It’s nothing short of miraculous that some local authorities remained ‘sustainable’ in 2017, writes Richard Harbord who looks back on a year that saw an increase in officer investigations and forward to a year in which financial restraints may make shortcuts attractive.
As all good annual reports say 2017 was a difficult year but was it as the Queen viewed her year in 1992, annus horribilis, or, was it as 1666 was viewed, an annus mirabilis?
It is probably true that it is a miracle that some authorities are still sustainable, and it has to be set in the context of 1666 being the year of the Great Fire of London. Clearly, the term was coined by an optimist.
For many last year was just the latest in a long series of difficult financial years where balancing prudent budgeting with the need to keep services going remained an increasing challenge.
How different the budget process is today from when I first became a director of finance in a London borough. How we laboured and polished our lists of growth items for possible inclusion.
Some were agreed automatically as products of policy decisions taken in the previous year or increases in demand. Others were hotly contested bids for new services, or growth in services, and, at the end of the day, a matter for member decision.
Back then this was set against the background of an overall rate increase. Ten percent, or so, in the year after an election to a modest and controlled inflationary increase accidentally coinciding with election year.
I still remember my first year when a 34% increase was required to rebuild the reserves used by my predecessor to secure what the local paper described as a fitting final zero percent increase to crown his remarkable career.
Not quite my thoughts when I took over and found we were in negative reserve territory.
I was convinced that my first year would be my last and the local paper did not regard the increase very kindly at all. Budgets were straightforward, general reserves were considered to be at a reasonable level by the external auditors if they represented 15% of gross expenditure. I can recall one director at another authority arguing that anything above 5% was stealing from residents and that our budgetary control was so good it would be scandalous to exceed that threshold.
Short cuts
The current protracted austerity has caused considerable stresses in the system. The need to meet member requirements and keep services going is paramount.
Many authorities I know have assured council leaders that there will be no additional significant cuts this year and they will therefore be tempted to take short cuts to make a lawful budget. There is no doubt that the areas of adequate provision and assured savings programmes are the front line in this and it is becoming increasingly hard.
The future is not encouraging. As I have pointed out elsewhere, there is an alarming lack of certainty in the latter years of current financial strategies.
The Fair Funding formula and the progression to 80% of business rate devolution being notable cases in point. The failure of central government to address the current difficulties in social care and increasingly children’s services are not helpful.
The hesitant and uncertain process towards structural reform also causes further difficulties. The secretary of state is minded to agree certain mergers but on what terms and how does that affect others?
I will not comment further because I was taken to task, after an earlier article, by people who felt strongly that we should be moving towards smaller and more local authorities on the European model.
Investigations
One of the most noticeable things about 2017, and I have to declare a personal interest as I spend much of my time on officer and member investigations, is the increase in the number of chief officers who were the subject of inquiries and were suspended in the year. It covered all types of chief officer but there were a number of section 151 and monitoring officers.
On Boxing Day The Times covered research obtained by Freedom of Information request which they claimed showed local authorities spending £50m a year on salaries of suspended officers.
They claimed that in 2017 around 2,100 council staff were suspended on full pay. The figure was 1,700 in 2013. Interestingly research by the Taxpayers Alliance in 2011 showed very high figures as well at that time.
Nevertheless, there seems to have been a significant increase. Around 400 of these, it is reported elsewhere, are for social media abuse. The Times claims that one employee has been suspended on full pay for three years while the three authorities with the largest problems are Birmingham (330) Glasgow (283) and Brighton and Hove (194). The alleged offences covered fraud and theft (402 cases), inappropriate behaviour (242), harassment (123), various safeguarding issues (127), alcohol and drugs (167), and assault (81).
Clearly it is an important report with sizeable financial consequences. The report deserves a wider debate.
I hope that the challenges of 2018 are sufficient to hold your interest but not disproportionate to your enjoyment of your job.
Happy New Year.
Richard Harbord is a former chief executive of Boston Borough Council.
