Guest blog: Paul Brant explains how Liverpool council is preparing for a financial storm
In the words of one unnamed Government minister, if you think you've seen cuts, 'you aint seen nothing yet'. George Osborne has told ministers to prepare for between 25-40% cuts in the next few years. Even the Thatcher Government didn't attempt anything like this scale of cuts.
As a newly elected Labour council we are committed to trying to minimise the impact on frontline services, but this means that we must take steps now to prepare for the tsunami of cuts which we are about to be hit with.
If we don't take steps now we run the risk of being overwhelmed by the scale and speed of savings which will have to be made. If this happens then wholesale loss of non statutory services are possible, and many of these serve some of the most vulnerable sections of our communities.
The first step we took when we came into power was to slam the breaks on non-essential appointments to the council. We have acted to reduce money spent on conferences, office furniture and pot plants, however this will only get the council so far, the vast majority of council expenditure is on staffing costs.
If protecting frontline services means anything, it means trying to make savings from senior management and upper management first. Our senior managers have agreed to give up their right to contractual bonuses, this will save over ã500,000 a year, and is a good example of how the council staff are all pulling together to prepare for what we know is coming.
We know that a council with 25-40% less income will have to employ fewer people, but we determined not to target those at the bottom first as so often happens when cuts are made. We have first turned to those who earn over ã100,000 for volunteers for early severance. We are slowly working down the earnings levels in the council seeing who wants to take voluntary severance and thus reduce the council's overall wage bill. The restructured organisation which emerges will be leaner, and may not totally avoid service reduction, but it would undoubtedly be much worse if we just waited like rabbits in the headlights for the cuts which are coming.
It is deeply unsettling for all people in the council to see big names leaving, especially when we have had a team who have through hard work and delivery earned loyalty and trust. However if we do not take steps now to slim down the council with the consent of the workforce, the alternative would be much worse.
As Liverpool City Council gets 80% of its income from Government, it is very much the plaything of the Lib Dem/Tory coalition's actions. We have already seen our BSF Schools rebuilding program axed, and over ã9million of in year cuts to the mainly voluntary sector funded programs. However the real cuts are going to be announced in October, and will ricochet around the public services for many years after.
The difficult steps being taken now are an attempt to batten down hatches before this storm hits.
Paul Brant is deputy leader and cabinet member for finance at Liverpool council.
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David Bartlett
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This is all very well. Sacrifices do need to start at the top. But Councillors like Paul Brant need to look to themselves too. What sacrifices are they making? As people start losing their jobs lower down the hierarchy as the Coalition cuts sweep in, how will Councillors share the pain?
Yes, I know they must be missing their pot plants, but there are plenty of other perks floating about. A number of Councillors (let's mention Alan Dean & Richard Kemp for starters) are on nice little earners - chair of this, member of that - hoovering up the attendance allowances and 'expenses'. A 25% overall cut in that particular gravy train wouldn't be out of place.
And before Councillors on all sides start bleating and telling us how hard they work sitting on the Committee for Folding Deckchairs, remember that hundreds possibly thousands of local citizens give their time completely freely to sit on the Governing Bodies of schools, colleges, health trusts and so forth.
So Paul, a 25% cut? Fair? Reasonable? How do you plead?
Reported on our website on 27th May:
"Changes in the structure of the council have led to an increase in scrutiny committees. The outgoing Lib Dem administration objected that this leads to increased costs for the council, given that each chair receives an additional allowance. However the new structure matches each cabinet member with just one scrutiny committee and this should lead to shorter and clearer meetings.
To offset the cost, the Green Party proposed a reduction in those allowances from "Level 5", i.e. ã9,339 p.a. to "Level 6", i.e. ã6,476 p.a, arguing that there would be a simplified and, it is hoped, reduced work load for the new committees.
The Lib Dem group supported that proposal (with the exception of the two Lib Dems who are themselves chairs of scrutiny committees), but it was defeated. Cllr John Coyne has decided unilaterally to reduce his allowance to the lower figure."
What drivel. Perhaps Paul Brandt should be looking at the example that senior Liverpool Labour politicians are setting as part of the cost-cutting exercise. Joe Andersons self-declared 50% increase in his allowances to ã50K plus is a slap in the face to all those people working in the voluntary sector who now have to face an uncertain next twelve months due to the cutback in guaranteed service-level agreements. Whatever happened to the ethos of "public service"? Not only that, some reports suggest that ALL the Labour Cabinet will be going over to Shanghai Expo [presumably to help carry the flight baggage for the Liverpool Phil and OMD]. Basic lesson here is Vote Labour, get pious excuses, weak and submissive senior management and a totally demoralised workforce. Never mind, eh Joe...fill yer boots while you can.
One glaring omission from the list of possible initiatives is action in relation to LDL. And in particular, profit sharing. Last autumn the review of LDL commissioned by the council raised the issue of profits from services provided by LDL to third parties - LCC were not getting any.
The "latest" annual report from LDL (2008-9, on their website and at Companies House) boasted of 9 MILLION POUNDS in additional revenue generated by services provided (by LCC-seconded staff) to everyone from Northumbria Police and Reigate Borough Council to the Amateur Boxing Association, but not a penny of this money went through the accounts of LDL - it was all billed and collected by BT. God knows how much it was in 2009/10, they haven't submitted the accounts yet.
But the services were provided by LDL, at their expense - most will have been labour costs, which are paid by the Council - i.e., by us.
Of course, according to the LDL founding documents, the Council is not entitled to any dividends, if LDL should ever declare a profit, but surely the whole point of this joint venture was to develop a business that could develop the skills to generate income to subsidise the costs of the work it does for Liverpool by doing work for third parties. They certainly seem to have developed the business but we (i.e. the Council) have seen no benefit whatsoever.
Before the election, the completed review report was due in February 2011, but has now disappeared from the select committee work programme. Why?
I know that a scrutiny panel has been established, but it's not clear what powers it has. None, I suspect. It certainly doesn't seem to have done anything.
I agree with Katie54, action needs taking with LDL revenue. This is supposed to be a joint venture, so when are LDL going to hand over some money and when is this Council going to make them.
Brant talks about cuts and a recruitment freeze but what about LDL. LDL are still splashing the cash and recruiting permament staff on secondment while Brant counts the pennies in the town hall and ponders cutting staff and services. What are LDL cutting??
Possible cuts to be made by LDL could include the massive "management fee" paid to BT (over 32 million in 2009 - more than the total payroll for the 1500 odd people "seconded" to LDL), or possibly some of the "investments" made - 4 million in 2009 (16 million since the contract started). Since none of this money has ever created any assets for LDL (which, amazingly, does not own any fixed assets at all), it was either a total waste, or used to create assets for BT. I can't see why we should continue to fund this.