Derby City Council

Myth of the Council’s “statutory service” rhetoric

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Confused about what is / is not a statutory service?

Over the last few months the Council leadership has repeated the position that the Tory budget cuts have meant that, now, only statutory services can be supplied, and that all non-statutory activities have had to be scrapped. This has been mentioned many times at all of the Full Council, and Cabinet meetings since the Budget Consultation started in December.

The way it was presented was that there is a very clear definition of what constitutes “statutory”, and that one should be able to review that list and confirm that all funding was applied to those services only – perhaps I was looking at this too simplistically. But then the statement was being made in very clear terms.

I submitted a Freedom of Information request which asked the straightforward question:

For the 2016/17 Council budget can you confirm how much of the funding is being applied to non-statutory services? Please detail the non-statutory services funded and the amounts budgeted?

The answer ( my emphases)

The Council’s budgets are not aligned to statutory (laid down in statute) / non statutory services rather directorates and service areas. While spending reviews initially often start trying to establish a statutory / non statutory split this definition can prove unhelpful when trying to prioritise budgets.

In addition to statutory much of what the Council does is ‘mandatory’. If the Council did not perform certain mandatory functions, it would leave itself open to legal challenge – whether the function is laid down in statute or not. An example of this is some of the functions carried out by Human Resources. They may not be statutory activities, but their removal would have significant legal implications for the authority.

During the recent Medium Term Financial Planning exercise the Council did not separate services into statutory / non-statutory, but rather reviewed all services. The level to which statutory services is delivered can be changed and these are often areas of high spend.

I understand, and agree with, the example point about mandatory functions (overheads), like Human Resources, which are there to facilitate the delivery of the statutory service to the public and are therefore an integral part of the statutory service cost; this is something of a “red herring” in the answer. My expectation was that this statement would be much more “black and white”, and legally worded, in line with the rhetoric that has been communicated to the people of Derby.

It is clear that this is a “political” answer, and it is interesting that the last question has not been answered. Why? Because the budget has not been split into statutory / non-statutory.

So, when the Council next state that they have cut back to support ONLY statutory services, we know that that is a complete MYTH – the budget is not constructed that way!

POSTSCRIPT

The FOI team very helpfully also sent me some detailed budget documents by Directorate, which was enlightening on the overall finance of the Council.

TOTAL running costs of the Council £604m

FUNDED BY:
Schools Grant                    £218m
Other Income                    £ 90m
Council Tax                         £ 81m  (2015/16 £75m)
Housing Benefit                 £ 73m
Retained Business rates  £ 45m    (2015/16 £43m)
Specific Grants                 £ 44m
Revenue Support Grant £ 35m   
Business rates Top up    £ 13m
Other                                 £ 1m
From Reserves                £ 4m

This is the element that has been cut by Central Government  – 5% of the overall funding to the Council! (2015/16 – £45m) 

Note:

The Revenue Support Grant was cut by £10m, however, this is offset by the Council Tax increase of £6m, and the Retained Business Rates increase of £2m – leaving a small gap of £2m which is 0.3% of the total income – this can be easily managed by efficiency savings.

Why all the emotion about the consequences of the Central Government cuts you might ask?

 

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