COUNTY BOROUGH OF BLAENAU GWENT
REPORT TO: /THE CHAIR AND MEMBERS OF Environment economy and INFRASTRUCTURE scrutiny
REPORT SUBJECT: /Wales Audit office service based budget review report
REPORT AUTHOR: /lisa jones
LEAD OFFICER/ DEPARTMENT /hannah Meyrick, Business transformation and development manager/ Environment and Regeneration
Summary Report
1.0 /PURPOSE OF REPORT
To provide Members with an update of the findings of the Wales Audit Office Service Based Budget Review in Environmental Health, Housing and Waste Management.2.0 /
LINK TO CORPORATE STRATEGIES
Medium Term Financial Strategy3.0 / SUMMARY
The Wales Audit Office Service Based Budget Review Report concludes:
· Environmental Health performance is mostly improving but limited work has been undertaken on improving value for money and it is unclear if the service is sustainable in the medium to long term.
· Housing services performance remains mixed and the lack of capacity and limited progress in improving efficiency and value for money, suggests that the service faces significant challenges.
· Waste Services is spending more and whilst improving from a low base, future savings will be difficult to deliver without performance declining.
4.0 /
RECOMMENDATIONS
To improve service efficiency and Value for Money by:· Identifying and agreeing what each service’s statutory and non-statutory requirements are across the Environment and Regeneration Directorate.
· Determining the ‘acceptable standards of performance’ for each service across the Environment and Regeneration Directorate.
· Identifying and collecting financial, performance and demand/need data on each service across the Environment and Regeneration Directorate.
· Analysing collected data to understand the relationship between ‘cost: performance: impact’ for each service across the Environment and Regeneration Directorate.
· Identifying options for improving efficiency for each service across the Environment and Regeneration Directorate through:
· collaboration
· out sourcing services
· introducing and/or increasing charges
· using grants strategically
· reducing activities to focus on core statutory and Corporate priority functions
Detailed Report
PURPOSE
1.1 / To provide Members with an update of the findings of the Wales Audit Office Service Based Budget Review, in Environmental Health, Housing and Waste Services.2. /
BACKGROUND
2.1 / Following the UK spending review in October 2010, councils in Wales had a £155 million reduction in their revenue funding from the Welsh Government in 2011-12.2.2 / The revenue funding from the Welsh Government will be around £283 million (seven percent) lower in 2013-14 than 2010-11.
2.3 / All councils in Wales have to make difficult decisions on how they deal with reductions in funding, which are impacting directly on local services and people.
2.4 / Councils are, therefore, under increasing pressure to reduce costs, but still have a duty to have arrangements to secure continuous improvement.
2.5 / The Welsh Government tasked the Wales Audit Office to review all Councils in Gwent to consider how well they are managing with less resources.
2.6 / The Wales Audit Office report also considers how the Councils in Gwent are reducing expenditure and delivering savings in specific services.
2.7 / In Blaenau Gwent the review focussed on three service areas – Environmental Health, Housing and Waste Services – to understand how well these individual services are planning and delivering savings.
3. /
PRESENT POSITION
3.1 / Environmental Health, Housing and Waste Management services have seen an increase in budget expenditure. In total, expenditure on these three services has increased from £7.2 million in 2008-09 to £9.364 million in 2012-13. This increase in expenditure is explained by general increases for inflation and central admin recharge levels increasing, particularly due to Housing Stock transfer in 2011.Environmental Health
3.2 / Environmental Health services have made savings mainly through reducing staff numbers and overall these changes equate to a 14 percent reduction in capacity.
3.3 / Further savings have been made by collaborating with other councils, for example by contracting out the animal health function to Powys County Council.
3.4 / The report recognises that Environmental Health services have developed a good working relationship within the five Gwent councils and Merthyr Tydfil. However, it is suggested that further collaboration could result in capacity being improved and overall there has been little consideration of other ways of delivering functions.
3.5 / The Wales Audit Office has praised the way in which Environmental Health has used resources strategically to continue to deliver its statutory responsibilities. In particular, the way it has changed working practices to free up staff capacity and redirect it to priority areas.
3.6 / The service could make more use of the Chartered Institute of Environmental Health Best Practice Standards, to monitor progress on the key Environmental Health functions and to manage service quality and performance.
3.7 / The performance of the Environmental Health service is summarised as mostly improving and is recognised as being comparatively strong within Gwent.
3.8 / The Wales Audit Office concludes that Environmental Health performance is mostly improving, but limited work has been undertaken on improving value for money and it is unclear if the service is sustainable in the long term.
Housing Service
3.9 / The Housing service has made savings through reducing staff numbers and overall this equates to a 14 percent reduction in capacity.
3.10 / The Wales Audit Office found that the Housing Service has not implemented and delivered significant changes to improve efficiency and value for money. No out sourcing of functions has taken place and there has been limited progress made within Gwent on integrating and collaborating on delivering housing services.
3.11 / The report recognises that positively, the service is collaborating with other landlords i.e. Hafod Housing Association and United Welsh. In each of the cases identified, it was anticipated that the work done would help to meet the increasing levels of homelessness. However, there is still an unacceptable level of unsuitable temporary accommodation being used.
3.12 / The report highlights where the Council could be using its resources more effectively with regard to ‘supporting people funding’ and states that this is a missed opportunity for making better use of Welsh Government funding.
3.13 / The Wales Audit Office found that the capacity within the Housing service is extremely limited and there is little opportunity to deliver more within the current staffing structure, without activity being stopped.
3.14 / The performance of the Housing service is summarised as mostly remaining stable, but pressures are growing and housing stress indicators suggest there is a growing unmet housing need in Blaenau Gwent.
3.15 / The amount of additional affordable housing provided in the Council has increased in recent years, rising from 70 units in 2008-09 to 122 units in 2011-12. However, projections show that the number of additional affordable units in the following years, 2012-13 and 2013-14, will reduce to 42 and 0 respectively.
3.16 / The Wales Audit Office concludes that Housing Services performance remains mixed and the lack of capacity and limited progress in improving efficiency and value for money, suggests that the service faces significant changes.
Waste Services
3.17 / Waste Services has also seen a reduction in staffing numbers of 8.8 percent.
3.18 / The report recognises that although the overall budget for Waste Services has increased, this has been to cover investment costs to comply with Welsh Government policy directives and the cost of dealing with the disposal of waste and recyclates. In addition, 2013-15 will see further budget pressures with the disposal of leachate costs predicted to rise to over £350,000.
3.19 / Waste Services has introduced a number of initiatives to reduce expenditure, although the success of this has been mixed.
3.20 / Discussions have taken place with Merthyr Tydfil County Borough Council via external consultants PeopleToo, on the opportunities for a joint service for waste, which could be led by Blaenau Gwent. In addition the service is undertaking a series of collaborative procurement projects in conjunction with neighbouring councils.
3.21 / Waste Services has identified future savings options however, at the time of writing this report these had not been agreed. The Wales Audit Office suggests more work needs to be undertaken to assess the impact of the proposed changes on the Council’s current performance and the sustainability of the service in the future.
3.22 / The Wales Audit Office recognises that managers in Waste use benchmarking data provided by the WLGA to compare costs with other councils and to monitor the effect of savings on the overall cost. However, there is limited use of the unit cost data and savings proposals to inform decisions on where savings need to be made and whether current services demonstrate value for money.
3.23 / The report highlights that the Waste Service faces some significant challenges in the future which could impact adversely on budgets, particularly if the service is required to change its kerbside collection practice to adhere to the Welsh Government preferred collection method.
3.24 / The performance of Waste management and recycling is summarised as improving, however, it does remain well below national and regional levels.
3.25 / The Wales Audit Office concludes that Waste Services are spending more and whilst improving from a low base, future savings will be difficult to deliver without performance declining.
4. /
OPTIONS FOR CONSIDERATION
4.1 / Based on the information in the Wales Audit Office report, there are a number of options that need consideration, across the Environment and Regeneration Directorate, as outlined below: -· Identify and agree the statutory and non-statutory requirements for each service;
· Determine the ‘acceptable standards of performance’ for each service;
· Identify and collect financial, performance and demand/need data on each service;
· Analyse collected data to understand the relationship between ‘cost: performance: impact’ for each service area;
· Identify options for improving efficiency for each service through:
Ø collaboration
Ø out sourcing services
Ø introducing and/or increasing charges
Ø using grants strategically
Ø reducing activities to focus on core statutory and Corporate priority functions
5. /
FINANCIAL IMPLICATIONS
5.1 / Service areas will need to improve service efficiency and value for money, to ensure they operate within current and future budgets. The Wales Audit Office recognises that the level of the Council’s Fund Reserves has declined substantially in recent years, resulting in a situation where it cannot be used to fund future overspends of Council services. Therefore, there is a need for a robust examination of service delivery options, to ensure the Council remains financially viable in the medium term.6. / RISK IMPLICATIONS
6.1 / There is a risk to the council that if services fail to improve service efficiency and value for money, service budgets will overspend, As already identified, there will be no facility within the Council’s budget to accommodate any future overspends to services.
The Wales Audit Office warns that reductions to budgets have to be done by an informed strategic approach that takes into consideration the strategic priorities, statutory responsibilities and the short to medium term challenges that it faces. Failure to do so will raise risks that services will become unsustainable and by default, the Council itself.
7. /
PERFORMANCE IMPLICATIONS
7.1 / The Wales Audit Office identified the need to vastly improve the management of performance, its link with financial strategies and impact on services delivered.Therefore, across the Directorate there is a need for a consistent Performance Management process to be implemented. As part of the process, acceptable standards of performance and the associated risks will be agreed for each service area that will be maintained and monitored.
Data will be collected and analysed appropriately, which will assist in understanding the relationship between ‘cost: performance: impact’ for each service area, as outlined by the Wales Audit Officer.
8. /
STAFFING IMPLICATIONS
8.1 / There are no current staffing implications in relation to this report.9. /
PROPOSALS
It is proposed that the Business Transformation and Development team in Environment and Regeneration work with Heads of Service to: -· Identify and agree what each service statutory and non-statutory requirements are;
· Determine the ‘acceptable standards of performance’ for each service;
· Identify and collect financial, performance and demand/need data on each service;
· Analyse collected data to understand the relationship between ‘cost: performance: impact’ for each service;
· Identify options for improving efficiency for each service through:
Ø collaboration
Ø out sourcing services
Ø introducing and/or increasing charges
Ø using grants strategically
Ø reducing activities to focus on core statutory and Corporate priority functions
10. /
SUPPORTING EVIDENCE
10.1 / The full Wales Audit Office Service Based Budget Review Report is included as an appendix to this report.11 / CONCLUSIONS
11.1 / In order to improve service efficiency and value for money across the Environment and Regeneration Directorate, the proposals for improvement by the Wales Audit Office in the Service Based Budget Review Report are to be supported.
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