As we start the new financial year it is obvious that things are not likely to get any easier for section 151 officers. Although it will be much more of the same as year follows year, the pressures become greater and greater. The Agent151 blog last week set out very well the pressures that section 151 officers find themselves under from all sorts of angles to cut corners and deliver to a wide range of agendas.
This has clearly brought into focus the whole issue of the signed-off balanced budget. When first conceived, this seemed to be an interesting safeguard, but with minimum impact on real life. That has, of course, now changed beyond all recognition.
I would submit that there have always been pockets of difficulty. When I look back I realise that as deputy director at a London borough, the director and I had a perfectly workable but slightly flawed arrangement where he dealt with the budget and budgetary control totally, and I did everything else.
I was very young and inexperienced at the time and this arrangement suited me well. But then the director announced his retirement, which was to be the 31st March next, and to everybody’s surprise, and to the immense delight of ratepayers, press and members, achieved a budget requiring no increase in general rates whatsoever. This was the early 1980s, inflation was rampant and no London borough had achieved such a feat for a number of years: what an amazing man to be able to manage such an enviable result.
I know the budget was beautifully crafted, I have the one page of A4 in his handwriting with all the calculations present. I took over as director on 1st April and all seemed well with the world. But by the 30th June the chief accountant and I realised we were running out of money.
That is to say, we were approaching a negative cash position. There was nothing left in any of the revenue reserves. We had a little mid-year budget in which I explained to members what had happened and in the following year, on the occasion of my first rate making, I persuaded council to agree a 38% increase. The contrast between his popularity and mine at that point in time was marked. The public and many members failed to see the connection.
One of the remarkable things about this story is that we were able to levy a rate of 38% without government showing a flicker of interest. Under today’s regime I suspect my career would have ended at that point.
Difficulties
At the moment, the balanced and lawful budget is receiving a great deal of attention. Auditors are taking greater interest than ever and the National Audit Office has completed some work for the Public Accounts Committee. There have also been one or two recent reports on authorities where difficulties have arisen. No one, of course, knows how many authorities are in “difficulties”, though I see the LGA has discovered that only “good” authorities are putting themselves forward for peer reviews. I don’t know why anyone should find that surprising.
But there does seem to be a difficulty around the achievement of savings. To be lawful, savings included in the budget need to be clearly agreed as policy and achievable in the time span. Often it is not the quantum of savings that causes the difficulties but the unrealistic schedule for achieving them. Clearly, adequate resources need to be made available to manage corporate savings programmes and regular reports on the position are essential. There also needs to be an acceptance that things will change and that overall adjustments to budgets will be necessary as the year progresses.
With that in mind, I foresee some difficulties now around social care finance. The guidelines for the additional money from the budget to the Better Care fund have just been announced. This comes just as the year begins and the discussions with health colleagues over the likely outcome now need to take place and agreements signed. DCLG want s151 officers to certify that 100% of social care precepts have been used for social care. The first draft of such a letter would have been difficult to sign because it is a complicated budget with all sorts of pluses and minuses making it problematic to certify exactly what the precept will be used for.
Extras
Despite its current high profile social care is not the only budget difficulty currently facing local authorities. As I have said elsewhere, almost all children’s services departments are likely to overspend on safeguarding in 2016-17, and there has been no help offered in this area at all. Then there is the uncertainty over the actual 50% of business rates retained by authorities and the adequacies, or otherwise, of the provisions made. There is also a temptation not to challenge robustly enough external consultants’ estimates of savings from transformation. So much depends on achieving changes in culture etc, and these always take longer than the original view — even if they can be achieved at all.
Then there are issues indirectly affecting councils. I wonder if anybody has really worked out, with certainty, what the changes to the interim market under IR35 is likely to cost? Many interims have left the scene and daily rates seem to be considerably higher under the new system than the old.
It will be “another difficult year” – a phrase that we used every year in outturn reports, even when they weren’t, and clearly now they are.
I am sure that the next 12 months will bring a number of real difficulties for authorities but hopefully also major triumphs where everything is delivered against the odds.
Richard Harbord is the former chief executive of Boston Borough Council.
