2010 Elections impact/ramifications

1. 2010 Electionsimpact/ramifications The challenge of doing better for less in an era of public finance reductions London Policy Officers Network 9th July 2010 Hugh Grover Director Fair Funding

2. Enfield Barnet Harrow Haringey Waltham Forest Redbridge Havering Brent Camden Hillingdon Barking & Dagenham Hackney Islington Tower Hamlets Newham Ealing City of London Westminster Kensington & Chelsea Hammersmith and Fulham Southwark Greenwich Hounslow Bexley Lambeth Wandsworth Lewisham Richmond Merton Kingston Croydon Bromley Sutton Before

3. Enfield Barnet Harrow Haringey Waltham Forest Redbridge Havering Brent Camden Hillingdon Barking & Dagenham Hackney Islington Tower Hamlets Newham Ealing City of London Westminster Kensington & Chelsea Hammersmith and Fulham Southwark Greenwich Hounslow Bexley Lambeth Wandsworth Lewisham Richmond Merton Kingston Croydon Bromley Sutton After

4. First gusts of the new financial climate • Labour government March Budget 2010 - £45 billion forecast cuts • Clear deficit over two Parliaments • May 25th • in year £6.2 billion reductions, £1.165bn from local government • London boroughs £169m • £5.1m per borough • London government £355m • GLA £186m • June 17th Unfunded projects £2bn cancelled: • Net £1557m additional cuts • £8.5 billion projects suspended Front loading financial action

5. London’s Share of the £6.2bn

6. June 22nd Budget • Clear the deficit by May 6th 2015 • £61 billion cut 2010/11-2014/15 = 25% • NHS & Overseas Aid protected; • Recognise schools & defence • If 10% cuts then rest get 33% cuts • Non-protected services nearly 8% p.a. 2010/11 to 2014/15 • Benefits -£11 billion 2014/15 • HB, DLA, Child Benefit, Tax Credits • HB limit £400 per week • 2013 tougher rules for those out of work • Tax + £8 billion (=+£20bn - £12Bn) Tightest 4 year squeeze since 1976-1980 – tightest 5 years since records began

7. Impact of spending squeeze • London borough guesstimate • 25% 1800 staff per borough • 33% 2400 staff per borough • Capital spending • £41bn in 2010 - £23bn 2014/15 • Current plans = -44% • AME Spending (social security, debt etc.) • Social security +1.5% p.a. • Other AME +3.1% p.a. (includes council tax) Strategic changes to London public service essential to handle the squeeze in CSR

8. 20th October 2010: CSR Rules • Essential to meet priorities? • Government funding needed? • Substantial economic value? • Can it be targeted? • Lower cost? • Provided more effectively? • Provided by a non-state provider? • Outcome payments? • Can local bodies provide the activity? Reviews • Local Government Finance Review • Commission on long-term care • Review of sentencing policy • Review of the Housing Revenue Account • Review of the terms and conditions for police officer employment • Less a finance review more a reform of the State • “Re-think how government spends our money” • “Changing the shape of government”

9. There is some good news! Ring-fences removed except protected areas CAA gone! GoL gone and review of quangos Power of general competence Free care at home appears to be gone

10. More gain Council Tax Capping gone BUT power of veto freeze one year, possibly two Retention of growth? Business Rates Retention of growth? Discounts? Tax Increment Financing? Review of HRA Review of LGF – again!

11. Coalition Plans: Queen’s speech • Academies Bill • London Consultation • Decentralisation & Localism Bill • Health Bill • Energy Security & Green Economy Bill • Education & Children’s Bill • Police Reform & Social Responsibility Bill • Welfare Reform Bill • Public Bodies (Reform) Bill • Local Government Bill Moving towards new relationships between people, public service & Whitehall

12. Reshaping the State: Principles • Decentralisation • The nearer to people the decisions, the more they respond to people • Accountability • Need to know who is responsible • Transparency • The internet is like the printing press in 1440 giving power to all Methods • Individual choice • Health & schools • Payment for results • Offenders • Employment • Accountability closer to people • Public information • Elections & referenda The Conservatives have a theory for reform: it fits with their Coalition partners

13. Reasons to be cheerful • Two thirds Londoners believe their council is making a positive difference • 35% believe they can influence decisions locally • GCSEs 5+ up 2000-2008 up 40% • 45% - 64% • CAA one third of green flags in London • 6 of 14 top scores in London • 8 of top 10 children's services • Efficiency savings £1.2 billion (recurring) over five years • £393 million in 2008/09 London boroughs have a record of solving problems, engaging citizens & driving down costs

14. Deal delivery principles • No new costs & create space for savings • Better service design and quality • Encourage services tailored to individuals needs • Avoid re-organisation & mergers • Give people more power to shape decisions that affect them • Transfer responsibility for results from central to local government • Create financial incentives to drive innovation • Devolution • Partnership • Democracy and trust • Resources and risks Guiding the development of London local government approach to change

15. Future public service challenges Organisational listening Neighbourhood flexibility Strategic scrutiny Leadership & mobilisation Shared service management Partnership building Multi agency accountability Pro-active economic development Market development Performance management Financial management Risk management Closer to citizens Delivery through networks Managing uncertainty 21st century public service requires new skills that we must master

16. Traditional local government:Hierarchies and contracts PCT Private Contractor 3rd Sector Contractor

17. Emerging local government:Hubs and networks Public Private 3rd Public children elders LA LA 3rd Public LA Exec LA 3rd LA Public safety Private Public Private economy 3rd

18. End

19. Questions & Discussion