit of the council budget and frontline services.

Access to Axis: the Regina Road scandal highlighted how some outsourced council contracts are not providing proper services

I know that the council hopes to get to grips with the costs of temporary housing, which have long provided excessive profits to landlords for sometimes very inadequate accommodation.

The council has also been desperately slow in spending its separate capital housing money, where it still has cash. Lots of council blocks have broken doors. Safer secure blocks save costs by combatting vandalism, less costly mental health needs for insecure residents and lower heating bills.

A councillors’ weekly contracts overview committee is needed. Other councils have them, and Croydon used to have one. These frequent meetings help to improve value for money and also help to prevent malfeasance and corruption.

And talking of corruption, there’s no point having a new anti-fraud policy with obviously good officers if you don’t decide first how or whether to fund legal action.

The Town Hall’s trade unions complain about corrupt practices, including an historical allegation of £200,000 of council funds being siphoned off to build a home in the Caribbean. Stopping corruption protects front line services.

We should stop the flirtation – by both political parties – with arms-length operating companies. They have been the equivalent of financial death for Croydon Council. The Fairfield Halls Report In The Public Interest – expected sometime this month – will, I fear, raise serious concerns about inappropriate financial practice within the council. Just where has that £70million been spent? Uncertainties over an arms-length company are blocking the completion of two years of council accounts, and likely costing another small fortune in accounting costs.

Forensic accountants should be engaged to trace where the money has gone at the council and to pursue the litigation to recover it.

Fairfield Halls: where has the £70m been spent?

We constantly miss out on government funding by just not bidding for them. Frankly, it’s annoying the way governments run some funding this way. It’s expensive and plays up to individual ministers’ personal vanities. Just allocating money based on need would be more efficient and fair.

But this is how it’s done these days. Our council needs a dedicated bidding team to help access millions of pounds of funding.

Cutting planning officers is just stupid. Deliver planning decisions in a timely fashion and you attract investment and increased tax revenues.

The council’s pension fund continues to outperform in markets that have themselves been very (over) strong. The fund should be asked to take even less in contributions from the council than it has recently considered taking. In good times, the fund should support a friend in need at the council, when the council has supported it in the past when it was a dreadfully poor performer (under the Tories, by the way, who assert that they are supposed to be better at finance).

Interest rates are at historic lows. The council should and will borrow over the long-term. You can secure significant financial annual accounting savings by extending the maturity profile of the council’s huge debt and discounting repayment at a lower rate by having more years to pay back. There’s more than £3million a year of savings here – as much as half of the amount the council is saving by making those dreadful Council Tax benefits cuts.

With the council’s huge £1.6billion debt, managing it should be a full-time job. For every 1per cent saved in interest rates paid, £16million a year can be saved, to spend on stopping those cuts.

Answer the phone: the council could save money by being more responsive to residents

The pension fund has grown from £863.2million in March 2016 to £1.65billion as of September 2021. Much like it used to be said that British Airways was a pension fund that also happened to fly planes, the size of the Croydon fund is pretty big nowadays compared to the council. Like British Airways, Croydon is a pension fund that also happens to provide council services.

The fund is now 107 per cent funded. But the fund’s head of pensions also has to run the council’s treasury. A £1.65billion pension fund needs 100 per cent attention. The fund’s success has a huge impact on the council’s finances and our excellent pension board and our external governance advisers support a full-time post and an urgent look at adequate resourcing. Frankly, there’s big money here.

Just getting the basics right could yield huge savings for the council.

If you neglect residents, their needs just get greater and much more costly. Blocking contact with residents just increases costs. The council thinks that one way to manage demand for services is to avoid answering the phone. When Jo Negrini was chief executive, they reduced the hours that phone lines were open, ending the day at 4pm.

Stop the cuts: Andrew Pelling (left, with megaphone) has helped with previous Town Hall protests against cuts

Yet when I go visiting residents, door to door, one after another says the council does not even respond to the council’s preferred route of contact, online and by email.

There are some examples of really good beneficial demand management in the council. Drop the blunt blocking demand management, treat residents with respect and help them help themselves; it will save millions.

Unaccompanied Asylum Seeker Children (UASC) placements have taken a lot of money out of the council’s budget over many years. The government doesn’t fund all of it. Council services have to be cut to pay for what should be a national budget responsibility. Croydon’s understandably welcoming approach to those who come to our shores costs big money because we are a key port of entry with the Home Office immigration service here. We can’t take it anymore.

Croydon should be like Kent County Council and look to the courts to get the government to do its duty and decline to take more UASC, if necessary.

Sharing services with other councils is not supported by Croydon Labour, Katherine Kerswell, the chief executive, told me.

But this is not privatisation. We run the council to provide front line services, especially for the needy. Theological objections to sharing service organisation with other councils is parochial and fails to secure the kind of economies of scale that will pay for the services that are being cut.

Politicians go on about the government’s grant to Croydon being cut by 76 per cent since 2010. This is true. Lots of councils face such a grant cut. The government has put the burden back on the Council Tax-payer. Tax rises through sleight of hand.

Waste plan: properly supervising contracts, like the one with Veolia, could save Croydon millions

If the council genuinely has 76per cent less money per year, it would be shut, not broke. Other councils are not broke, and they have had similar cuts.

Based on the Retail Price Index, a more appropriate measure to council costs, the council has seen a bit over 20 per cent real terms cuts between 2010, when the Tories and Liberals started hacking away at councils, and 2019. This is the real cuts figure and it’s huge to cope with. Other councils are treated almost as badly.

For historical reasons and outdated demographic information, Croydon receives a lot less grant per head than more prosperous inner London boroughs. We need to employ the best lobbyists if we want a better grant. If we fail to bid for other funds anyway, government can use that as an excuse for not increasing our grant.

And, of course, ask the public and council staff for savings ideas. They often know best. Devolving budgets to communities will likely deliver major savings.

So we don’t need to be hurting the most needy in our town.

My 20-point solution is…

  1. Oversee contracts properly
  2. Don’t extend contracts without checking current need
  3. Good contract management reduces increase of residents’ other costly needs
  4. Apply contract financial penalties
  5. Make the private sector contractors perform better financially
  6. Create a weekly contracts committee
  7. Fund legal action to pursue fraud cases and combat corruption
  8. Stop using arms-length companies
  9. Employ forensic accountants to trace where the money has gone at the council and pursue the litigation to recover it
  10. A dedicated bidding team should capture all available government and agency funding
  11. Deliver timely planning decisions to bring investment and extra tax income
  12. Secure money from the overperforming pension fund
  13. Have a full-time treasury officer and a full-time pensions officer
  14. Manage debt to reduce interest costs, thus saving many millions
  15. Lengthen debt maturity profile and account for this over longer time span to aid budget significantly
  16. Change blunt demand management. Get the basics right. Answer the phone
  17. Tell government we’ll go to court to recover Unaccompanied Asylum Seeker Children costs or else refuse to take more
  18. Share services with other councils
  19. Lobby professionally for a fair government grant
  20. Trust council staff and the public to identify savings and pilot devolving budgets to more cost-conscious local communities.

One last thing that surprises me. Croydon Conservatives voted for the council’s budgets in 2019 and 2020. They used to present alternative budgets (I know this, because I used to do it for them in the Town Hall and City Hall).

I think this shows that Croydon’s Tories have no ideas about how to recover Croydon’s budget and nor how to stop some of these cuts to services and payments to the needy.

Tories made a mistake in rushing to choose their Mayoral candidate in the form of an uninspiring current leader of their council group. The Tories, it seems, are happy to have no ideas and rely on just repeating the mantra “bankruptcy, bankruptcy, bankruptcy” to try to get elected.

It may prove insufficient to be the “No Ideas Party”.

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