‘No room to manoeuvre’ - Council leader responds to cuts

The grim assessment comes as the council's cabinet yesterday received a report that set out the unprecedented scale of the savings the authority will have to make.

Speaking after the meeting, Councillor Peter John said the cuts, which are the highest in cash terms in London and which are frontloaded, removed any flexibility the council might have hoped for and left the administration with little choice but to take some very difficult decisions.

Cllr John took the opportunity to reaffirm his commitment to a borough where everyone can take advantage of the opportunities that come from being in the heart of London.

But he said making the vision a reality will require the whole borough to stand up and be counted. When it comes to finding the long term innovative solutions for the borough, he added, people can no longer be "backseat drivers".

At the meeting cabinet member for resources Richard Livingstone confirmed that moving forwards, a further report will be presented to Cabinet on 25 January 2011 on the draft budget for 2011/12, and future years.

This will be in advance of the Overview and Scrutiny meeting to discuss the budget proposals on 31 January 2011. The budget will be proposed to Council Assembly on 22 February 2011.

Speaking after cabinet, Cllr Peter John, said: "We finally have it in black and white. These cuts are at the upper end of our expectations, they are frontloaded and they leave us with very little room to manoeuvre.

"Despite having the largest cut reduction in London, Southwark has not been allocated the transition grant that has been offered to a number of other authorities.

"It is going to be very difficult to protect services in the coming years.

"We have a long-term vision of a borough where everyone can take advantage of the opportunities that come from being in the heart of London.

"We are not going to give up on our ambitions. I believe we can find the innovative solutions that will ensure we can deliver our vision.

"But everyone is going to have to pitch in - residents, charities, businesses. There will be no space in this borough for backseat drivers when it comes to finding the innovative solutions for Southwark.

"The challenge for all of us has just got harder - but so has our determination to rise to the challenge. We will be engaging with all our communities in a frank and open discussion, then taking decisive action."

Read the cabinet report

The cabinet report confirms the following details:

1. The Government's figures show that Southwark's formula grant will reduce from £262.446m to £232.790m: a reduction of £29.656m or 11.3%
2. The Government also set out the provisional 2012/13 formula grant of £214.821m, a further reduction of £17.167m or 7.4%
3. Southwark is therefore facing the largest reduction in formula grant, in cash terms, in London
4. These cuts are at the upper end of our expectations and will necessitate extensive budget reductions for 2011/12 and 2012/13
5. The Government have devised a new measure for the impact of grant reductions on local councils, termed revenue spending power. Revenue spending power is an aggregation of the formula grant, other specific grants, council tax and NHS funding for expenditure on social care. Using this measure, Government's figures show that Southwark will lose a total of £33.7m in 2011/12 and a further £16.2m in 2012/13. These amounts represent 8.4% and 4.5% respectively of our revenue spending power for those years.
6. The reductions set out below are all in cash terms rather than real terms. Once inflation is considered, the impact will be significantly greater.
7. As expected, in addition to the loss in Formula Grant, Southwark will be losing its £6.7m of Working Neighbourhoods Funding in 2011/12
8. The report sets out how the £103.5m that the council received this year in specific and unringfenced grants will be distributed. £31.7m has been moved into the Formula Grant, £33.1m to the Dedicated Schools Grant and £35.1m has been moved into other core grants. As yet, Government has yet to give an explanation on the fate of the remaining £3.6m

Recommendations (agreed by cabinet), that cabinet:

1. Note the provisional local government settlement for 2011/12 and 2012/13 which was published on 13 December 2010
2. Note that the issues in this report and subsequent analysis form the basis of a formal response to the consultation on the provisional local government settlement which must be submitted to government by 17 January 2011
3. Note that the Leader is writing to the Right Honourable Eric Pickles, MP, the Secretary of State for Communities and Local Government (CLG) to request a meeting to discuss the proposals set out in the provisional settlement
4. Confirm that the budget principles agreed by Cabinet on 21 September 2010 continue to guide and underpin the work of officers in arriving at a balanced budget in February 2011
5. Taking all the issues in this report, instruct the Finance Director to report back to the Cabinet at its meeting on 25 January 2011, and in advance of the 31 January Overview and Scrutiny meeting, on the budget for 2011/12, and indicative budgets for 2012/13 and 2013/14
6. Note the updated draft medium term resources strategy and instruct the Finance Director to present a final version at the 25 January 2011 Cabinet meeting

Consultation

The cabinet have undertaken a number of 'fairer future for all' budget consultation events and consultation exercises. This has involved seeking views from each community council and meeting with key stakeholder groups. The outcomes of the consultation will be made available through the council's website and other communications and publications as appropriate, in time for budget setting.

At their meeting on 15 November it was agreed that Overview and Scrutiny interview all cabinet members about budget proposals for their portfolios on 31 January 2011.