## Leaders' Committee 10 December 2013: 11:30 Am

 At London Councils offices, 59½ Southwark St., London SE1 0AL 
Refreshments will be provided 
London Councils offices are wheelchair accessible 
 
Labour Group: 
Room 3 
10:00 
(Political Adviser: 07989 692873) 
Conservative Group: 
Room 1 
10:00 
(Political Adviser: 07976 712611 
Liberal Democrat Group: 
Members' Suite  
10:30 
(Political Adviser: 07940 502683 
Contact Officer: 
Derek Gadd 
Telephone and email: 
020 7934 9505 
 
derek.gadd@londoncouncils.gov.uk 

## Lunch Will Be Provided In Room  3 For Members After The Meeting

Agenda item 
Page 
1 
 
Declarations of Interest* 
 
2 
 
Minutes of the Leaders' Committee held on 12 November 2013 
1 
3 
 
Grants Programme 2013/15: Quarter Two Update Report 
 
4 
 
Pensions Working Group:  
 
Progress report and proposed next steps towards a London LGPS CIV 
5 
 
Growth Deal for London 
 
6 
 
Local Government Finance - key issues  
 
7 
 
Beyond 2011: future Census  
 
 
8 
 
Proposed Revenue Budget 2014 -15 and borough subscriptions and charges 2014/15 
9 
 
Progress against business plan targets:- 
 
- Transport and Environment   
- Grants 

10 
 
Minutes and summaries:- 
 

- Capital Ambition - 7 October 
- TEC Main - 24 October  
- Grants Committee - 6 November 
- TEC Exec - 14 November  
The following item is exempt from the Access to Information Regulations Local Government Act 1972 Schedule 12(a) (as amended) Section 3 Information relating to the financial or business affairs of any particular person (including the authority holding that information). 

 
Exempt Item  
Page 
E1 
Exempt section of the Capital Ambition Minutes on 7 October  
1 
E2 
Minutes of Exempt Capital Ambition Meeting on 15 October 
 

 

## *Declarations Of Interests

If you are present at a meeting of London Councils' or any of its associated joint committees or their sub-committees and you have a disclosable pecuniary interest* 
relating to any business that is or will be considered at the meeting you must not: 

- 
participate in any discussion of the business at the meeting, or if you become aware of your disclosable pecuniary interest during the meeting, participate 
further in any discussion of the business, or 
- 
participate in any vote taken on the matter at the meeting. 
 
These prohibitions apply to any form of participation, including speaking as a member of the public. It is a matter for each member to decide whether they should leave the room while an item that they have an interest in is being discussed.  In arriving at a decision as to whether to leave the room they may wish to have regard to their home authority's code of conduct and/or the Seven (Nolan) Principles of Public Life. *as defined by the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012 
London Councils Minutes of the London Councils Leaders' Committee held on 12 November 2013 
Mayor Jules Pipe chaired the meeting Present: BARKING AND DAGENHAM  
 
Cllr Rocky Gill 

| BARNET                                                  |     |                           |                   |                     | Cllr Richard Cornelius    |
|---------------------------------------------------------|-----|---------------------------|-------------------|---------------------|---------------------------|
| BEXLEY                                                  |     |                           |                   |                     | Cllr Teresa O'Neill       |
| BRENT                                                   |     |                           |                   |                     | Cllr Mohammed Butt        |
| BROMLEY                                                 |     |                           |                   |                     | Cllr Stephen Carr         |
| CAMDEN                                                  |     |                           |                   |                     | Cllr Pat Callaghan        |
| CROYDON                                                 |     |                           |                   |                     | Cllr Tim Pollard          |
| EALING                                                  |     |                           |                   |                     | Cllr Julian Bell          |
| ENFIELD                                                 |     |                           |                   |                     | Cllr Doug Taylor          |
| GREENWICH                                               |     |                           |                   | Cllr Peter Brooks   |                           |
| HACKNEY                                                 |     |                           |                   |                     | Mayor Jules Pipe          |
| HAMMERSMITH & FULHAM                                    |     | Cllr Nicholas Botterill   |                   |                     |                           |
| HARINGEY                                                |     |                           |                   |                     | Cllr Claire Kober         |
| HARROW                                                  |     |                           |                   |                     | Cllr Susan Hall           |
| HAVERING                                                |     |                           |                   |                     | Cllr Roger Ramsey         |
| HILLINGDON                                              |     |                           |                   | Cllr Ray Puddifoot  |                           |
| HOUNSLOW                                                |     |                           |                   | Cllr Colin Ellar    |                           |
| ISLINGTON                                               |     |                           |                   |                     | Cllr Richard Watts        |
| KENSINGTON & CHELSEA                                    |     | Cllr Nicholas Paget-Brown |                   |                     |                           |
| KINGSTON                                                |     |                           |                   |                     | Cllr Rolson Davies        |
| LAMBETH                                                 |     |                           |                   |                     | Cllr Lib Peck             |
| LEWISHAM                                                |     |                           |                   |                     | Mayor Sir Steve Bullock   |
| MERTON                                                  |     |                           |                   |                     | Cllr Stephen Alambritis   |
| NEWHAM                                                  |     |                           |                   |                     | Cllr Lester Hudson        |
| REDBRIDGE                                               |     |                           |                   | Cllr Keith Prince   |                           |
| RICHMOND UPON THAMES                                    |     | Cllr Lord True            |                   |                     |                           |
| SOUTHWARK                                               |     |                           |                   |                     | Cllr Peter John           |
| SUTTON                                                  |     |                           |                   |                     | Cllr Ruth Dombey          |
| TOWER HAMLETS                                           |     |                           |                   | Mayor Lutfur Rahman |                           |
| WALTHAM FOREST                                          |     |                           | Cllr Clyde Loakes |                     |                           |
| WANDSWORTH                                              |     |                           |                   | Cllr Ravi Govindia  |                           |
| WESTMINSTER                                             |     |                           |                   | Cllr Philippa Roe   |                           |
| CITY OF LONDON                                          |     |                           |                   | Mr Mark Boleat      |                           |
| LFEPA                                                   |     |                           |                   |                     |                           |
|                                                         |     |                           |                   |                     |                           |
|                                                         |     |                           |                   |                     |                           |
| Ex officio (under the provisions of Standing Order 2.3) |     |                           |                   |                     |                           |
|                                                         |     |                           |                   |                     |                           |
| GRANTS                                                  |     |                           |                   |                     | Cllr Paul McGlone         |
| TEC                                                     |     |                           |                   |                     |                           |
|                                                         |     |                           |                   |                     |                           |
| Ex officio (under the provisions of Standing Order 2.4) |     |                           |                   |                     |                           |
|                                                         |     |                           |                   |                     |                           |
| EQUALITIES                                              |     |                           |                   | Cllr Marie Pye      |                           |

 Apologies: BARKING AND DAGENHAM  
 
Cllr Liam Smith CROYDON 


Cllr Mike Fisher GREENWICH  


Cllr Chris Roberts HAVERING 


Cllr Michael White HOUNSLOW  


Cllr Jagdish Sharma KINGSTON 


Cllr Liz Green NEWHAM 


Mayor Sir Robin Wales WALTHAM FOREST  
 
 
Cllr Chris Robbins CAPITAL AMBITION  
 
 
Mr Edward Lord JP OBE CC Officers of London Councils were in attendance. 

## 1. Declarations Of Interest

No interests were declared. 

## 2. Minutes Of Leaders' Committee  Held On The 8 October 2013

The Chair said that London Councils' Meeting Dates for 2014 were agreed under item 10 of the minutes of the meeting on 8 October including the 8, 9 and 10 July 2014 for the AGMs of  Leaders' Committee, Grants and TEC respectively. However, these dates clashed with the LGA conference and it was proposed that these were changed to the 15, 16 and 17 July respectively, instead. Leaders' Committee agreed the change and agreed the minutes of the Leaders' Committee meeting held on 8 October 2013. 

## 3. Hiv Prevention

Cllr Teresa O'Neill (Conservative, Health, Bexley) introduced the paper saying: 

- 
In February London Councils and Directors of Public Health were commissioned to 
do some work on the commissioning of HIV prevention services.  That had been 
completed and, in the light of it, Leaders' Committee was being asked to decide 
whether there should be a pan-London programme as part of the response to HIV 
prevention, alongside locally commissioned services. 
 
- 
The recommendation in the paper was to agree a new, limited pan-London programme - covering communications, condom provision and some outreach work.   
 
- 
The programme would also provide a vehicle for seeking to influence other programmes - like the nearly £1m government funded HIV prevention work in 
London; and to jointly address on common issues like working with NHS England on 
how to increase testing in hospital settings. 
 
- 
Leaders' Committee was being asked to agree funding ceilings for the next 3 years - 
of £1.03 million, £1.2 million and £1.2 million - within which Directors of Public Health could undertake the detailed commissioning work.  Individual borough contributions 
to this joint programme were based on HIV prevalence and set out in the table 
attached as an annex to the report. 
 
- 
HIV diagnoses in London had risen in 2011-12 by 8% - the first rise since 2003.  
While the prevalence varied in different boroughs, all had at least pockets of HIV.  
The work commissioned last February to deliver a new needs assessment had 
already demonstrated that local government had quickly got a grip on a challenging 
agenda and was able to work together.  Agreeing this programme would build on this and support local activity to address this public health challenge. 
 
She concluded by seeking to amend the third bullet point of the recommendations to read as follows: 
 

- 
Agree a three year funding ceiling for this pan London programme of £1.03million in 
2014/15 and £1.2million in 2015/16 and 2016/17.The funding level for the final year 
of this three year programme would be reviewed in the light of the outcome of the 
anticipated 2015 Comprehensive Spending Review and the Local Government Settlement for 2016/17. The final costs within this ceiling would be determined 
through the commissioning process that would be overseen by boroughs and would 
ensure good value for money was secured and robust contract management put in 
place with clear review and break points. 

## Cllr Julian Bell (Labour, Ealing):

- 
Commended the report with the portfolio-holder's amended recommendations as a 
sensible way forward. 
- 
Pointed out that his party stressed that the £1.03 million programme this year was a 
ceiling and it may be that it would not be entirely reached. 
- 
Highlighted paragraph 19 of the report that indicated that officers would look at possibly extending current condom distribution and outreach work to cover the 
'interregnum' before new contracts were in place, and that this would be done within 
the overall ceiling for 2014/15. 
Cllr Ravi Govindia (Conservative, Adult Services, Wandsworth) proposed that data should be collected on how much individual boroughs spent on HIV prevention. 

Cllr Stephen Carr (Conservative, Bromley) advocated work to understand the reasons behind the growth in HIV in London. 

Leaders' Committee agreed the amended recommendations: 

- To note the key findings from the needs assessment that would be published on 12 
November and that all boroughs would be able to use as a starting point for future 
commissioning of HIV prevention services locally or in self-selecting partnerships. 
 
-  That, in addition to local commissioning, the councils in London should jointly 
commission parts of their HIV prevention activity.  This would be a new programme, covering particular services aimed at men who have sex with men, African communities and other high risk groups. The programme would also enable appropriate pan-London leadership and co-ordination, maximising influence with other nationally funded and NHS programmes and activity. 
- A three year funding ceiling for this pan London programme of £1.03million in 
2014/15 and £1.2million in 2015/16 and 2016/17. The funding level for the final year 
of this three year programme would be reviewed in the light of the outcome of the 
anticipated 2015 Comprehensive Spending Review and the Local Government Settlement for 2016/17. The final costs within this ceiling would be determined through the commissioning process that would be overseen by boroughs and would ensure good value for money was secured and robust contract management put in place with clear review and break points. 

## 4. Financial And Wider Devolution

The Chair introduced the item by thanking a number of members for their contribution to the development of this agenda in the past six months. He went on to say: 
 

- 
The Mayor of London and Chair of London Councils had written jointly to the 
Chancellor of the Exchequer formally seeking engagement in a dialogue on financial 
and wider devolution in the context of securing London's contribution to growth. 
- 
His reply indicated an interest in seeing the proposals as part of the Growth Deal process with boroughs working as part of the London Local Enterprise Partnership to 
steer this through.  
 
- 
Progress on a Growth Deal in 2014 was worthwhile and would also be a foundation 
for influencing the manifestos for all three main parties in a devolutionary direction 
ahead of the 2015 general election. 
 
- 
The basis of the deal in the two areas of Work, Skills and Welfare and Housing were 
set out in appendices to the report. 
 
- 
There would be variable geometry and geography in London about the issues on 
which various groupings of boroughs would work together on. Government and the Mayor, as well as all the front bench teams needed to be persuaded that the 
boroughs and borough groupings were fit for purpose. 
 
Cllr Peter John (Labour, Children's Services, Employment and Skills, Southwark): 

- 
Pointed out that Scotland, with a population of 5 million was voting next year on full 
independence, Wales with a population of 3 million on greater financial devolution and London's 8 million deserved greater devolution. - 
Argued that credibility may be added to London's case if progress could be made on the potentially difficult problem of determining the shape of borough combinations 
and perhaps a working party could be convened to look into it. 
 
Cllr Stephen Alambritis (Labour, Merton) agreed that greater cohesion and co-ordination would be needed. Cllr Richard Watts (Labour, Islington) agreed that London was behind some major northern cities on this agenda but that London Councils also needed to focus on some areas where immediate progress could be made, such as the Job Centre Plus's Flexible Support Fund as well as the broader strategic issues. 

Cllr Julian Bell cited the experience of the West London Alliance which had been positive in going forward on this topic. He went on to advocate arguing for the return of the New Homes Bonus's Top Slice from the LEP to borough groupings. 

Cllr Teresa O'Neill argued for building on the work of the London Finance Commission and mentioned the still unresolved question of governance. The Government could easily still just look to the Mayor of London and sub-regional partnerships needed to be discussed with the LEP. 

Cllr Philippa Roe saw a need for boroughs to prove they were mature enough to work together in groupings and to determine how greater devolution would be secured 

Cllr Rocky Gil (Labour, Barking and Dagenham) also cited generally supportive partnerships his borough were involved in and argued that the Mayor of London needed to do something about his land-holdings, 40% of which were in Barking and Dagenham.  

Cllr Ray Puddifoot (Conservative, Hillingdon) argued against getting into too much detail or arguing to give back the New Homes Bonus Top Slice to boroughs until the strategic position had been established. Leaders' Committee agreed to: 

- 
Endorse the broad approach to securing devolution, as agreed by the Congress 
Executive, including influencing strategy to advance the recommendations of the London Finance Commission; 
- 
Build on  Leaders' influence within the  London Enterprise Panel to advance opportunities for devolution to London through a Growth Deal, specifically in relation to the areas identified in appendices to this report; 
- 
Support the development of a more detailed and costed case, drawing on the expertise of officers in member authorities.    

## 5. Flood Risk Management

The Chair of TEC, Cllr Catherine West (Labour) introduced the item saying that London members formed a majority on the Thames Regional Flood and Coastal Committee (RFCC) and Leaders' Committee was being asked to give guidance to those members on how to vote on the 2014/15 flood levy proposals being decided at the RDCC's 20 November meeting between: 

- Option 1 - 5% increase on current contribution 
- Option 2 - 1.9% increase on current contribution 
- Option 3 - 0% increase on current contribution (RFCC recommendation). 
 Leaders' Committee agreed to advise the London members of the RFCC to support Option 3 a 0% increase or standstill budget. 

## 6. School Improvement And Place Planning

 
Cllr Peter John introduced the report saying: 

- 
A series of high-level meetings had been held during the first half of 2013 between 
the portfolio-holder for Children's Services, Employment and Skills with key 
stakeholders. This included meetings with:  
o Her Majesty's Chief Inspector (HMCI) of Schools Sir Michael Wilshaw 
o The Deputy Mayor for Education and Culture  
o The Rt Hon David Laws MP, Minister of State for Schools.  
o The Chief Executives, or their representatives, of a number of Academy chains. 
 
- 
Local government was engaged in a debate on the nature of councils' role in 
education. This debate reflected the radical changes which were occurring in education, which gave increased autonomy to schools, but decreased the powers and funding available to councils to discharge their duties. The question was what was the role of the council, and how could that role be achieved in the new education landscape? - 
Within the agreement which London Leaders reached in October 2012 was a call on government to bring forward policy changes to support local government's commitment to championing the interests of children and young people, to improve standards, to hold schools to account and ensure fair access. Key policy changes 
sought included: 
o The power to issue statutory early warning notices to academies and Free 
schools in the same way as councils do to maintained schools. 
o A change in Government policy to put new school applicants in touch with 
London boroughs at the earliest chance. - 
Stakeholders were overwhelmingly positive about Leaders' vision for the role of councils in education. 
 
- 
The view of stakeholders, including Ofsted, was that there was unlikely to be an 
appetite in government for legislation to confer the power on local authorities to serve 
notices on Free schools and academies but councils should use their soft powers of community leadership to place notices and copy in both OFSTED and the DfE. 
 
- 
Cllr John pointed to one example in London where the council  had set attainment 
expectations for its schools as an example of the approach of councils being visible 
in having high and challenging standards on educational achievement with all their 
schools and holding schools to account. 
- 
On Place-planning Cllr John referred to the Executive's suggestion of doing some work on where place-planning was working well and where it was working badly in order to put these to Government, supporting arguments about the location of Free 
Schools. 
- 
The need remained to argue for increased capital allocation to make up for the shortfall in school places. 
 
Cllr Rocky Gil underlined the need for more school's capital and did not feel that Free schools and academies were the answer in his borough, Barking and Dagenham where primary schools were five-form entry and secondary schools were twelve. Cllr Ravi Govindia reported that his borough's lead member on schools had commented that the proposed notices would have no teeth. He argued that relationship management was more important than the issue of notices. The Chair summed up by saying that the best arrangement certainly was a borough having a good relationship with every school in its area but the danger remained where a school that was achieving 60% 5 A-C grades at GCSE simply stated that it was better than the 30% it achieved ten years before when in reality it was still inadequate. A reserve sanction was needed that, although limited, could find a way of stimulating action in a failing school especially if made known to OFSTED and the DfE. Cllr Peter John concluded by saying that in addition to Leaders' current education policy there would be requirements on local authorities in education when DfE found itself unable to cotinine overseeing academies and free schools from Whitehall. Leaders' Committee agreed the actions identified to in the report as pan-London education policy: 

- To provide strong and visible leadership, councils should agree high and challenging 
expectations on educational achievement with all their schools and hold schools to 
account. 
- Councils should issue warning notices to academies and Free schools as they do for 
other schools, and a copy of that notice should be sent to Ofsted and the Department for Education 
- Councils should have a named contact for all individuals/groups interested in opening 
a new school in their area, though this should not override local determination of policy on new school commissioning. 

## 7. Approach To Revenue Budget 2014/15

The Chief Executive introduced the report saying it set out a proposed approach to the London Councils budget for 2014/15, the final year of the current three-year financial strategy. This approach was agreed by London Councils Executive at its meeting on 29 October 2013. Leaders' Committee agreed to note the approach to the London Councils budget for 2014/15, as agreed by the Executive on 29 October. 

## 8. London Councils Grants Scheme - Budget Proposals 2014/15

 
Cllr Paul McGlone Labour, Grants) introduced the report saying: 
 

- 
It represented the annual legal requirement to bring budget proposals to Leaders' Committee 
- 
It was the second year in a four year cycle and recommended a budget of £10m but £2m of that was for an ESF programme, half of which was paid for by the ESF so a 
total of £9m was required from boroughs. 
- 
The Grants Committee was keeping the budget under rigorous monitoring and the 
Leaders' Committee meeting on 10 December would receive the first six monthly 
monitoring report. 
 Cllr Rocky Gil appreciated the downward movement in the Grants budget but still saw little value for money for his borough. In addition, he was concerned at the £500,000 administration cost and would like to see its money returned to Barking and Dagenham, his borough so that, along with Havering and Redbridge, it could commission services on a subregional basis. The Leaders' Committee agreed: 

- 
an overall level of expenditure of £10 million for the Grants Scheme in 2014/15 (inclusive of £2 million gross ESF programme), the same level as the current year 
- 
that taking into account the application of £1 million ESF grant,   borough 
contributions for 2014/15 should be £9 million 
- 
that for 2014/15 only, a proposed transfer from Grants Committee reserves of £800,000 be made and returned to boroughs in the form of a one-off repayment; 
- 
that further to the recommendations above, constituent councils be informed of the Committee's recommendation and be reminded that further to the Order issued by the Secretary of State for the Environment under Section 48 (4A) of the Local 
Government Act 1985, if the constituent councils had not reached agreement by the two-thirds majority specified before 1 February 2014 they shall be deemed to have approved expenditure of an amount equal to the amount approved for the preceding 
financial year (i.e. £10 million); 
- 
that constituent councils be advised that the apportionment of contributions for 2014/15 would be based on the ONS mid-year population estimates for June 2012 
and that this methodology would also apply to the proposed one-off repayment of 
£800,000 for 2014/15; and 

- 
that subject to the approval of an overall level of expenditure, the Committee agreed to set aside a provision of £520,000 for costs incurred by London Councils in providing staff and other support services to ensure delivery of the Committee's 
"making of grants" responsibilities, including ESF administration of £120,000.  

## 9. London Councils Business Plan: Portfolio Holder Progress Reports

The Chair introduced the report saying that Cllr Chris Roberts (Labour, Growth and Regeneration, Greenwich) who would have introduced the item on Growth and Regeneration had been called to back to his borough and was unable to attend the meeting. 

Cllr Keith Prince (Conservative, Redbridge) suggested the Growth and Regeneration item be deferred until the portfolio-holder could be present but the Chair suggested that if Cllr Prince had any questions on it they could be raised under the meeting's minutes at the following meeting. Leaders' Committee agreed to note the portfolio-holders' reports. 

## 10. Minutes And Summaries

Leaders' Committee agreed to note the minutes and summaries  

- 
Grants Executive - 10 September 
- 
Audit Committee - 26 September 2013. 

## Action Points

 
Progress 
Item 
 
Action 
3. 
HIV Prevention 
PAPA H&AS 
- 
London Councils should collect data on how much individual boroughs spent on HIV prevention. Work has started on the development of the new London HIV 
- 
In addition to local commissioning, the councils in 
Prevention programme, in line with the decision 
of Leaders' Committee. This will pick up issues like data collection. 
London to jointly commission parts of their HIV prevention activity.  This would be a new programme, covering particular services aimed at men who have sex with men, African 
communities and other high risk groups. The programme would also enable appropriate pan- London leadership and co-ordination, maximising influence with other nationally funded and NHS programmes and activity. A three year funding 
ceiling for this pan London programme of £1.03million in 2014/15 and £1.2million in 2015/16 and 2016/17. 
 
- 
The funding level for the final year of this three year programme would be reviewed in the light of 
the outcome of the anticipated 2015 
Comprehensive Spending Review and the Local Government Settlement for 2016/17. The final costs within this ceiling would be determined through the commissioning process that would be overseen by boroughs and would ensure good value for money was secured and robust contract management put in place with clear review and break points. 
4. 
Financial and Wider Devolution  
PAPA SP 
- 
Pursue the broad approach to securing devolution, as agreed by the Congress Executive, including influencing strategy to advance the recommendations of the London Finance 
Commission 
- 
Build on  Leaders' influence within the  London Enterprise Panel to advance opportunities for 
devolution to London through a Growth Deal, specifically in relation to the areas identified in 
appendices to this report 
- 
Pursue the development of a more detailed and costed case, drawing on the expertise of officers in member authorities. Work is underway, as part of the City Centred Campaign Growth Deal will feature at LEP on 26 Nov 2013. Scoping initiated for detailed  case 
5. 
Flood Risk Management 
 
PAPA T&E 
- 
London members of the RFCC to be advised to 
support Option 3 a 0% increase or standstill 
budget. 
6. 
School Improvement and Place Planning 
London Councils pan-London education policy: 
PAPA CS CYP Team to 
 
- 
To provide strong and visible leadership, councils 
should agree high and challenging expectations on educational achievement with all their schools and hold schools to account. 
review how to monitor council impact 
resulting from policy additions.  
- 
Councils should issue warning notices to 
academies and Free schools as they do for other schools, and a copy of that notice should be sent to Ofsted and the Department for Education. 
 
- 
Councils need to create a process for strengthening the co-ordination of new school applicants so that the investment in these schools is directed to areas of most need. To do this, councils should have a named contact for all individuals/groups interested in opening a new school in their area, though this should not 
override local determination of policy on new school commissioning. 
 

## 8. London Councils Grants Scheme - Budget Proposals 2014/15

- 
The overall level of expenditure to be £10 million 
for the Grants Scheme in 2014/15 (inclusive of £2 million gross ESF programme), the same level as 
the current year 
- 
Taking into account the application of £1 million ESF grant,  borough contributions for 2014/15 to be £9 million 
- 
For 2014/15 only, a proposed transfer from Grants Committee reserves of £800,000 be made and returned to boroughs in the form of a one-off repayment 
- 
Constituent councils be informed of the 
Committee's recommendation and be reminded that further to the Order issued by the Secretary of State for the Environment under Section 48 (4A) of the Local Government Act 1985, if the constituent councils had not reached agreement by the two-thirds majority specified before 1 February 2014 they shall be deemed to have approved expenditure of an amount equal to the amount approved for the preceding financial year (i.e. £10 million) 
Grants 
Chief executive's circular went out on 22/11/2013 to all boroughs. Significant corresponden ce with borough officers requesting more information for committee 
reports. Officers will be tracking borough approvals, most of which will be made in December and January. 
- 
Constituent councils be advised that the apportionment of contributions for 2014/15 would be based on the ONS mid-year population estimates for June 2012 and that this methodology would also apply to the proposed one-off repayment of £800,000 for 2014/15 and 
- 
Subject to the approval of an overall level of 
expenditure, to set aside a provision of £520,000 
for costs incurred by London Councils in providing staff and other support services to ensure delivery of the Committee's "making of grants" responsibilities, including ESF 
administration of £120,000.  

 

# Leaders' Committee Item Grants Programme 2013/15: Quarter Two Update Report

Report by: 
Stephen Boon 
Job title: 
Head of Community Services 
and Grants 
Date: 
10 December 2013 
 

Contact Officer: 
Stephen Boon 
Telephone: 
020 7934 9511 **Email:** Stephen.boon@londoncouncils.gov.uk 


Summary This report provides an update of progress on the 2013-15 Grants Programme. It sets out achievements during the six months of the programme for the 35 commissions agreed at Grants Committee 20 February 2013. This report was originally provided to Grants Committee on 6 November and is being shared with Leaders' Committee as requested. 

 

## Recommendations Members Are Asked To:

1. **Note** the results of the Red Amber Green (RAG) risk rating 
and approve actions suggested by officers in this regard. 
2. **Note** provider progress against profile and approve actions 
proposed by officers and that as per paragraph 5 the number of red ratings has decreased from three (9%) in Q1 to zero in Q2. 
3. **Note** the following areas highlighted by the Chair of the 
Grants Committee: 
o No interventions regarding reductions in funding to 
organisations are recommended at this six month review stage; 
o Twenty-five monitoring visits had been conducted by 
the end of Q2, with three organisations to receive 
priority visits in Q3 (Hopscotch Asian Women's Centre - 25 November, Inclusion London - 13 
November, Age Concern - 29 November);. 
4. **Note** that the report is being shared with Leaders Committee 
following decisions made by members on future monitoring arrangements in early 2013.  

## 1 Introduction

1. This report covers the first six months' progress on the 2013-15 Grants Committee programme. It 
provides a summary of Q2 provider red, amber, green (RAG) risk ratings, an overview of delivery 
against targets under each of the four grants programme priorities, as well an update on the 
management and oversight of the programme. It looks forward to planned activities over the remainder of the year. 

## 2 Rag Risk Rating 2.1 How The Rag Is Used

2. The RAG risk rating system covers a number of elements of project delivery and has been 
designed to give the Grants Committee confidence that it has proper oversight of the grants 
awarded. It covers the following elements: - 
performance (delivery against target outcomes - 60% of total score); 
- 
quality (provider self-assessment and beneficiary satisfaction -  20% of total score); 
- 
compliance (timeliness and accuracy of reporting, responsiveness and the proactive management of risk - 20% of total score). 
 
3. The RAG ratings are applied in the following way: 
 
- Green >75 points 
- Amber 50-74 points 
- Red <50 points 
 
4. The RAG ratings are used by officers to assess the intensity of scrutiny and action they are 
required to undertake with providers. Members are asked to note that a red RAG rating does not signify that a commission should be terminated. However, it does indicate that officers are required 
to make specific recommendations to members on what actions are required with the provider.  

## 2.2 Q2 Ratings

5. Generally, the results of the RAG rating exercise carried out at the end of Q2 are encouraging. The 
number of green ratings has increased from 26 (74%) to 28 (80%) since Q1. The number of amber 
ratings has increased from six (17%) to seven (20%). However, the number of red ratings has 
decreased from three (9%) to zero. Full RAG risk ratings can be found at Appendix 1. 
 
6. Twenty-four of the 26 projects who were rated green in Q1 remained green in Q2. These were 
joined on green ratings by three projects that had been rated amber in Q1 (Women's Aid 
Federation (specification 2.3), Paddington Development Trust (specification 3.2), and Urban 
Futures (specification 3.2)) and one project that had been rated red (Women in Prison (specification 
2.2)). The remaining two of the three projects that had been rated red in Q1 (The Citizens Trust (specification 3.1a) and Women in Prison (specification 1.1)) both improved their ratings to amber. Therefore in total, six projects (17%) improved their RAG risk rating between Q1 and Q2. 7. Three projects that were rated amber in Q1 remained on amber in Q2. These were; St Mungo's 
(specifications 1.1 and 3.4) and London Training and Enterprise Network (specification 3.3). Officers have been in contact with these providers and proposed actions to improve their ratings 
are covered in Appendix 1. At this stage, officers do not recommend further action over and above 
that described. However, appropriate recommendations will be made to committee should this situation persist. 8. Two organisations that were rated green in Q1 have dipped to amber in Q2. These are Sign Health 
(specification 2.2 (sexual and domestic violence advice, counselling and drop in) - grant value £273,600) and Hopscotch Asian Women's Centre (specification 3.3 (women returning to the labour 
market) - contract value £376,040). 9. In the first of these cases, the provider only narrowly missed out on a green rating (0.52 points), 
scoring 74.48 out of 100. This was a result of fewer beneficiaries progressing through the project. 
The reason given by the provider is that it had worked with nine deaf women with complex needs including substance misuse and child protection issues. Delays of this nature are likely to have a larger impact on a project of this size, which is only due to work with 50 people over two years. Officers have discussed the extent to which the provider will be able to catch up and at this stage, 
Sign Health are confident that they will. No further action is recommended at this time. 10. Of slightly more concern is Hopscotch Asian Women's Centre. Their RAG risk rating score fell from 
80.91 in Q1 to 55.08 in Q2. The provider has suggested that it was unable to collect all of the outcomes evidence for Q2 and as a result is behind profile. Of particular concern are progressions 
into employment (6/28) and progressions into further education and training (13/36). In addition, officers have wider concerns about the accuracy of supporting information provided with the Q2 
return. An urgent progress review meeting has been scheduled for 25 November1. Officers will 
assess whether evidence collection is the only concern with the project. A performance improvement plan will be developed to address all issues identified. Further recommendations will be discussed with the chair following the meeting and communicated to committee with the Q3 
report.  

## 3 Q2 Performance Against Profile

11.  The following sections consider performance against profile at priority level, any suggested 
changes to provider contracts and a forward view.  
 
12. Performance data is presented in chart form by individual specification for each priority and 
aggregated at the priority level. The charts contain bars that represent profiled performance, actual performance and variance. These are supplemented with data tables that show variance against profile, the two year value of grants and the number of providers per specification. 
 
13. Members are asked to note that the performance data represents the number of beneficiaries that 
have received interventions against each of the primary outcome indicators for each specification. 
Therefore they are counting interventions. Beneficiaries may receive support against more than one 
primary outcome indicator. As a result, it is possible that the number of outcome indicators reported exceeds the number of individual beneficiaries. 14. Members are also asked to note that the number of priority outcomes per specification varies from 
three under priority four (providing support to London's voluntary and community organisations 
(VCOs)) to seven under priority two (sexual and domestic violence) specification two (advice, 
counselling, outreach and drop-in support for access to services). Furthermore, the timing of the delivery of outcomes indicators will also vary by specification, as does the total value of grants awarded by specification. 15. Finally, the data presented in this report has been produced within a short timescale to meet the 
committee reporting deadline - returns were submitted between 15 and 22 October. Therefore, 
officers have completed a review of primary outcome indicators only. In some instances, officers 
have requested further supporting information from providers. Where this is the case, unless the figures reported by providers were obviously incorrect, all reported primary outcomes have been used in compiling this report. Should adjustments need to be made at a later date, following clarification by providers, these will be reported to committee in the Q3 report.  

## 3.1 Priority 1 (Homelessness) Performance Against Profile

16. At its meeting 20 February 2013 Grants Committee agreed funding to eight organisations to deliver 
services that tackle homelessness. The total two-year value of commissions awarded against this 
specification is £5.54 million. Six commissions with a total value of £3.79 million are delivering against specification 1.1 (early intervention and prevention), one commission is delivering against each of the remaining specifications (1.2 youth homelessness (£1.46 million) and 1.3 support 
services to homelessness voluntary sector organisations (£0.3 million)). The following paragraphs 
provide high level detail regarding delivery against profile in Q2. 
 
17. Members are asked to note that this section of the report provides aggregate performance figures 
against profile to date for the primary outcomes against each of the specifications under priority 
one. The outcomes numbers for each of the specifications cannot always be directly compared. However, a full breakdown of outcomes and definitions by specification is provided at Appendix 2. The purpose of aggregating performance data in this way is to provide members with a high level picture of performance at priority level. A more detailed breakdown at provider level can be made available on request and some initial reflections on what can be inferred from the data are provided 
below. 
 

18. Q2 performance against profile is generally positive. To date, priority one providers are 11% ahead 
of aggregate profile as shown in Figure 1. Priority 1 Delivery against Profile (below).  
 

| 1.2 Youth                 | 1.3 Support    |
|---------------------------|----------------|
| 1.1                       | Total          |
| Services to               |                |
| Homelessness              | Homelessness   |
| and Early                 | Homelessness   |
| Intervention              |                |
| VCOs                      |                |
| Profile                   |                |
| 1,682                     |                |
| 1,416                     | 30             |
| 3,128                     |                |
| Actual                    |                |
| 1,947                     | 1,474          |
| Difference                |                |
| 265                       | 58             |
| 28                        |                |
| 351                       |                |
| Variance                  |                |
| 15.76%                    | 4.10%          |
| 2 yr Value of Grants (£m) |                |
| £3.79                     | £1.46          |
| No. Providers             |                |
| 6                         | 1              |

 19. Good performance can be observed across each of the specifications. Both 1.1 (early intervention 
and prevention) and 1.2 (youth homelessness) are largely in-line with what the grants team would consider normal levels of variance (+/-15%). Much of the over-performance in these specifications 
is attributed to high numbers of beneficiaries being provided life skills and employment and training opportunities.  
 
20. For example, Shelter, the largest grant recipient (£1.3 million) in priority 1.1 reported a three times 
as many people as profiled signing up to money management training sessions and 49% more people than profiled being given welfare benefit and debt advice. Anecdotally, officers believe that welfare reforms, particularly changes in housing benefit, may be driving changes in behaviour on the part of some beneficiaries. 
21. While providers to date are seeing higher numbers of people access the type of early interventions 
highlighted above, the numbers of people who are homeless or at risk of homelessness being assisted to obtain secure accommodation are largely in line with profile. There are a number of 
potential explanations for this, but two stand out. 22. First, that while numbers of people benefiting from early intervention measures is high, these 
measures are successfully stabilising people's immediate problems and could have lasting effects.  
 
23. Or second that providers and their partners are successfully working with borough colleagues to put 
in place additional short-term measures that act as a stop gap. One such example is the use of 
discretionary local authority housing funds to make up shortfalls in rent. 
 
24. While at this stage it is too early to say which of these scenarios is the most likely, there is certainly 
a lot of evidence to suggest that the second approach is prevalent. Indeed, this issue has come up at the London directors of housing group hosted by London Councils. It also featured in a piece in 
the Guardian w/b 21 October 2013 by Cllr Claire Kober, leader of Haringey Council and it has been reported to officers by providers. 25. Clearly, the two scenarios outlined above are not mutually exclusive. And certainly, stop gap 
measures used alongside early intervention to address skills and employment barriers could prove 
to be a very effective combination to help beneficiaries sustain accommodation in the longer term. However, such measures must be seen in the wider context, which includes minimal wage inflation and the rising cost of housing. As a result, commissioned organisations face a difficult challenge. Nevertheless, London Councils officers will be working with providers to ensure that the good 
progress seen against the early intervention measures, such as training and employment 
opportunities continues. 26. The levels of over-performance (+93%) seen in specification 1.3 (capacity building for the 
homelessness sector) seems very high. However, members are asked to note that the numbers of interventions profiled for this specification are low. As a result, a small increase or decrease in absolute numbers can have a big effect in percentage terms. 27. The provider under this specification, Homeless Link (awarded £299,070), has run a number of 
London-wide forums on homelessness, alcohol and drug misuse, and outreach management. In 
addition, it ran a good practice event on welfare reform. In total, there were 92 attendees across these activities. 28. Feedback from delegates has been good. Examples include "Great course and well delivered" 
(Barking and Dagenham Community Legal Advice Centre and CAB) and "It was great to meet you 
last week at the forum. I really enjoyed the discussion and felt I left with a much better 
understanding of the new changes. Thank you for putting together such a great event." (HOSB) 
29.  Homeless Link will be building on this through a training needs analysis of organisations within the 
sector. This information will be used to plan and deliver a range of activities that meet the needs of organisations. 

## 3.2 Priority 1 Suggested Contractual Changes

30. Officers do not recommend any changes to contracts. 

## 3.3 Forward View

31. The benefit cap began to be rolled out in October. As discussed in previous sections, those 
boroughs that piloted the scheme have had to make use of discretionary housing budgets as a means to prevent homelessness. Officers will continue to work with borough colleagues to assess 
the extent to which this becomes common practice. It will also work with providers to identify 
examples of good practice between homelessness charities and local authorities so that these can be shared more widely. 32. Officers will also provide the housing needs and homelessness network and London directors of 
housing with a relevant extract from this report. Feedback on the Q1 report was generally positive. Nevertheless, borough officers did request more detail in some areas and asked grants officers to 
remind providers of the need to maintain regular contact. However, Mark Meehan (LB Ealing), who 
chairs the housing needs and homelessness network, and with whom officers have liaised, reminded boroughs that they also had a responsibility to seek out information from the providers. 
Mark Meehan also attended the recent chair's visit to the *London Youth Gateway* project. 

## 4 Priority 2 (Sexual And Domestic Violence) 4.1 Priority 2 Performance Against Profile

33. At its meeting 20 February 2013 Grants Committee agreed funding totalling £6.81 million over two 
years to 11 organisations to deliver services that tackle sexual and domestic violence:  
- 
One commission is delivering against specification 2.1 (Prevention) (£0.4 million); 
- 
four commissions are delivering against specification 2.2 (Advice, counselling, outreach, 
drop-in and support for access to services) (£3.43 million); 
- 
one commission is delivering against specification 2.3 (Helpline and co-ordinated access to 
refuge provision) (£0.5 million); 
- 
two commissions are delivering against specification 2.4 (Emergency refuge accommodation that offers services to meet the needs of specific groups) (£1.23 million); 
- 
one commission is delivering against specification 2.5 (Support services to sexual and 
domestic violence voluntary sector organisations) (£0.61 million); 
- 
two commissions are delivering against specification 2.6 (Services targeted at combatting 
female genital mutilation, honour based violence, forced marriage and harmful practices) 
(£0.64 million).  
34. The following paragraphs provide high level detail regarding delivery against profile in Q2. 
Members are asked to note that this section of the report provides aggregate performance figures 
against profile to date for the primary outcomes against each of the specifications under Priority 2. 
The same rationale for presenting the information in this way and limitations regarding comparison 
apply as for Priority 1. However, a full breakdown of outcomes and definitions by specification is provided at Appendix 3. 

35. Aggregate performance for Priority 2 is 14% ahead of profile (see Figure 2. Priority 2 Delivery 
against Profile below). As noted in previous Committee meetings, many of the providers are 
working in large partnerships that were formed for the first time for the purpose of delivering this 
grant. As a result, there is a degree of variation within the aggregate figures both at the provider 
and specification level. The following paragraphs aim to explain the drivers of this variation in more 
detail. 
 
Number

| 2.1                      | 2.2 Advice,   | 2.3 Helpline   | 2.4 Specialist   | 2.5 Support   | 2.6 Harmful   | Total   |
|--------------------------|---------------|----------------|------------------|---------------|---------------|---------|
| Prevention               | counselling,  | and            | emergency        | services SDV  | practices     |         |
| outreach,                | coordinated   | refuge         | VCOs             | (FGM, HBV,    |               |         |
| drop-in                  | access to     | provision      | forced           |               |               |         |
| refuge                   | marriage and  |                |                  |               |               |         |
| provision                | other)        |                |                  |               |               |         |
| Profile                  |               |                |                  |               |               |         |
| 3,293                    | 8,219         | 283            | 68               | 102           | 288           | 12,253  |
| Actual                   |               |                |                  |               |               |         |
| 4,471                    | 8,104         | 332            | 152              | 198           | 672           | 13,929  |
| Difference               |               |                |                  |               |               |         |
| 1,178                    | -115          | 49             | 84               | 96            | 384           | 1,676   |
| Variance                 |               |                |                  |               |               |         |
| 36%                      | -1%           | 17%            | 124%             | 94%           | 133%          | 14%     |
| 2yr Value of Grants (£m) |               |                |                  |               |               |         |
| £0.40                    | £3.43         | £0.50          | £1.23            | £0.61         | £0.64         | £6.81   |
| No. Providers            |               |                |                  |               |               |         |
| 1                        |               |                |                  |               |               |         |
| 4                        |               |                |                  |               |               |         |
| 1                        | 2             | 1              | 2                | 11            |               |         |

 36.  The first thing to note is that specification 2.2 (advice, counselling, outreach, drop-in and support 

for access to services) has the highest number of individual beneficiaries profiled (8,219). The 
providers delivering against this specification also have the highest number of outcome indicators (seven). As a result, performance against target for the priority as a whole would ordinarily be driven by this one specification and in particular the project led by Solace Women's Aid, which includes 12 partners and the majority of funding (£2.7 million). However, in Q2 this is not the case. 
 

37. Members will notice the relatively high degree of correlation between actual and profiled figures in 
specification 2.2. This is a result of a re-profiling exercise carried out by Solace. As mentioned in 
the Q1 report, the partnership had initially found profiling across so many partners challenging. As a result, it was keen to use Q2 as an opportunity to re-assess based on the partners' actual 
experience of delivery. Officers are happy with the work done by Solace in this regard, but will continue to monitor progress closely to ensure that the revised profile is realistic and achievable. 38. Therefore in Q2, over-performance at the priority level is actually being driven by the other 
specifications. The following paragraphs will consider notable examples in more detail, particularly 
as the numbers point to unexpectedly high levels of over-performance. 39. Seventy per cent of the additional outcomes reported in priority two were by the provider under 
specification 2.1 (prevention), Tender Education and Arts (£399,730). When officers analysed the figures, it was clear that two outcome areas were driving this. First, the numbers of children and 
young people who can identify positive respectful relationships based on equal power and use this knowledge to make better choices. Second, the numbers of professionals who understand the 
facts, myths and risk factors relating to sexual and domestic violence (in particular issues that affect children and young people such as sexual exploitation, trafficking, FGM and sexual violence in gang settings) and feel able to address issues with children and young people. 40. Over-achievement in these areas is largely the result of one school requesting that Tender work 
with young people across four year groups (1,200 beneficiaries) and train the entire staffing team 
(140 people). The provision has been popular and feedback good, with one parent from a school in Barnet contacting Tender to say: 
 
"[…] my son attended one of your workshops at Compton school. Thank you for challenging teenage boys' assumptions about what's acceptable in relationships. He's always been taught violence against women is wrong, but I've noticed he's stopped using inappropriate slang." 

 41. Significant over-performance (+124%) can also be seen in specification 2.4 (emergency refuge 
provision). Members are asked to note two points. First, that the nature of the work undertaken by 
these providers (Ashiana Network (£900,000)) and Eaves Housing for Women (£325,900)) is intensive and therefore the numbers of beneficiary activities profiled are low (in the tens rather than the hundreds). As a result, the scope for significant percentage variation is greater. Second, as 
reported in Q1, both providers have suggested that changes in the wider environment are increasing the number of women who are accessing services. They cite the following factors: 
 
- 
Changes in the benefits system and in particular the way benefits are paid are increasing levels of sexual and domestic violence; 
- 
cuts in funding for the sector is reducing the amount of resource available and increasing pressure on those resources that currently operate. 
42. Ashiana Network has reported providing emergency accommodation for 17 women against a Q2 
target of six. Of these, 14 are making significant progress against permanent resettlement plans 
against (Q2 target of six). The picture is similar with Eaves Housing for Women providing 
emergency accommodation for six women against a Q2 target of two. However, Eaves have 
reported some difficulty with new accommodation they took on in July and staff time taken to resolve these issues has hampered progress with moving women on. Officers are monitoring this 
situation, but do not currently consider further action is required. 
 
43. The Women's Resource Centre (£608,000) providing support under specification 2.5 (capacity 
building for the sector) reported 94% over-performance against profile. The outcome against which 
this is most pronounced relates to the number of frontline providers able to deliver improved 
services to meet their clients' needs (deliver, monitor, evaluate and adapt) where 76 organisations achieved outcomes against a target of 12. 44. A range of activities were delivered, including (but not limited to): 
- 
A south east London borough surgery attended by 16 organisations which brought together delivery organisations, borough violence against women and girls co-ordinators and 
commissioners to look at how to deliver better services; 
- 
two expert-led training sessions on working with perpetrators of domestic violence attended 
by 37 organisations; 
- 
A-level 3 OCN accredited training course on working with people affected by sexual and domestic violence and problematic substance misuse attended by nine organisations.  
45. Finally, under specification 2.6 (harmful practices including honour based violence, forced marriage 
and female genital mutilation (FGM)) providers reported over-performance of 133%. One provider 
in particular, Asian Women's Resource Centre's *Ending Harmful Practices* project (£600,000) is delivering above expectations against two outcome measures. First, service users gaining improved self-esteem, confidence and emotional health and well-being (193 against a target of 15); 
and second, service users gaining a better understanding of the support options available to them 
and are more aware of their rights and entitlements (193 against a target of 13). 
 
46. The organisation has reported high numbers of women accessing FGM related services. Sixty-one 
women were supported on this issue and there have been particularly high levels of referrals from boroughs. This situation has been due in part to increased levels of attention within the media recently and also down to the fact that one of the partners involved in this project, Forward, had 
previously received Home Office funding to carry out work in this area. This funding ended in March 2013, however demand for services did not. Fortunately, the partner has been able to continue providing support in this area using London Councils' funding.  
47. Asian Women's Resource Centre and its partners have also been running a range of group and 
individual counselling sessions. Seventy-eight women have been supported through these to date 
(37 through counselling and 41 in group settings), with feedback showing a real impact on 
participants' emotional health and well-being. 

## 4.2 Priority 2 Suggested Contractual Changes

48. Officers do not recommend any changes to contracts. 
 

## 4.3 Work With Boroughs And Forward View

49. Officers have been working with the violence against women and girls (VAWG) co-ordinators 
group, hosted by the Mayor's Office for Policing and Crime (MOPAC), as well as on an ad-hoc 
basis with individual boroughs. Details of all the providers were shared with the VAWG coordinators following grant award and providers encouraged to make contact as well. 
 
50. In Q2, Solace informed officers of some difficulties it had experienced engaging with borough 
officers in Merton. On closer investigation, it became clear that Merton officers were concerned that 
the provider was not linked in to the borough's safeguarding hub and procedures and wanted to be 
sure that the services complemented local provision. As a result, grants officers arranged a meeting with the borough and provider. The meeting generally went well and a number of solutions to the issues were agreed, with the borough welcoming opportunities to use the Ascent partnership, led by Solace under specification 2.2 to add to local provision. 51. However, similar concerns were raised by borough officers from Sutton and Wandsworth at a 
recent VAWG co-ordinators meeting. This suggests that more work needs to be done in this area. Given the limited size of the grants team and the need to balance individual borough requests with the ability of funded organisations to deliver what could in effect become 33 individual borough 
projects, officers suggest the a three-pronged approach. The first two prongs have short to medium-term objectives, while the third has a slightly longer timescale. 52. First, officers propose to work with MOPAC and the VAWG co-ordinators group to run an event in 
late 2013/early 2014 to be attended by all providers delivering under priority two. This would give 
funded groups the opportunity to present their provision to borough officers and give borough officers the chance to outline their requirements to funded groups. The aim of this session would be 
to develop some common approaches as well as some more nuanced solutions that meet specific borough needs. 53. Second, officers will continue to offer ad hoc facilitation of relationships where particularly 
challenging issues emerge. So far, this approach seems to have worked in Merton and will be offered to Sutton and if necessary, Wandsworth. 54. Third, it has become clear that despite including VAWG co-ordinators in the consultation process 
for the current grants programme, a small number of borough officers do not feel that they had 
 
 
enough opportunity to influence the detail of the projects. As a result, officers suggest that any 
decisions regarding funding extensions for the 2015-17 programming period would be based on 
organisations' ability to deliver against revised specifications co-designed with the VAWG coordinators groups and approved by the Grants Committee2. 55. Officers are confident that measures one and two will ensure that the programme is flexible enough 
to take adapt to borough feedback, while continuing to meet its original aims and objectives in the short-term. While measure three will allow a more thorough review in the medium-term.  
 

## 5 Priority 3 (Poverty) 5.1 Priority 3 Background Information

56.  At its meeting 20 February 2013 Grants Committee agreed  funding of £3.76 million (includes 50% 
ESF match funding)  to 10 organisations to deliver services that tackle poverty:  
- 
One commission is delivering against specification 3.1a (disabled parents) (£0.38 million) 
- 
one commission is delivering against specification 3.1b (people with mental health needs) (£0.38 million) 
- 
three commissions are delivering against specification 3.2 (people from ethnic groups with low labour market participation rates) (£1.13 million) 
- 
four commissions are delivering against specification 3.3 (women facing barriers to employment) (£1.5 million) 
- 
one commission is delivering against specification 3.4 (people recovering from drug and alcohol misuse) (£0.38 million). 
 
57. In preparation for the current round of funding, members asked officers to undertake some 
benchmarking work to ensure that London Councils' ESF activities provide good value for money and effectiveness compared to other similar programmes.  
 
58. With regard to effectiveness, for ESF programmes covering the first half of the 2007-13 ESF 
programming period, London Councils' providers placed 23% of people leaving the scheme in a job and 13% of leavers sustained employment for six months. Six month sustainment figures for the GLA and Skills Funding Agency (SFA) were 13% and 3% respectively for the same period (ESF 
Co-financing Organisation (CFO) group performance and expenditure reports August 2012). 59. For the 2013-15 period, London Councils has set a more challenging target of 16% for the 
achievement of six-month sustained employment outcomes. The 10 funded commissions under this priority have indicated that they will be able to meet this challenge and if successful, will contribute to reducing the unit cost of these outcomes from the average of £22,000 on previous London 
Councils ESF provision to £7,500. For comparison, the average cost of each outcome for the GLA 
programmes has been £14,000 and for the SFA, £28,0003. 

## 5.2 Priority 3 Performance Against Profile

60. The following paragraphs provide high level detail regarding delivery against profile in Q2 and 
comparison against Q1. Unlike previous priorities, the outcome measures for each of the 
specifications in priority three are directly comparable, as they are consistent for all contracts. 
Therefore, two charts are provided (below), one which shows performance by specification (Figure 
3. Priority 3 Delivery against Profile (Specification)), the other which shows delivery against 
outcome indicator type (**Error! Reference source not found.**). A full breakdown of performance by 
specification is also provided at Appendix 4. 

## Number

3.1b people with
| 3.3 women facing         | 3.4 people recovering   |
|--------------------------|-------------------------|
| Total                    |                         |
| mental health needs      | barriers to             |
| 3.2 people from ethnic   |                         |
| groups with low labour   |                         |
| misuse                   |                         |
| market participation     | employment              |
| rates                    |                         |
| Profile                  |                         |
| 82                       | 145                     |
| Actual                   |                         |
| 82                       |                         |
| 142                      | 316                     |
| 616                      |                         |
| 46                       | 1202                    |
| Difference               |                         |
| 0                        |                         |
| -3                       | 27                      |
| -183                     |                         |
| -10                      | -169                    |
| Variance                 |                         |
| 0%                       | -2%                     |
| 2yr Value of Grants (£m) |                         |
| £0.38                    | £0.38                   |
| No. Providers            |                         |
| 1                        | 1                       |

## 5.2.1 Priority 3 Performance Against Profile (Specification Level)

61. Aggregate performance for priority three is slightly (12%) behind profile; an improvement of two 
percentage points against Q1. The largest part of this under-performance is being driven by the delivery against profile in two specifications; 3.3 (women facing barriers to employment) and 3.4 (people recovering from drug and alcohol abuse). This is reflected in the amber RAG risk ratings for Hopscotch Asian Women's Centre (3.3) and LTEN (3.3) and St Mungo's (3.4).  
                                               
 
3 3 The benchmark unit costs were worked out by taking programme expenditure at the time of the programme launch 
(August 2012) and dividing it by the number of six month sustained jobs that had been delivered. For the SFA, this exercise resulted in a unit cost of £27,680.05: For the GLA, it resulted in a unit cost of £14,212.13. NB the figures used here represent a snapshot of performance at August 2012 and these may have subsequently changed.  

 

62. Hopscotch Asian Women's Centre (3.3 - contract value £376,040) has reported to officers 
problems in obtaining evidence of delivery from partners and as a result has under reported. This is particularly pronounced against the employment within 13 weeks of leaving outcome, where the 
provider is 22 behind profile. This situation explains the majority of under delivery in this area at the programme level (currently 28 (16%) behind profile). 63. Officers will be visiting the provider in November to review performance and administrative 
systems, as they have wider concerns firstly, about the time taken for the provider to report and secondly, the quality and accuracy of the data and evidence received for Q2. Following this 
meeting, the provider will be asked to produce a performance improvement plan. Officers will continue to monitor the situation closely and will make any necessary recommendations to 
committee following the submission of Q3 reports. 64. Officers have investigated causes of poor performance by London Training and Employment 
Network (LTEN) (specification 3.3 - contract value £376,040). The provider has developed good 
links with employers in the health and social care field and is currently two ahead of target for job 
starts.  However, has suggested that work placements (four behind profile) are taking longer to come through than anticipated. LTEN has indicated that in large part, the reason for this delay is the time taken to obtain the criminal records checks required by employers in this sector. 65. They have also pointed to reluctance on the part of their partners to move people into further 
education and training (18 behind profile - 31% of the total underperformance at the programme 
level) as they are keen to prioritise employment outcomes4, which can take longer for their 
participants achieve. Despite these issues, the provider believes it will be able to meet its lifetime targets. London Councils officers have requested that LTEN re-profile delivery to better reflect 
timing of outcomes. Officers will continue to monitor the situation closely and will make any necessary recommendations to committee following the submission of Q3 reports. 66. Officers have also been in close communication with St Mungo's (specification 3.3 - contract value 
£376,040) to assess reasons for underperformance. Of particular concern is the number of people undertaking work placements (five delivered against a target of 15). St Mungo's are taking the following actions to address this issue. First, they have recently reached agreement with six law firms to provide work placements for their beneficiaries. Second, they will be creating internal volunteering opportunities. Third, the staff member responsible for this element of delivery has 
been set weekly targets which will be monitored closely by the project manager going forward. Officers will maintain contact with the provider and should things not improve will make further 
recommendations to committee as appropriate.  
67. Secondary areas of slight underperformance include job entry (six against a target of eight) and 
work placements (eight against a target of 10). In the first area, St Mungo's does not consider this a 
significant problem and has confirmed that it is aware of five additional job starts in Q2 for which it is awaiting participant signature on the evidence templates. On the second area, feedback is 
consistent with that provided by LTEN (and other providers), who would prefer to hold on to participants and where appropriate exhaust avenues into employment before referring to further education and training. Officers will continue to keep this under review and where appropriate request re-profiling of this outcome.  

## Priority 3 Performance Against Profile (Output And Outcome Level)

| Completing       | Sustaining      | Grand Total      |
|------------------|-----------------|------------------|
| 6+ hours of one- | Gaining         | Progression into |
| to-one support   | Employment      | education or     |
| Work or          | employment for  |                  |
| Volunteering     | within 13 weeks | 26 weeks         |
| placement        |                 |                  |
| of leaving       |                 |                  |
| Profile          |                 |                  |
| 866              | 191             | 180              |
| Actual           |                 |                  |
| 825              | 150             | 152              |
| Difference       |                 |                  |
| -41              | -41             | -28              |
| Variance         |                 |                  |
| -5%              | -21%            | -16%             |

68. Analysis of aggregate performance against target for each of the outputs and outcomes reveals 
some interesting trends. Two areas of the programme are largely on track. The number of people receiving six hours of support is generally in line with profile (-5%). And the under delivery of job entries (-16% (28 fewer than profiled)) can be largely explained by the poor performance against 
target of Hopscotch Asian Women's Centre (-22 jobs) in specification 3.3. Of the remaining nine providers, five are on or exceeding profile and four are within acceptable tolerance levels for this outcome. 
69. However, there are two areas where divergence against profile is more pronounced; delivery of 
work placements (-21%), and referrals into further education and training (-44%). Anecdotal 
feedback from providers suggests that for some participants, welfare reforms are having an impact on their desire to undertake work placements and that they are prioritising paid employment.  
Officers have also been told that providers are keen to maximise the numbers of people entering employment in preference to referring to further education and training. 70. Officers have not yet had the opportunity to test these assertions, which came through with the Q2 
claims. However, the ESF team believes that one way to address underperformance in these areas would be to offer increased flexibility to providers in regard to contracted outcomes and results. Specifically, where a provider felt that it could deliver more jobs and six months sustained 
employment outcomes, contract managers should have the flexibility to reduce the numbers of 
work placements and further education and training outcomes, transfer the funding associated with these into jobs and six month sustained employment and increase the numbers of these outcomes accordingly. 71. Members are asked to note the following when considering whether or not to give approval to this 
approach. First, it has already been taken with one provider, Redbridge CVS, with the approval of the chair, so a precedent exists (as set out in table 1 below).  

## Table 1. Redbridge Cvs Contractual Changes

|             | 6+ hrs of    |
|-------------|--------------|
| support     |              |
| Work        |              |
| placement   |              |
| Sustaining  |              |
| employment  |              |
| Final       |              |
| Evaluation  |              |
| Gaining     |              |
| Employment  |              |
| 13 weeks    |              |
| Further     |              |
| Education   |              |
| or Training |              |
| Original    | 307          |
| Revised     | 307          |
| n/a         | -26          |
| Variance    |              |
| £0          | -£9,100      |
| Variance    |              |
|             |              |

 72. Second, job outcomes and sustained employment outcomes have a higher unit cost value (ESF 
works on payment by results) than work placements and referrals to further education and training. 
As a result, were this option exercised, it would reduce the total number of outcomes delivered by the programme, but buy more outcomes with a higher value to the tax payer. Third, it would allow officers to respond quickly to emerging trends. 

## 5.2 Priority 3 Suggested Contractual Changes

73. There are no suggested contractual changes. However, officers request permission to make 
changes to contracts in the way outlined above. 
 

## 5.3 Forward View

74. The quarter leading up to Christmas tends to be a time of increased recruitment activity, particularly 
for employers in the retail and hospitality sectors. As both industries offer a good entry route into the labour market, officers expect to see a significant uplift in the numbers of employment outcomes reported at the end of Q3. The benefit cap roll-out began this month. Officers will report 
back at the next committee with an assessment of the extent to which this appears to have impacted on the numbers of people enrolled on the programme. 75. Officers will be sharing the results of Q2 with the Heads of Regeneration group hosted by London 
Councils. Borough officers will be encouraged to provide feedback on their experience and knowledge of how the providers are operating in their area. No gaps in service were identified by borough officers in the previous quarter. However, where gaps emerge, London Councils officers 
will work with providers to fill them. 

## 5.4 Wider London Councils Esf Programme

76. The poverty strand of the grants programme forms part of the wider London Councils ESF 
programme, which provides individual boroughs the opportunity to draw down ESF to increase the 
value of local employment schemes5. This section of the report provides members with additional 
information on progress as well as comparison with similar schemes across London and England. 
 
77. Since 2008, 22,713 individuals have been supported by London Councils' ESF programmes (an 
increase of 2,034 since the Q1 report). These programmes work in large part with people furthest 
from the labour market. Figure 5. Comparative ESF Performance (London Councils, London 
and England) (below) compares London Councils' performance against three key comparable 
indicators for London and England6 regarding the type of beneficiaries supported; a) unemployed, 
b) economically inactive and c) the percentage of people who move into employment . 
 
 
78. The first two sets of columns in Figure 5 give an indication of the distance from the labour market 
of people who are supported by the respective programmes. Unemployed people tend to be closer to the labour market and claim jobseekers allowance and in theory easier to move into employment. Economically inactive people, claim other key benefits such as employment support allowance (current), incapacity benefit and income support (historic) and tend to be harder to move into employment. 
  

79. As the chart shows, 66% of people supported by London Councils ESF programmes are 
economically inactive (furthest from the labour market) compared with a London average for all ESF co-financers of 16% and an England average of 15%. 80. In this context, London Councils' performance of 27% into employment (up one percentage point 
since last quarter), compared with a London average for all ESF co-financers of 16% and an 
England average of 15% is particularly strong (GLA European Programmes Management Unit August 2013). London Councils continues to build on this success and has set progressively harder output measures for its programmes. By 2015, when the current ESF programming period comes to an end, London Councils aims to ensure that 33% of those supported by the programme have found work. 

## 6 Priority 4 (Capacity Building) 6.1 Priority 4 Performance Against Profile

81. At its meeting 20 February 2013 Grants Committee agreed funding of £2.66 million over two years 
to six projects to deliver services that support London's voluntary and community sector 
organisations and enable them to access funds and improve skills and resources to provide effective services to communities. 
82. Like priority three (poverty), all of the primary outcomes are directly comparable. Therefore, two 
charts are provided (below), one which shows performance by specification (Figure 6. Priority 4: 
Delivery against Profile (Specification Level)), the other which shows delivery against outcome 
indicator type (Figure 7. Priority 4 Delivery against Profile (Primary Outcome Indicators)). 
Members are asked to note that the figures provided below refer to number of organisations supported, rather than individuals. 
 

Total
490
Actual
487
Difference
-3
Variance
-1%
2yr Value of Grants (£m)
£2.66
No. Providers
6

83. In Q1, providers reported under-performance of 2%. As shown in Figure 6 and Figure 7(below) 
this has begun to be turned around in Q2, and officers are now able to present to members underperformance of 1%. Members are asked to note that two providers (Inclusion London - £560,000 and Age Concern - £310,154) did report numbers that would have significantly improved this 
 
 
picture. Had officers included all of the outcomes reported in this paper, over-performance would have been pushed to 71% above target.  

 84. The reasons for excluding some (Inclusion London) or all (Age Concern) of the outcomes claimed 
by these organisations from this report are similar. In neither case, did officers consider that the 
numbers reported could be presented to committee without challenge. 85. In the case of Inclusion London, it suggested that 160 organisations in Q2 had developed improved 
business acumen and ability to deliver effective services and respond to changing legal/policy external environment increased, through business, organisational development and disability policy 
information and support.  
 
86. However, when officers compared the activities described by the provider in its narrative report and 
the numbers detailed in the reporting database, it appeared the numbers reported reflected the quantum of e-bulletins that had been sent out to organisations in its network. Officers did not consider that receipt of an e-bulletin could be used to demonstrate the outcome. As a result, these 
figures were not included. 87. In the case of Age Concern, the numbers reported appeared to be based on the number of 
organisations that had attended training sessions on a variety of topics. And while officers could see evidence that the topics were of use e.g. working in partnership to reduce costs, and increasing 
presence through the use of social media, it was not clear whether attendees had reported to Age Concern that they had had a positive impact that would improve their efficiency and effectiveness. 88. In neither case do officers consider that this is an attempt on behalf of the organisation to mislead 
committee. And in both cases, the providers have suggested that they do carry out annual surveys 
of beneficiaries. Nevertheless, officers have requested that the providers give further information to 
support their claims7. A visit to Inclusion London has been scheduled for 13 November and a visit 
to Age Concern planned for February has been brought forward to 29 November. Officers will use 
these as an opportunity to assess standards of evidence collection more generally and re-enforce 
expectations. Committee will be provided with an update in Q3.     
                                               
 
7 Officers would expect to see evidence from the recipients of the e-bulletin and workshop attendees that they had developed improved business acumen and an ability to deliver more effective and efficient services as a result of the services received. 


Equalities
Total
Services
Profile
173
129
188
490
Actual
187
180
120
487
Difference
14
51
-68
-3
Variance
8%
40%
-36%
-1%

 

89. Despite a certain over-eagerness on the part of some organisations to claim results Figure 7 
(above) shows that good progress is being made against two of the outcomes for priority four. 
Good performance by London Voluntary Services Council (£735,328) under the effective and 
efficient services outcome (142 against a profile of 100) more than made up for the shortfall caused 
by the exclusion of the results for Inclusion London and Age UK. 
 

90. During the period, LVSC and its partners delivered a number of activities that contributed to 
achieving this outcome. These included (but were not limited to): 
 
- 
LVSC supporting 37 organisations with HR advice; 
- 
ROTA providing train the trainer workshops on the 2010 Equalities Act for 26 organisations; 
- 
Lasa supplying 16 organisations with support on effectively managing ICT; 
 

91. Providers have turned around the slight under-performance (-1%) covered in last quarter's report 
and are now 40% ahead of target. This is largely due to two providers, Children England (£425,898) and Inclusion London (£560,000) who achieved 21 outcomes against a target of 0 and 38 outcomes against a target of 21 respectively. Officers have included figures for Inclusion London 
as they provided information about levels of participant feedback that suggests impact was measured and demonstrated.  
 

92. The reason for poor performance against the final outcome indicator was the exclusion of Age 
Concern's figures from the quarterly report. Had these been included, providers would have been on target for this particular measure. Officers would like to refer members to paragraph 88 
regarding suggested next steps. 

## 6.2 Priority 4 Suggested Contractual Changes

93. Officers do not recommend any changes to contracts. 

## 6.3 Forward View

94. Officers can now confirm that the event on managing large partnerships mentioned in the Q1 report 
and responding to a point made by Cllr Millbank at the July AGM has now been booked for 12 November.  
 
95. Officers continue to work with borough officers to cross-check against their experience on the 
ground. This process will be undertaken through the Borough Grants Officers Group, whose next meeting will take place on 31 October led by their new chair Claire Thompson (LB Havering). 

## 7 London Funders

96. London Funders is the umbrella body of grant funders in London. It brings together public sector, 
independent foundations and corporate givers. Each year, the London Councils Grants Committee 
pays £60,000 in subscriptions on behalf of London boroughs. As well as providing a £14,800 saving to local government in London, the subscriptions pay for a range of services open to local authority 
staff. The following paragraphs cover what has been delivered by London funders during 2013 and 
highlight some changes that have been taking place within the organisation. 

## 7.1 About London Funders

97. London Funders brings together a range of funders with the aim of sharing knowledge, developing 
best practice, improving efficiency and increasing the leverage of funding. Working on a cross sector basis, it provides a space for local government funders to enter into dialogue with their counterparts in independent foundations, livery companies, social investors, corporates and philanthropists. London Funders mission has been to strengthen and support funders to better meet the needs of Londoners. 
98. Over the past 15 years, it has grown from an informal grouping of a few key London organisations 
into an independent registered charity with a membership of over 90 organisations. London Councils has been an instrumental part of this change. However, in recent years the Grants 
Committee has not received regular updates on activities undertaken by London Funders nor the extent to which boroughs are making use of their membership. The new director of London Funders 
has undertaken to reverse this situation. 

99. In September 2013, David Warner replaced Gaynor Humphreys as director and has taken control 
of day to day operations. He is being supported in his work by a new executive assistant, Becky Green. Alongside these changes, a number of new board members were elected. The 14 person 
board has good local authority officer representation, with five members8. It met on 22 October to 
refresh the organisation's mission and begin business planning for 2014. One of the key themes covered was the need for London Funders to demonstrate the outcomes of its work. An update will 
be provided to the March 2014 Grants Committee. 
 

## 7.2 Activities Undertaken In 2013

100. 
London Funders has undertaken / planned a range of activities on a range of themes including: 
a. Funder Forums 
i. Supplementary education (January) 
ii. Asylum and migration (March) 
iii. Squeezing the lemon or tending the orchard: How funders are meeting financial 
challenges (March) 
iv. Understanding insolvency: Practical lessons for funders (May) 
v. AGM (June)  
b. Joint Events 
i. Localisation of the Social Fund: Countdown to change (February) 
ii. Youth Work Works? (September) 
iii. Demystifying Destitution (October) 
iv. Impact of Localisation of the Social Fund: Six months on (October) 
v. Social Policy in a Cold Climate (December) 
c. Learning Opportunities 
i. Are you still receiving fewer applications than you were expecting? (March) 
ii. Support in a Challenging Climate  (September) 
iii. Funding Partnerships and Consortia: Benefits and Challenges for the Funder 
(November) 
d. Project groups 
i. Research and Evaluation (February, May, September, and November) 
ii. Unlocking Assets (March, June and October) 
 

101. 
London Councils and boroughs have had a role in shaping these events. Two areas of work 
have been developed at London Councils' request. Firstly, an area of work on advice services is being developed. London Funders is a member of the Trusts and City Law Firms Network for Advice (TCLFN), and has been active within this forum in highlighting the particular issues facing advice services in London. London Funders has also worked alongside other funders through the network to identify new ways of working and resourcing to provide practical support to the not-for-
                                               
 
8 London Borough of Barking and Dagenham (Monica Needs), London Borough of Camden (Alice Wallace), Royal Borough of Greenwich (Gulten Fedayi), London Borough of Sutton (Victoria Lawson), and London Councils (Stephen Boon).   
 
 
profit legal advice sector. For example two of its members (Trust for London and City Bridge Trust) 
are currently working with London Legal Support Trust on funding plans for advice services in London. 

 

102. 
Secondly, the learning event on partnerships and consortia (benefits and challenges for the 
funder) is being undertaken following identification of this as an issue by London Councils. 

## 7.3 Borough Involvement In 2013

103. 
London boroughs have made up a significant proportion of attendees at London Funders 
events. 133 (28%) of the 480 attendees were from boroughs. This number (133) comprised 85 
individuals from 25 local authorities9. The following events received particularly high numbers of 
borough delegates. 

## Table 2. London Funders Events With Good Borough Representation 2013

| Event                                       | Total     | Borough    |   Number of  |
|---------------------------------------------|-----------|------------|--------------|
| attendees                                   | Attendees | boroughs   |              |
| represented                                 |           |            |              |
| Supplementary Education                     | 53        | 12         |           9  |
| Localisation of the Social Fund             | 59        | 14         |          13  |
| Unlocking Assets Group (March)              | 15        | 10         |           7  |
| Squeezing the Lemon, Or Tending the Orchard | 51        | 21         |          12  |
| Understanding Insolvency                    | 29        | 11         |          11  |
| Unlocking Assets Group (June)               | 20        | 14         |          11  |
| AGM                                         | 62        | 12         |          11  |
|                                             |           |            |              |
|                                             |           |            |              |

104. 
London Funders would like to encourage officers from those boroughs who have not yet 
attended to make use of its services in the future. Details of future activities can be found on the 
London Funders website http://www.londonfunders.org.uk/home .   

## 8 Management And Oversight

105. 
This section considers the grants team's progress in the management and oversight of the 
programme. 
 
106. 
The new monitoring approach agreed at the 20 February 2013 Grants Committee meeting is 
bedding in. Since April, the grants team's business plan includes specific productivity and 
performance measures for providers and officers that are directly linked to the commissioning 
monitoring approach approved in February. The relevant measures and progress towards these are highlighted in the following sections of this report.  

## 8.1 Provider Returns

107. 
The team has been set a target of ensuring that at least 80% of providers submit quarterly 
returns within three days of the deadline. Officers have generally been impressed at the timeliness of provider returns. All providers, submitted their returns within three days of deadline. As a result, 100% of providers submitted within target. This is a positive improvement and is down to both the 
hard work of the funded commissions and timely prompting by the grants team.  
108. 
Some providers are still feeding back to the grants team that the deadlines between quarter end 
and submission are very tight. London Councils intends to investigate this more fully during November and will undertake a survey of providers to get their feedback on the new system. The purpose of the survey will be to make improvements to the system that benefits both London Councils and the providers. Committee are asked to note that suggestions for improvements will only be acted upon if they are in line with the monitoring and commissioning arrangements for the 
programme. 

## 8.2 Provider Payments

109. 
Given the tight turnaround time between the submission deadline and the date of dispatch for 
this report, there is limited progress to report on Q2 payments to providers. Nevertheless, the grants team is confident that it will be able to meet its target of paying providers within four weeks of approving quarterly returns as specified in the new monitoring arrangements. The new arrangements also make payment contingent on organisations having fulfilled all necessary conditions of payment, which can include completing actions raised at monitoring visits, or requests 
for information. 110. 
The table below sets out the number of payments made relating to Q1, the number of payments 
on hold due to outstanding information and the number of payments not made due to delays in processing:  

## Table 3. Quarter One Payments

| Priority        | Payments    | On hold -    | On hold -    |
|-----------------|-------------|--------------|--------------|
| made            | awaiting    | processing   | taken to     |
| further         | delays at   | process      |              |
| information     | London      | payment      |              |
| from            | Councils    | (days)       |              |
| organisation    |             |              |              |
| 1. Homelessness | 6           | 2            |              |
| 8               | 9           |              |              |
 
|                      |     |     |     |
|----------------------|-----|-----|-----|
| 2. Sexual and        | 11  |     |     |
| 11                   |  8  |     |     |
| domestic violence    |     |     |     |
| 3. Poverty           | 10  |     |     |
| 10                   |  9  |     |     |
| 4. Capacity building |  6  |     |     |
| 6                    | 14  |     |     |
| Total                | 31  | 4   |     |
|                      |     |     |     |

111. 
33 of the 35 payments scheduled for quarter one have been made. In the three remaining 
cases, officers are awaiting further information from providers before payment can be released. In priority one, two organisations had not provided information required. First, St Mungo's was 
required to submit a signed partnership agreement10 to ensure no duplication of provision with 
Women in Prison in Holloway. This was not received until last week. Second, Stonewall Housing 
was required to submit a revised safeguarding policy. To date, this has not been received. Officers are chasing the outstanding documentation.  
 
112. 
Officers have made good progress against their target of processing payments within four 
weeks. The average time taken for quarter one payments to be made following sign off is 10 days. The range was one to 28 calendar days. As a result, all payments were made within the target of four weeks.  

## 8.3 Provider Monitoring

113. 
The grants team has a target to ensure that providers are visited twice a year. They spent a 
significant part of the last quarter undertaking monitoring visits. As part of the monitoring 
arrangements two main types of visit are undertaken; information i.e. audit type and delivery i.e. observation. To date, the following numbers of visits have been undertaken: 

## Table 4. Q1 And Q2 Monitoring Visits

| Priority               |   Information  |   Delivery  |   Total  |
|------------------------|----------------|-------------|----------|
| 1. Homelessness        |             2  |          2  |          |
| 4                      |                |             |          |
| 2. Sexual and domestic |             4  |          3  |          |
| 7                      |                |             |          |
| violence               |                |             |          |
| 3. Poverty             |             9  |          1  |          |
| 10                     |                |             |          |
| 4. Capacity building   |             1  |          3  |          |
| 4                      |                |             |          |
| Total                  |            16  |          9  |      25  |
|                        |                |             |          |

114. 
As highlighted in Table 2 (above), officers have undertaken 25 visits in Qs one and two. There 
has been a combination of information and delivery observance visits. In one instance, the Citizens 
Trust, two visits have been conducted - an initial information monitoring visit and a subsequent visit 
to address under-performance. To date, the visits have not revealed any substantive compliance 

                                               

issues. However, in some instances, officers have not been able to cover every element included in the visit templates within the time available to them. Where this is the case, these areas will be covered at subsequent visits.  
 

115. 
Officers have found some of the delivery visits quite harrowing, particularly those working with 
some of the most vulnerable groups e.g. victims of sexual and domestic violence. Managers will continue to monitor this situation and where necessary may have to identify additional support for 
officers. 116. 
In addition to the officer-led visits, the first of the planned chair's visits took place in October. 
Five members11 and the chair of the housing needs and homelessness borough officer network12 
accompanied Cllr McGlone to the visit at the London Youth Gateway project. The delegation was greeted by the chair of the New Horizon Youth Centre, Jon Snow, and introduced to the project 
partners13 and beneficiaries. 117. 
Members got to see at first hand the impact of London Councils' funding. Highlights included: 
 
- 
Hearing from young people about the impact the funding has had on their lives; 
- 
Seeing how the Grants Committee's approach to funding has formalised a partnership that improves outcomes for Londoners; 
- 
Contributing to a CV workshop designed to help beneficiaries move from homelessness into employment; 
- 
Seeing an advice session to help homeless young people make the transition into stable accommodation; 
- 
Participating in an arts based confidence building workshop; 
- 
Understanding how project partners work together to complement borough activities and where appropriate help young people re-engage with their families. 
 
 
118. 
Chair of London Councils' Grants Committee, Councillor Paul McGlone said: "Commissioning 
the London Youth Gateway Project has enabled a long standing consortium to formalise their partnership and better help some of our most vulnerable young people. Tackling homelessness is a key priority for the grants programme and this project will make a real difference to young people 
across London who are at risk, helping them move towards a better future." 
119. 
Jon Snow said: "Housing young vulnerable people remains an eternal struggle. In 
commissioning us London Councils has enabled us to forge the first truly comprehensive provision across London boroughs. Working with three experienced providers we are at last achieving results 
we have never been able to achieve before. The London Youth Gateway is one of the most exciting 
developments in the 46 years of our project. At last we have the real prospect of reducing 
homelessness amongst these vulnerable young people."   
120. 
Two further chair's visits have been booked with providers during the current electoral cycle. 
The dates and priorities are listed below and have been chosen in line with the areas covered by the Grants Committees thematic reviews. Members are encouraged to attend and asked to contact the head of grants and community services to register interest.  Please note that a visit for priority four has not yet been arranged as this falls so far after local government elections (November 2014). 

- 
13 February 2014 - GALOP - priority two 
- 
7 April 2014 Redbridge CVS - priority three 

## 8 Timetable And Next Steps November 2013 Grants Committee  (6 November)

- month-6 Budget Report - budget recommendations 
- update on first 6 months 
- thematic review - priority one 
Payments to providers (various) London Funders event - managing large partnerships (12 November)  
London Councils Summit (16 November) - Members are encouraged to attend 
- Grants team will have a presence 
Monitoring visits (various) 
Monthly chair's update meeting (27 November) 
Provider survey - commissioning monitoring arrangements (late November) 
 
December 2013 
Harmful practices taskforce (6 December) Review of provider survey - commissioning monitoring arrangements 
Monitoring visits (various) 
Monthly chair's update meeting (19 December) 
 
January 2014 
Monitoring visits (various) Monthly chair's update meeting (TBC) 
February 2014 
Monitoring visits (various) Monthly chair's update meeting (TBC) 
Chair's visit to Galop (Priority 2) (13 February) Deadline for Q3 returns (17 February) Assessment of provider returns (17 February - 13 March) 
|                                      |                                 |
|--------------------------------------|---------------------------------|
| March 2014                           | Payments to providers (various) |
| Monitoring visits (various)          |                                 |
| Monthly chair's update meeting (TBC) |                                 |
| Grants Executive (5 March)           |                                 |
| Grants Committee (25 March)          |                                 |
| - month 9 budget report              |                                 |
| - thematic review - priority two     |                                 |

## Recommendations

1. **Note** the results of the Red Amber Green (RAG) risk rating and approve actions suggested by 
officers in this regard. 
2. **Note** provider progress against profile and approve actions proposed by officers and that as per 
paragraph 5 the number of red ratings has decreased from three (9%) in Q1 to zero in Q2. 
3. **Note** the following areas highlighted by the Chair of the Grants Committee: 
o No interventions regarding reductions in funding to organisations are recommended at 
this six month review stage; 
o Twenty-five monitoring visits had been conducted by the end of Q2, with three 
organisations to receive priority visits in Q3 (Hopscotch Asian Women's Centre - 25 
November, Inclusion London - 13 November, Age Concern - 29 November);. 
4. **Note** that the report is being shared with Leaders Committee following the Daniel review in early 
2013.  

## Background Papers

2013-15 Grants Programme, Grants Committee, 20 February 2013 
Minutes, Grants Committee, 20 February 2013 Minutes, Grants Committee AGM, 10 July 2013 Q1 Progress Report 
 
________________________________________________________________________________________ 

## Financial Implications For London Councils

Refer to Grants M6 forecast report (6 November Grants Committee agenda item seven) 

## Legal Implications For London Councils None Equalities Implications For London Councils

London Councils' funded services provide support to people within all the protected characteristics (Equality Act 2010), and in particular targets groups highlighted as particularly hard to reach or more affected by the issues being tackled. Funded organisations are also required to submit equalities monitoring data, which can be collated across the grants scheme to provide data on the take up of services and gaps in provision to be addressed. The grants team will undertake an annual review. 

## Appendix 1: Q2 Rag Risk Ratings

Funding 2013-15 Strands 
Organisation 
Partners 
Risk Rating 19 August 2013 
Green 
Green 
  
1.1 Stonewall Housing 
Referral partners: Shelter, AdviceUK, Royal Association for Deaf People. 
1.1 Women in Prison Ltd 
  
Red 
Amber 
Women in Prison are making good progress following a re-profiling exercise in Q1 to address under-delivery 
caused by a delayed start to the project. Progression from a red to amber rating is expected at this stage, but officers will looking for  improvements over all outcome areas in the next quarter to ensure targets 
can be met going forward and shortfalls fully addressed. Re-profiling will be raised at this stage if 
this is not the case. 
1.1 Shelter - London Advice 
Green 
Green 
  
Services 
Broadway Housing Association, (plus the project will be supported by a range of referral partners Family Mosaic, Genesis Housing Association, Peabody, P3, Royal Association for the Deaf (RAD), Southern Housing Group, Stonewall Housing Association) 
1.1 St Mungo Community Housing 
Association 
  
Amber 
Amber 
The commission has had a number of data related issues following the introduction of the new system of reporting and have often failed to submit requests for information in a timely manner. This has been raised by officers on a number of occasions and has resulted in a low rating for responsiveness in this 
quarter. It is hoped that this has been addressed by the recruitment of an implementation officer by the organisation who will have responsibility for data 
| Further Information    |
|------------------------|
| Rating                 |
| 29                     |
| October                |
| 2013                   |
reporting in the future. All outstanding requirements 
have now been received and monitoring information for this quarter was received on time. This situation will be closely monitored in the next quarter and discussed at their monitoring visit next month. 
Green 
Green 
  
1.1 Thames Reach 
Eaves Housing for Women, Addaction Drug and Alcohol Services 
1.1 The Connection at St Martin's 
  
Green 
Green 
  
Green 
Green 
  
1.2 New Horizon Youth Centre 
New Horizon Youth Centre, Alone in London, Depaul UK, Stonewall Housing. 
1.3 Homeless Link 
Shelter, DrugScope. 
Green 
Green 
  
Green 
Green 
  
2.1 Tender Education and Arts 
The Nia Project, Solace Women's Aid, Women and Girls Network (WGN), 
Southall Black Sisters Trust (SBS), Ashiana Network, Latin American Women's Rights Service (LAWRS), Foundation For Women's Health Research & 
Development (FORWARD), Iranian and Kurdish Women Rights Organisation (IKWRO), Asian Women's Resource Centre (AWRC), 
IMECE Women's Centre, 
Green 
Green 
  
2.2 Galop 
Stonewall Housing, Pace, Broken Rainbow, Galop, London Lesbian and Gay Switchboard. 
2.2 Women in Prison Ltd 
  
Red 
Green 
 
2.2 SignHealth 
  
Green 
Amber 
The provider only narrowly missed out on a green rating (0.52 points), scoring 74.48 out of 100. This was a result of fewer beneficiaries progressing 
through the project. The reason given by the provider is that it had worked with nine deaf women with complex needs including substance misuse and child 
| Green                         | Green    |       | 2.2 Solace Women's Aid      | ASHIANA Network, Asian    |
|-------------------------------|----------|-------|-----------------------------|---------------------------|
| Women's Resource Centre       |          |       |                             |                           |
| (AWRC), Chinese               |          |       |                             |                           |
| Information & Advice Centre   |          |       |                             |                           |
| (CIAC), Ethnic Alcohol        |          |       |                             |                           |
| Counselling in Hounslow       |          |       |                             |                           |
| (EACH), Iranian and           |          |       |                             |                           |
| Kurdish Women Rights          |          |       |                             |                           |
| Organisation (IKWRO),         |          |       |                             |                           |
| IMECE Turkish Speaking        |          |       |                             |                           |
| Women's Group, Latin          |          |       |                             |                           |
| American Women's Rights       |          |       |                             |                           |
| Service (LAWRS), The Nia      |          |       |                             |                           |
| project, Rights of Women      |          |       |                             |                           |
| (ROW), Southall Black         |          |       |                             |                           |
| Sisters (SBS), Jewish         |          |       |                             |                           |
| Women's Aid (JWA),            |          |       |                             |                           |
| Women and Girls Network       |          |       |                             |                           |
| (WGN), Solace Women's         |          |       |                             |                           |
| Aid (SWA).                    |          |       |                             |                           |
| 2.3 Women's Aid Federation of | Amber    | Green |                             |                           |
| England (Women's Aid)         |          |       |                             |                           |
| Women's Aid, Refuge,          |          |       |                             |                           |
| Women & Girl's Network.       |          |       |                             |                           |
| 2.4 Eaves Housing for Women   |          | Green | Green                       |                           |
| Green                         | Green    |       | 2.4 Ashiana Network         | Ashiana Network, Solace   |
| Women's Aid, Nia.             |          |       |                             |                           |
| Green                         | Green    |       | 2.5 Women's Resource Centre | Women's Resource Centre,  |
| AVA (Against Violence &       |          |       |                             |                           |
| Abuse), Imkaan, Respect,      |          |       |                             |                           |
| Rights of Women, Women        |          |       |                             |                           |
| and Girls Network.            |          |       |                             |                           |
| 2.6 Asian Women's Resource    | Green    | Green |                             |                           |
| Centre                        |          |       |                             |                           |
| Southall Black Sisters Trust, |          |       |                             |                           |
| FORWARD, IMECE                |          |       |                             |                           |

protection issues. Delays of this nature are likely to have a larger impact on a project of this size, which is only due to work with 50 people over two years. 

Officers have discussed the extent to which the provider will be able to catch up and at this stage, Sign Health are confident that they will. No further action is recommended at this time. 

Women's Centre, Women 
and Girls Network, IKWRO Women's Rights Organisation. 
2.6 Domestic Violence Intervention 
  
Green 
Green 
  
Project 
3.1a The Citizen's Trust 
London Skills Academy, The Camden Society 
Red 
Amber 
Last quarter the provider was RAG rated red and received a score of 46.77. After re-profiling delivery, they are now amber rated with a RAG score of 74.78. Officers have some concerns about the realism of the new profile and have shared these with the provider, who is adamant that it is achievable. Officers will continue to monitor closely. 
3.1b Peter Bedford Housing 
Green 
Green 
  
Association 
East Potential, Hillside Clubhouse, 
3.2 MI ComputSolutions 
Green 
Green 
  
Incorporated 
AFRICA ADVOCACY 
FOUNDATION, AMICUSHORIZON, RIPE ENTERPRISES  
3.2 Paddington Development Trust 
Amber 
Green 
 
(PDT) 
Renaissance Skills Centre (RSC), Hammersmith & Fulham Volunteer Centre, 
Urban Partnership Group , Skills & Development Agency 
Amber 
Green 
 
3.2 Urban Futures London Limited 
The Selby Trust,Newlon Fusion, (Prevista) 
3.3 Hopscotch Asian Women's 
Centre 
Refugee Women's Association, The Citizen's Trust 
Green 
Amber 
RAG rating dropped from 80.91 in Q1 to 55.08 in Q2. The provider has suggested that it was unable to collect all of the outcomes evidence for Q2 and as a result is behind profile. Of particular concern are 
progressions into employment (6/28) and progressions into further education and training (13/36). However, officers have wider concerns about 
the accuracy of supporting information provided with 
the Q2 return. An urgent progress review meeting has been scheduled for 25 November. Officers will assess 
whether evidence collection is the only concern with 
the project. A performance improvement plan will 
3.3 London Training and 
Employment  Network (LTEN) 
Crisis UK, East London Skills for Life (ELS), Havering Association of Voluntary and Community 
Organisations (HAVCO), Midaye Somali Women's Development Network 
Amber 
Amber 
There has been little change in the provider's RAG rating between Q1 (71.05) and Q2 (69.15). The 
provider is over-performing on job outcomes (5/3). 
However, is significantly behind target for 
progressions into further education and training (7/25) and work placements (0/4). The first issue relates to partners holding on to participants to maximise job outcomes. The second to criminal records checks. The provider and officers are confident that it will get back on track and officers are recommending a reprofile. 
3.3 Redbridge Council for 
Green 
Green 
  
Voluntary Service 
Widows & Orphans International, DABD 
Green 
Green 
  
3.3 Catalyst Gateway 
East Potential (part of East 
Thames Group) 
3.4 St Mungo Community Housing 
Association 
Foundation 66, AJ Associates 
Amber 
Amber 
Green 
Green 
  
4 Children England 
Partnership for Young London, Race Equality 
Foundation. 
4 London Deaf & Disability 
Transport for All. 
Green 
Green 
  
Organisations CIC (Inclusion London) 
developed to address all issues identified. 
There has been little change in the provider's RAG rating between Q1 (70.94) and Q2 (70.51). St Mungo's re-profiled in Q2. However, are still behind profile. Of particular concern is the number of people undertaking work placements (5/15). St Mungo's are taking the following actions to address this issue. Firstly, they have recently reached agreement with six law firms to provide work placements for their beneficiaries. Second, they will be creating internal volunteering opportunities. Third, the staff member responsible for this element of delivery has been set weekly targets which will be monitored closely by the project manager going forward. Officers will maintain 
contact with the provider and have arranged a visit for 
3 December 2013. Should performance not improve 
by Q3, officers will make further recommendations to 
committee as appropriate 
| Green                      | Green    |       | 4 Advice UK          | Law Centres Federation,    |
|----------------------------|----------|-------|----------------------|----------------------------|
| Lasa.                      |          |       |                      |                            |
| 4 London Voluntary Service | Green    | Green |                      |                            |
| Council                    |          |       |                      |                            |
| Race on the Agenda,        |          |       |                      |                            |
| Women's Resource Centre,   |          |       |                      |                            |
| Refugees in Effective and  |          |       |                      |                            |
| Active Partnerships, Lasa. |          |       |                      |                            |
| Green                      | Green    |       | 4 Age Concern London | Opening Doors Age UK,      |
| London Older People        |          |       |                      |                            |
| Advisory Group (LOPAG).    |          |       |                      |                            |
| 4 The Refugee Council      |          | Green | Green                |                            |

## Appendix 2: Priority 1 Outcome Definitions And Delivery Against Target Q2

| Outcome                                                                                  | Definition    | Profile    | Actual    | Difference Variance    |
|------------------------------------------------------------------------------------------|---------------|------------|-----------|------------------------|
| Specification 1.1 Homelessness Early Intervention and Prevention                         |               |            |           |                        |
|                                                                                          |               |            |           |                        |
| 1                                                                                        |               |            |           |                        |
| People/ families at risk of homelessness, who are homeless or living in insecure         |               |            |           |                        |
| accommodation assisted to obtain suitable temporary or permanent accommodation           | 570           | 600        | 30        | 5.26%                  |
| 2 People/ families successfully sustaining their tenancies for one year or more          |               |            |           |                        |
| 3 People have improved physical and mental health                                        | 138           | 130        | -8        | -5.80%                 |
| 4                                                                                        |               |            |           |                        |
| People have increased learning and improvements in life skills and employment and        |               |            |           |                        |
| training opportunities                                                                   | 645           | 892        | 247       | 38.29%                 |
| 5 People have increased levels of social interaction and reduced levels of isolation     | 171           | 183        | 12        | 7.02%                  |
| 6 People within the protected equalities groups have increased access to housing advice  | 158           | 142        | -16       | -10.13%                |
| Total All                                                                                | 1,682         | 1,947      | 265       | 15.76%                 |
| Specification 1.2 Youth Homelessness                                                     |               |            |           |                        |
| 1                                                                                        |               |            |           |                        |
| Young people who are homeless or living in insecure accommodation obtain suitable        |               |            |           |                        |
| temporary or permanent accommodation                                                     | 115           | 114        | -1        | -0.87%                 |
| 2 Young people successfully sustaining their tenancies for one year or more              |               |            | -         |                        |
| 3 Young people have improved health and mental health                                    | 272           | 253        | -19       | -6.99%                 |
| 4                                                                                        |               |            |           |                        |
| Young people have increased learning and improvements in life skills and employment      |               |            |           |                        |
| and training opportunities                                                               | 98            | 167        | 69        | 70.41%                 |
| 5                                                                                        |               |            |           |                        |
| Young people within the protected equalities groups with enhanced knowledge of           |               |            |           |                        |
| tackling homelessness                                                                    | 931           | 940        | 9         | 0.97%                  |
| Total All                                                                                | 1,416         | 1,474      | 58        | 4.10%                  |
| Specification 1.3 Support Services to Homelessness Voluntary Sector Organisations        |               |            |           |                        |
| 14                                                                                       |               |            |           |                        |
|                                                                                          |               |            |           |                        |
| 1                                                                                        |               |            |           |                        |
| Frontline organisations better able to deliver high quality housing provision support to |               |            |           |                        |
| the protected equalities groups and better able to deliver well informed specialist      |               |            |           |                        |
| services, advice and specialist housing and social welfare advocacy and representation   |               |            |           |                        |
| for and to the following:                                                                |               |            |           |                        |
| - Black, Asian, minority ethnic, refugee and migrant groups.                             |               |            |           |                        |
| - Women                                                                                  |               |            |           |                        |
| - Young and older people                                                                 |               |            |           |                        |
| - Lesbian, gay, transgender and bisexual groups.                                         |               |            |           |                        |
| - Deaf and disabled groups.                                                              | 30            | 58         | 28        | 93.33%                 |
| 2                                                                                        |               |            |           |                        |
| Frontline organisations better able to raise issues of housing discrimination and trends |               |            |           |                        |
| in housing provision for the above equalities groups strategically together and with     |               |            |           |                        |
| boroughs through sharing good practice, knowledge and expertise. This will include       | -             | -          |           |                        |
|                                                                                          |               |            |           |                        |
frontline organisations facilitated to contribute to information and data sharing on 
homelessness. 
3 
Frontline organisations that support the protected equalities groups identified within this specification better able to secure funding and resources and to develop the capacity of their organisation. 
- 
- 
 
 
4 
Frontline homelessness organisations better equipped to respond to the diversity of equalities needs 
- 
- 
 
 
Total All 
30 
58 
28 
93.33% 

## Appendix 3: Priority 2 Outcome Definitions And Delivery Against Target Q2

| Outcome                                                                                    | Definition    | Profile    | Actual    | Differen   |
|--------------------------------------------------------------------------------------------|---------------|------------|-----------|------------|
| ce                                                                                         |               |            |           |            |
| Specification 2.1: Sexual and Domestic Violence Prevention                                 |               |            |           |            |
|                                                                                            |               |            |           |            |
| 1                                                                                          |               |            |           |            |
| Children and young people view sexual and domestic violence as unacceptable and            |               |            |           |            |
| can identify the warning signs and myths.                                                  | 306           | 264        | -42       | -13.73%    |
| 2                                                                                          |               |            |           |            |
| Children and young people can identify what positive respectful relationships based on     |               |            |           |            |
| equal power are and have increased confidence and empowerment enabling positive            |               |            |           |            |
| choices to be made.                                                                        | 2,032         | 3,085      | 1,053     | 51.82%     |
| 3                                                                                          |               |            |           |            |
| Children and young people can identify where to seek support/ their rights/ how to         |               |            |           |            |
| disclose                                                                                   | 360           | 304        | -56       | -15.56%    |
| 4 Children and young people have respectful relationships with their peers.                | 108           | 127        | 19        | 17.59%     |
| 5                                                                                          |               |            |           |            |
| Professionals understand the facts, myths and risk factors relating to sexual and          |               |            |           |            |
| domestic violence (in particular issues that affect children and young people such as      |               |            |           |            |
| sexual exploitation, trafficking, FGM and sexual violence in gang settings) and feel able  |               |            |           |            |
| to address issues with children and young people                                           | 199           | 415        | 216       | 108.54%    |
| 6                                                                                          |               |            |           |            |
| Children and young people are more aware of sexual and domestic violence in relation       |               |            |           |            |
| to the eight protected characteristics (for example violence in same sex relationships,    |               |            |           |            |
| FGM, forced marriage)                                                                      | 288           | 276        | -12       | -4.17%     |
| Total All                                                                                  | 3,293         | 4,471      | 1,178     | 35.77%     |
|                                                                                            |               |            |           |            |
| Specification 2.2: Sexual and Domestic Violence Advice, Counselling, Outreach, Drop-in and |               |            |           |            |
| Support for Access to Services                                                             |               |            |           |            |
|                                                                                            |               |            |           |            |
| 1 Users better able to access appropriate services                                         | 2,038         | 2,002      | -36       | -1.77%     |
| 2 Reduced levels/ repeat victimisation of sexual and domestic violence                     | 1,353         | 1,353      | -         | 0.00%      |
| 3                                                                                          |               |            |           |            |
| Service providers are better informed of beneficiaries' needs and service users are        |               |            |           |            |
| enabled to communicate their needs and views to service providers/decision makers          | 804           | 804        | -         | 0.00%      |
| 4                                                                                          |               |            |           |            |
| Service users have improved self-esteem, motivation, confidence, emotional health and      |               |            |           |            |
| well-being and physical health and are able to rebuild their lives, moving to              |               |            |           |            |
| independence.                                                                              | 1,200         | 1,162      | -38       | -3.17%     |
| 5                                                                                          |               |            |           |            |
| Beneficiaries more able to make safe choices leading to a reduction in occurrence          |               |            |           |            |
| and/or effects of violence, sexual abuse and repeat victimisation.                         | 619           | 619        | -         | 0.00%      |
| 6                                                                                          |               |            |           |            |
| More informed life choices to enable users to rebuild their lives and move to              |               |            |           |            |
| independence:                                                                              |               |            |           |            |
| - health (including sexual health, mental health, drug and alcohol support)                |               |            |           |            |
| - employment                                                                               |               |            |           |            |
| - legal/ criminal justice system                                                           | 1,223         | 1,182      | -41       | -3.35%     |
- education 
- training - immigration 
- housing 
- children's services 
7 
People from the protected characteristics have access to advice in a way that meets their needs. 
982 
982 
- 
0.00% 
Total All 
8,219 
8,104 
-115 
-1.40% 
Specification 2.3: Helpline and Co-ordinated Access to Refuge Provision 

                      
                       
                         
1 
Increased access to emergency refuge accommodation for people escaping domestic violence. 
100  
110  
10  
10.00% 
                          
                          
                          
2 
Improved data collection of service users and service provision resulting in increased information on sexual and domestic violence services in London and beneficiaries needs. 
-    
-    
-    
  
                         
                         
                         
3 Service users are supported to move to a position of safety.  
75  
85  
10  
13.33% 
                           
                         
                         
4 
London boroughs receive dedicated support in accessing refuge provision for service users affected by domestic violence. Statutory providers, friends, family and voluntary agencies are better able to support those experiencing domestic violence. 
8  
27  
19  
237.50% 
                       
                       
                         
5 
People with the protected characteristics (2010 Equalities Act) are able to access support that meets their needs.  
100  
110  
10  
10.00% 
                       
                       
                         
Total All 
283  
332  
49  
17.31% 


Specification 2.4: Emergency Refuge Accommodation that Offers Services to Meet the Needs of Specific Groups 
1 
Safety from immediate danger from perpetrators through specialist emergency accommodation. 
8 
23 
15 
187.50% 
2 
Increased access to specialist support and culturally specific provision (such as drug and alcohol support, support with mental health, support to exit prostitution. Culturally specific provision to include so called 'honour' based violence, forced marriage, female genital mutilation, early marriage, language and culture, immigration and no recourse to public funds). 
17 
27 
10 
58.82% 
3 
Increased confidence, self-esteem, mental health and increased ability to deal with the effects of domestic violence 
11 
19 
8 
72.73% 
4 
Independent lives rebuilt, through improved independent living skills, knowledge and 
access to benefits, entitlements, supported/permanent housing 
8 
20 
12 
150.00% 
5 
Relationship rebuilt with children where damaged, make safe choices and access support for their children. 
7 
31 
24 
342.86% 
6 Removal of barriers in accessing services for people with the protected characteristics 
17 
32 
15 
88.24% 
of the 2010 Equalities Act 
Total All 
68 
152 
84 
123.53% 
Specification 2.5: Support Services to Sexual and Domestic Violence Voluntary Sector Organisations 


1 
Frontline providers are effective and sustainable organisations (financial management, 
governance, recruitment/workforce, ICT, premises, fundraising/ tenders/contracts, recruitment or board members) 
34 
27 
-7 
-20.59% 
2 
Frontline providers able to deliver improved services to meet their clients' needs (deliver, monitor, evaluate and adapt) 
12 
76 
64 
533.33% 
3 
Frontline organisations are able to develop effective partnerships and work with other voluntary and community organisations or statutory providers, linking to local services and networks. 
30 
59 
29 
96.67% 
4 
Frontline organisations able to better represent their service users and ensure they are up to date with policy changes. (Including supporting the sector to collate and analyse data on need) 
16 
24 
8 
50.00% 
5 Frontline organisations better able to achieve the three aims of the 2010 Equalities Act 
10 
12 
2 
20.00% 
Total All 
102 
198 
96 
94.12% 


Specification 2.6: Specifically Targeted Services FGM, Honour Based Violence (HBV), Forced Marriage and other Harmful Practices 
1 
Service users have improved self-esteem, confidence and emotional health and well being 
15 
194 
179 
1193.33% 
2 
Service users have a better understanding of the support options available to them and are more aware of their rights and entitlements 
16 
199 
183 
1143.75% 
3 
Service users have an increased ability to communicate their needs and views to service providers 
144 
179 
35 
24.31% 
4 
Service users are able to make safe choices and exit violent situations/ service users have enhanced coping strategies through risk assessment and safeguarding 
113 
99 
-14 
-12.39% 
5 
Service users have improved life skills to help them rebuild their lives and move to independence 
- 
1 
1 
- 
Total All 
288 
672 
384 
133.33% 

## Appendix 4: Priority 3 Outcome Definitions And Delivery Against Target Q2

| Outcome                                                                                 | Definition    | Profile    | Actual    | Difference    |
|-----------------------------------------------------------------------------------------|---------------|------------|-----------|---------------|
| Specification 3.1a: Disabled Parents                                                    |               |            |           |               |
|                                                                                         |               |            |           |               |
| 1 6+ hours of one-to-one support                                                        | 72            | 72         | 0         | 0%            |
| 2 Completing Work or Volunteering placement                                             | 1             | 1          | 0         | 0%            |
| 3 Gaining Employment within 13 weeks of leaving                                         | 3             | 3          | 0         | 0%            |
| 4 Sustaining employment for 26 weeks                                                    |               |            | 0         |               |
| 5 Progression into education or training                                                | 6             | 6          | 0         | 0%            |
| Total All                                                                               | 82            | 82         | 0         | 0%            |
| Specification 3.1b: People with Mental Health Needs                                     |               |            |           |               |
| 1 6+ hours of one-to-one support                                                        | 80            | 88         | 8         | 10%           |
| 2 Completing Work or Volunteering placement                                             | 35            | 30         | -5        | -14%          |
| 3 Gaining Employment within 13 weeks of leaving                                         | 15            | 11         | -4        | -27%          |
| 4 Sustaining employment for 26 weeks                                                    | 0             | 0          | 0         |               |
| 5 Progression into education or training                                                | 15            | 13         | -2        | -13%          |
| Total All                                                                               | 145           | 142        | -3        | -2%           |
| Specification 3.2: People from Ethnic Groups with Low Labour Market Participation Rates |               |            |           |               |
| 1 6+ hours of one-to-one support                                                        | 193           | 206        | 13        | 7%            |
| 2 Completing Work or Volunteering placement                                             | 14            | 28         | 14        | 100%          |
| 3 Gaining Employment within 13 weeks of leaving                                         | 66            | 68         | 2         | 3%            |
| 4 Sustaining employment for 26 weeks                                                    | 0             | 0          | 0         |               |
| 5 Progression into education or training                                                | 16            | 14         | -2        | -13%          |
| Total All                                                                               | 289           | 316        | 27        | 9%            |
| Specification 3.3: Women Facing Barriers to Employment                                  |               |            |           |               |
|                                                                                         |               |            |           |               |
| 1 6+ hours of one-to-one support                                                        | 498           | 432        | -66       | -13%          |
| 2 Completing Work or Volunteering placement                                             | 126           | 86         | -40       | -32%          |
| 3 Gaining Employment within 13 weeks of leaving                                         | 88            | 64         | -24       | -27%          |
| 4 Sustaining employment for 26 weeks                                                    | 0             | 0          | 0         |               |
| 5 Progression into education or training                                                | 87            | 34         | -53       | -61%          |
| Total All                                                                               | 799           | 616        | -183      | -23%          |
| Specification 3.4: People Recovering from Drug and Alcohol Misuse                       |               |            |           |               |
|                                                                                         |               |            |           |               |
| 1 6+ hours of one-to-one support                                                        | 23            | 27         | 4         | 17%           |
| 2 Completing Work or Volunteering placement                                             | 15            | 5          | -10       | -67%          |
| 3 Gaining Employment within 13 weeks of leaving                                         | 8             | 6          | -2        | -25%          |
| 4 Sustaining employment for 26 weeks                                                    | 0             | 0          | 0         |               |
| 5 Progression into education or training    |   10  |   8  |   -2  | -20%    |
|---------------------------------------------|-------|------|-------|---------|
| Total All                                   |   56  |  46  |  -10  | -18%    |

# Leaders' Committee Item No:  4 Pensions Working Group: Progress Report And Proposed Next Steps Towards A London Lgps Civ

Report by: 
Hugh Grover Job title: 
Director, Fair Funding, Performance and Procurement Date: 
10 December 2013 

Contact Officer: 
Hugh Grover  
Telephone: 
020 7934 9942 
Email: 
hugh.grover@londoncouncils.gov.uk 

Summary This report follows on from previous discussions, in particular at Leaders' Committee in March 2012, November 2012, December 2012, and May 2013, and more lately at the Executive in September and November 2013. Those discussions have focussed on the potential for more collaboration between boroughs that wished to do so, on the management and investment of pension funds. In response to the May 2013 report, Leaders' Committee commissioned the Pensions Working Group (PWG) to carry out further work and to bring a report to a future meeting, which would look at detailed issues connected to the establishment of a possible London LGPS Collective Investment Vehicle (CIV). This report fulfils that request, sets out the current thinking of the PWG 
and asks Leaders' Committee to consider whether the proposals outlined are sufficient to underpin the establishment of a formal project to establish a London LGPS CIV. In broad terms, the PWG are of a view that, should members be minded to pursue the proposals outlined below: 

- 
The necessary legal framework exists to establish a London 
LGPS CIV, which would be structured as an Authorised Contractual Scheme (ACS); 
- 
That 
significant 
financial 
benefits 
would 
accrue 
from 
establishing a CIV from reduced costs and, for many, improved investment returns; and 
- 
A collaborative approach provides opportunities to potentially invest in types of assets that smaller individual funds may not 
be able to easily access, for instance direct investment in 

## Appropriate Infrastructure Projects.

 For clarity at the outset, it is sensible to state that all the proposals outlined in this report are based on voluntary participation by boroughs, and that fund mergers do not play a part in any way. 

Recommendations 
Leaders' Committee is recommended to consider and comment on the matters raised in this report and: 
I. 
Indicate support for the establishment of a London LGPS CIV; 
II. 
Agree that London Councils should: 
i. continue to facilitate further work, under the oversight of the 
PWG, with the next step being the engagement of expert legal 
and financial services advisers and the formulation of a robust business 
case 
and 
formal 
proposal 
to 
proceed 
with 
implementation;  
ii. explore, as part of this work, how London Councils can best 
support collective borough interests where those boroughs 
agree to participate in the ASC and invest in the CIV; 
iii. recruit a suitably qualified Project Manager and any other staff 
required; 
iv. establish a designated fund with contributions from those 
boroughs interested in exploring these proposals; and 
v. maintain on-going dialogue with HM Government relating to the 
Government's review of local authority pensions schemes which 
may 
directly 
impact 
upon 
these 
proposals 
and 
their 
implementation. 

## Pensions Working Group: Progress Report And Proposed Next Steps Towards A London Lgps Civ Introduction

1. 
At its May 2013 meeting, Leaders' Committee received a progress update from the Pensions Working Group (PWG), which outlined the views and recommendations of the PWG flowing from the group's first meeting. Following discussion, Leaders' Committee agreed the recommendations of the PWG and commissioned the group to carry out further work and to report back later in the year. This report fulfils that request, sets out 
the current thinking of the PWG and asks Leaders' Committee to consider whether the proposals outlined are sufficient to underpin the establishment of a formal project heading towards establishment of a London LGPS CIV.  
2. 
In broad terms, the PWG are of a view that, should members be minded to pursue the 
proposals outlined below: 
- 
The necessary legal framework exists to establish a London LGPS CIV, which would be structured as an Authorised Contractual Scheme (ACS); 
- 
That significant financial benefits would accrue from establishing a CIV from reduced costs and, for many, improved investment returns; and 
- 
A collaborative approach provides opportunities to potentially invest in types of assets that smaller individual funds may not be able to easily access, for instance direct investment in infrastructure projects. 

## Background

3. 
The 33 London LGPS funds currently have over £20bn of assets under management. 
Some of those funds deliver performance that is amongst the best, there is no doubt 
though, that some of the funds are performing less well, and all funds are facing the 
challenging environment of volatile asset performance and increasing liabilities.  
4. 
This pattern of mixed performance is replicated across the country and has attracted the attention of CLG Ministers. The question of LGPS efficiency and value for money has 
become a key issue for the Government. Brandon Lewis MP (Parliamentary Under 
Secretary of State for Communities and Local Government) has expressed public views 
on more than one occasion, including, at the 2013 NAPF conference; 'If it takes a smaller 
number of funds to improve the efficiency and cost-effectiveness of the scheme, I shall 
not shy away from pursuing that goal.' 
5. 
In part, this led to the Government issuing a call for evidence on the future structure of the LGPS and what changes might be adopted to increase the overall efficiency and value for money of the scheme. It is clear that, from the Minister's perspective, 'no change' is not 
an option and in the call for evidence the Government states eight overarching objectives for potential structural reform:  

## High Level Objectives

I. 
Dealing with deficits  
II. 
Improving investment returns  

## Secondary Objectives

III. 
To reduce investment fees 
IV. 
To improve the flexibility of investment strategies  
V. 
To provide for greater investment in infrastructure  
VI. 
To improve the cost effectiveness of administration  
VII. 
To provide access to higher quality staffing resources  
VIII. 
To provide more in-house investment resource  
6. 
London Councils submitted a response on behalf of its members, which was cleared by 
Elected Officers under urgency procedures. The final submission is attached at Annex A.  
7. 
Shortly after the call for evidence closed, CLG and the Cabinet Office released an 
invitation to tender seeking professional advice and evidence looking at three potential, 
fully-costed, collaborative models: 
I. 
A common investment vehicle at England and Wales level, with asset allocation strategies still determined by the local pension funds; 
II. 
5-10 common investment vehicles across England and Wales, for example based on aggregate fund size or geographical areas, again with asset allocation strategies decided by local governance structures; 
III. 
5-10 merged funds across England and Wales, grouped on the same basis as the common investment vehicles above, but with decision-making taken by new governance arrangements at the merged fund level.  
8. 
The tender set out a very tight timescale, with the advice to be provided by the end of November (subsequently extended to early December). This gives a clear indication that 
the Minister wishes to move swiftly. It is anticipated that a formal consultation on the 
Government's preferred options will be published by the end of the year. 
9. 
The interest being shown by the Minister presents a risk that Government 
decisions/actions will impact on any decisions taken by Leaders' Committee to pursue a CIV in London. This risk is recognised in the discussion of risk later in this report, and was, in part, a catalyst to the Chair meeting with the Minister in September to discuss the 
future of the LGPS. The Chair was accompanied at the meeting by the Chamberlain of the City of London, the Director of Finance from LB Wandsworth, and the Director of Fair 
Funding, Performance and Procurement at London Councils. 
10. The meeting provided a timely opportunity to raise the awareness of work being 
undertaken within London, particularly in respect of the collective investment vehicle and to discuss the extent to which it could address some of the government's key issues. In principle, the Minister was supportive of our continued work on a potential CIV for London. However, in light of the Government's on-going evidence gathering and 
proposed consultation, he was unable to give wholesale endorsement.  
11. It was agreed that the Minister and the Chair would communicate further, before London 
boroughs make any final commitments that might lead to resource expenditure in any new arrangements. To that end, the Chair has now written to both Brandon Lewis MP and the Chief Secretary to the Treasury, copies of the letters are attached at Annex B. At the 
time of drafting, replies have not been received, but should they arrive before Leaders' Committee convenes, members will be provided with copies. 
12. In the context of mixed performance and the wider challenges, including pressure from 
Government Ministers, broad based support has emerged from London local government 
to move proactively towards the creation of a collaborative CIV.  
13. Were such a CIV established, Investment Managers would be appointed to provide a 
range of investment asset classes, which participating authorities could opt, on a 
voluntary basis, to invest in. The decision to invest through the CIV would remain with 
each authority's pension fund committee, as would the size of any investment and the mix 
of asset classes.  
14. Fund mergers are not necessary, or recommended, for the benefits of this arrangement 
to be delivered. 
15. Subject to Leaders' Committee agreement to the proposals outlined below, the scheme 
would be set up and launched with investments in traditional assets classes, such as 
equities (passive/active strategies) and bonds, but could expand to cover alternative 
asset classes such as property and infrastructure as and when suitable investments are 
identified. 
16. Creating a CIV would provide a platform for closer collaboration across both London local 
government and, potentially, the wider LGPS community, and the flexibility of the recommended structure would support expansion of the investment propositions. Over 
time, the solid reputation and quality of the investment services provided, together with the expertise and compelling cost structure of the scheme is likely to attract the wider 
LGPS community. 
17. In addition, the framework for implementation that appears most attractive (UK based 
Authorised Contractual Scheme (ACS)) would ensure that LGPS funds remain domiciled 
within the UK, unlike other similar collaborative structures that would potentially move the funds offshore to, for example, Ireland or Luxembourg. 
18. There are a number of advantages to establishing an ACS type CIV, most significantly, 
participating authorities would expect to see significant cost savings and, overall, improved investment returns. In addition, the ACS structure ensures that each investment fund stands alone in its own right. This means that the investment risk within each fund is 
ring fenced and will not impact on other funds - in this way each authority can make its 
own decisions about the balance of risk exposure without fear of picking up elements of 
risk from other authorities. 

## London Local Authority Engagement

19. Through the Society of London Treasurers (SLT), all London local authorities have been 
asked to indicate their level of interest in the establishment of a London LGPS CIV, and 
whether Treasurers would be minded to recommend that their authority should contribute towards a designated fund to finance further work and specialist advice.  
20. Responses to date are:  
- 
20 funds have indicated they are keen to participate and are prepared to assist 
with funding of £25-50k per fund; 
- 
6 funds are keen to participate but have not yet decided whether to agree funding; 
- 
6 funds are as yet undecided; and 
- 
1 fund is not interested in participating. 
21. In addition, a technical sub-group, established under the PWG, has received active 
engagement from LGPS experts from Barking & Dagenham, Bexley, Croydon, Ealing, 
Hackney, and Wandsworth. 

## Possible Structure Of The Investment Vehicle

22. The PWG technical sub-group has taken advice from a number of industry experts, and 
has engaged in informal discussions with HM Treasury, on the most suitable legal 
structure of any potential CIV. From that advice, it seems most likely that an Authorised Contractual Scheme (ACS) is the most appropriate. 
23. In brief, an ACS is a Financial Conduct Authority (FCA) regulated, tax transparent (tax 
efficient) co-ownership investment scheme recently launched by HM Treasury (summer 
2013). It is structured by way of contractual agreement between the investing authorities to enable collective investment in transferable securities. It is designed to be attractive to 
Fund Managers, Insurance Companies and Pension Funds that might otherwise be 
drawn towards other contractual pooling vehicles domiciled in Holland, Luxemburg, and 
Ireland, where tax transparent vehicles already existed. Pooling through an ACS is seen 
as having particular attractions for pension funds due to its tax treatment, governance structure, and its flexibility when it comes to accessing different asset classes. 
24. An ACS provides advantages in the form of economies of scale and access to investment 
opportunities that might not be available to individual, smaller, funds.  
25. There are inevitably some drawbacks, most significantly that it incurs some additional 
levels of cost and complexity to deliver the required levels of FCA regulatory assurance. 
Nonetheless, overall it is considered that the advantages outweigh the disadvantages. 
The business case will explore the advantages and disadvantages in more detail. 
26. It is important to stress, that participation by any individual London authority will be on a 
voluntary basis and would not require it to commit either all of its assets or to every asset 
class. However, as noted below, it would be necessary to have at least a minimum critical mass of authorities, and assets, committed in order to accrue sufficient benefit to make 
the start-up costs economic. 
27. As noted above, fund mergers are not required for this structure to operate. 

## Assessment Of Financial Benefits

28. Annual on-going costs of running an ACS have been estimated between 0.01% and 
0.05% of assets under management depending upon the scale of assets managed and the complexity of each asset class. Savings for London LGPS funds were estimated in a previous PwC report (appended to the Leaders' Committee paper of 13 November 2012) to be in the region of £120 million per annum. This estimation was based on close to full 
participation by individual authorities, with total investments of £24 billion. At this scale, 
the costs of running the ACS would be about £4.8 million per annum. It is clear that the costs of an ACS are outweighed by the savings available to such an extent that risks of savings not materialising could be considered minimal. 
29. While the scale of benefit from cheaper overall running costs is significant, it is likely that 
the greater financial benefit will derive from enhanced investment returns. The chart below illustrates the potential additional returns from a Common Contractual Fund (the Irish equivalent of ACS) over a ten-year period and shows that such an arrangement might enhance returns by as much as US$81 million on a US$1 billion portfolio invested in broad market indices over a ten year period. 

## Governance

30. The arrangements for governing a London CIV are complex, and final structures 
(including associated procurement) and decision-making processes will require detailed 
consideration and input from expert legal and financial services advisers. 
31. The PWG propose that a sensible next step would be to engage suitably qualified 
advisers who will assist in formulating a robust business case and formal implementation proposal for consideration by Leaders' Committee early in the New Year and subsequent 
referral to the boroughs to inform their decisions. The business case will set out detailed governance proposals and a timetable to bring the CIV into operation. 

32. There are, however, two key elements of governance on which it would be helpful to have 
the view of members. The first is that a CIV based on the ACS structure, being 
contractual, would require the creation of a FCA Regulated Scheme Operator (likely in 
the form of a Limited Liability company, subject to the specialist legal and financial 
advice) which entity will be responsible for procuring specialist services (such as the 
services of a Custodian, a Depositary, Auditors, Investment Managers, Fund Managers, 
legal advisors etc), and employing staff necessary to support the CIV's operation. The 
second, is the role London Councils should have in collectively representing the interests 
of those boroughs investing in the CIV and in facilitating effective on-going administration 
and support of the arrangements. More detail covering the duties of an Operator are shown in Annex C. 
33. The PWG are of the view that London Councils should have an on-going and close role 
and, as such, the business case would also consider how this should be achieved. Leaders' Committee is asked to endorse this proposal.  

## Procurement Strategy

34. If Leaders' Committee are minded to take the next step in establishing a CIV, the first 
procurement activity would be to engage expert financial services and legal advisers, early indications are that this could be achieved through existing frameworks. 
35. The proposed business case will set out procurement recommendations for future stages 
of implementation as noted at paragraph 31 above. 

## Timetable

36. In the first instance, as noted above, a detailed business case and implementation 
timetable will be prepared with specialist legal and financial advice, before being referred back to Leaders Committee. 
37. Annex D sets out an indicative implementation timeline following on from that decision, 
which suggests a minimum nine to ten-month lead up to investments being made in the CIV by participating authorities. Subject to agreement to proceed from Leaders' Committee at their meeting in December 2013, this timeline will be worked up into more detail, but it serves to illustrate that implementation could happen relatively quickly were members minded to. It is also noted, that the timetable will be impacted by the local 
government elections in London in May 2014. 

## Project Management Team

38. Were members minded to pursue a London CIV, a project manager would be required to 
take forward the work on a full time basis. Their remit will be to lead on the interim arrangements outlined above, in tandem with setting up the FCA authorised company and the ACS structure.  
39.  The project manager would need the support of at least one and possibly two junior 
officers, and members of the PWG technical sub-group will be on hand to assist. 
40. In line with the timetable outlined below it is anticipated that these project management 
resources will be required for up to ten months. 

## Costs

41. Indicative estimates from potential expert advisors suggest that high-level costs 
associated with setting up the CIV, with an ACS structure, are up to £430,000.  
42. As outlined above, resources will be required to manage the project and work on initial 
procurements. This will require the appointment of a dedicated project manager and at least one support officer for up to ten months, with an estimated cost in the region of £200k - £250k.  
43. To date, 20 London authorities have committed in principle to contributing towards a 
designated fund, amounting to £575,000, and it is anticipated that more authorities will agree to contribute towards the costs as plans become more established. 

## Risks

44. At this point, there are two significant risks to be considered; these are outlined in the 
table below, with mitigation strategies. 

|                                                                    |         |        | Risk    | Mitigation                                                |
|--------------------------------------------------------------------|---------|--------|---------|-----------------------------------------------------------|
| 1) Government                                                      | may     | decide | to      | The Chair of London Councils should write to the Minister |
| advising him of the proposed actions by London local authorities   |         |        |         |                                                           |
| seeking reassurances that any expenditure would not be 'in         |         |        |         |                                                           |
| vain'.                                                             |         |        |         |                                                           |
| move towards compulsory CIVs                                       |         |        |         |                                                           |
| or enforced fund mergers, which                                    |         |        |         |                                                           |
| would result in abortive costs to                                  |         |        |         |                                                           |
| London local government                                            |         |        |         |                                                           |
| London Councils should ensure on-going, close dialogue with        |         |        |         |                                                           |
| HM Government with the aim of aligning both parties' objectives    |         |        |         |                                                           |
| for the establishment of a collective London pension fund.         |         |        |         |                                                           |
| 2) Lack of sign up from London                                     |         |        |         |                                                           |
| authorities, or authorities not                                    |         |        |         |                                                           |
| following                                                          | through | on     | their   |                                                           |
| original intent to subscribe                                       |         |        |         |                                                           |
| The preparation of a detailed business case (covering legal        |         |        |         |                                                           |
| structures and procurement arrangements) and implementation        |         |        |         |                                                           |
| timetable, with specialist advice, to be referred back to Leaders; |         |        |         |                                                           |
| and then to boroughs.                                              |         |        |         |                                                           |
| Active liaison with the London boroughs to ensure their views      |         |        |         |                                                           |
| are considered with the aim of meeting their needs and             |         |        |         |                                                           |

45. In light of risk 1, the Chair has written to Brandon Lewis MP seeking to mitigate the risk of 
abortive costs. The Chair has also written to the Chief Secretary to the Treasury, making him aware of the proposals and the way in which their newly established ACS facilities are potentially being used. Copies of these letters are provided at Annex B 

## Recommendations

46. Leaders' Committee is recommended to consider and comment on the matters raised in 
this report and: 
I. 
Indicate support for the establishment of a London LGPS CIV; 
II. 
Agree that London Councils should: 
i. continue to facilitate further work, under the oversight of the PWG, with 
the next step being the engagement of expert legal and financial services advisers and the formulation of a robust business case and formal proposal to proceed with implementation;  
ii. explore, as part of this work, how London Councils can best support 
collective borough interests where those boroughs agree to participate in the ASC and invest in the CIV; 
iii. recruit a suitably qualified Project Manager and any other staff 
required; 
iv. establish a designated fund with contributions from those boroughs 
interested in exploring these proposals; and 
v. maintain on-going dialogue with HM Government relating to the 
Government's review of local authority pensions schemes which may directly impact upon these proposals and their implementation. 

## Legal Implications

47. These are incorporated in the body of the Report.   

## Financial Implications

48. The Director of Corporate Resources reports that, should Leaders' Committee approve 
the recommendation as detailed in this report, London Councils will be able to undertake 
the full range of preparatory work, as outlined. This includes the recruitment and accommodation of up to three posts at Southwark Street and associated preliminary procurement functions. This work will be funded from resources provided by contributing boroughs, for which London Councils will provide a fiduciary role by establishing a designated fund to finance the approved work programme. 

## Attachments

Annex A London Councils response to CLG's Call for Evidence on the Future of the Local 
Government Pension Scheme 
Annex B Letters to Brandon Lewis MP and the Chief Secretary to the Treasury Annex C Duties of the Operator  
Annex D Indicative Implementation Timeline 

## Background Papers

13 March 2012, Leaders' Committee report: 
http://www.londoncouncils.gov.uk/committees/agenda.htm?pk_agenda_items=4796 13 November 2012, Leaders' Committee report: 
http://www.londoncouncils.gov.uk/committees/agenda.htm?pk_agenda_items=5072 
11 December 2012, Leaders' Committee report: 
http://www.londoncouncils.gov.uk/committees/agenda.htm?pk_agenda_items=5109  
14 May 2013, Leaders' Committee report: http://www.londoncouncils.gov.uk/committees/agenda.htm?pk_agenda_items=5252 19 September 2013, Executive report: http://www.londoncouncils.gov.uk/committees/agenda.htm?pk_agenda_items=5353 26 November 2013, Executive report: 
http://www.londoncouncils.gov.uk/committees/agenda.htm?pk_agenda_items=5490 
 

## Call For Evidence On The Future Of The Local Government Pension Scheme Response By London Councils

London Councils represents all 32 London boroughs and the City of London. It is a crossparty organisation that works on behalf of all of its member authorities regardless of political persuasion. We develop policy, lobby Government and others, and run a range of services designed to make life better for Londoners. 

## Introduction

1. 
London Councils members have consistently opposed any compulsory merger of 
borough pension funds due to potentially significant negative impacts on local council tax.  
2. 
This response focuses mainly on alternative ways to achieve scale economies without 
the need for expensive and time-consuming compulsory mergers.  
3. 
Other key messages are: 
- There is a need for better and more comparable data to illustrate those who perform 
well in order to highlight best practice for others. 
- Those funds which are perceived as not doing well should publicly explain their 
position and indicate the reasons for this. 
- Academic evidence on whether bigger is better is inconclusive; London Councils 
advocates a mixed economy providing the benefits of scale, while retaining individual borough choice as the preferred option for change. 
4. 
London Councils Leaders' Committee have led efforts to investigate and establish the 
efficacy and detail of a mutual collective investment approach for London funds. Rather than merger, investigation of this approach has been supported because the following were seen as critical: 
- Retention of the responsibilities of each London Borough in minimising risk and 
maximising returns for their funds delivered through the Trustee responsibilities of Members of Pension Committees in accordance with the Myners principles; 
- Retention of local decision making in relation to asset allocation in order that 
investments are appropriate for each borough's funding level and cash flow position; 
- The recognised relationship between local decision making in relation to the fund and its 
associated returns and deficit and local taxation implications; 
- The statutory responsibilities of local authorities in relation to actuarial valuations and 
pension fund accounts and audit requirements; and 
- The political and managerial ownership of the decisions in relation to the pension fund, 
its associated risks and need for influence over decision-making.   
5. 
London Councils Leaders' Committee considered a report written by PwC that presented 
a model that addressed the concerns highlighted above and indicated possible savings of £120 million per annum from the increased performance and lower costs available through a collective investment approach for boroughs.   
6. 
The proposed model would involve a structure whereby each of the participating 
boroughs would retain autonomy in asset allocation and funding strategy.  There would be a central entity, working within new governance arrangements, that establishes a choice of investment mandates within each asset class, selects fund managers, and negotiates and monitors fee and service levels.  The participating boroughs would set their asset allocation, choosing between a wide range of investments offered.  This would maintain democratic accountability and also provide all of the scale benefits of merger. 
7. 
London Councils Leaders' Committee will receive further advice in the autumn with a 
recommendation to consider proceeding with setting up a Collective Investment Vehicle (CIV) type structure - probably in the form of an Authorised Contractual Scheme (ACS). 
8. 
Responses to the specific questions are provided below. 

## Question 1 - How Can The Local Government Pension Scheme Best Achieve A High Level Of Accountability To Local Taxpayers And Other Interested Parties - Including Through The Availability Of Transparent And Comparable Data On Costs And Income - While Adapting To Become More Efficient And To Promote Stronger Investment Performance.

9. 
London Councils believes that democratic oversight is essential to maintaining the link 
between those who pay the balance of cost of the LGPS (local council tax payers).  In a CIV authorities would still be able to set asset allocation to meet their own funding deficit, maturity and risk requirements.  Liability management would also be possible through hedging instruments.  We would support proper transparency of costs.   
10. 
Investment and funding level metrics should be devised to enable a common 
comparison of each fund, so that the real position about what needs to be addressed can be established.  
11. 
Data on the differences in asset allocation, risk and in the level of past employer 
contributions should be collected to establish what other factors may contribute to current funding levels. 
12. 
London Councils supports approaches that require funds to publish this data so that 
these comparisons can be made.  Additionally, explanations for variances from the median fund should be required so that differences can be put into context. 

## Question 2 - Are The High Level Objectives Listed Above Those We Should Be Focussing On And Why? If Not, What Objectives Should Be The Focus Of Reform And Why? How Should Success Against These Objectives Be Measured?

13. 
London Councils agrees that dealing with pension fund deficits and improving 
investment returns are key objectives.  Current pressures on London boroughs through the Government's deficit reduction programme will sharply focus minds on any increased pension costs that arise in the future, so controlling these issues are important.  Cost reductions and increased investment returns would assist in reducing deficits and thus alleviate the pressures on borough budgets. 
14. 
Transparency is supported and we suggest that this be by means of annual reporting on 
a standardised basis.  The issues reported upon must reflect the threats to boroughs budgets.   
15. 
Success could be measured by the appearance of shrinking deficits and smaller calls on 
council tax. 

## Question 3 - What Options For Reform Would Best Meet The High Level Objectives And Why?

16. 
London Councils Leaders' Committee has commissioned the Society of London 
Treasurers to undertake a survey to gauge interest in establishing a CIV.  The survey results indicate more than 20 London boroughs are willing to join in principle.   
17. 
The management of the CIV would be fulfilled through a lead authority carrying out the 
role, which could be either London Councils itself or a lead borough.  Funding for the lead authority would initially come from participating boroughs, but once established, the CIV would be more than paid for from reduced fees.  The PwC report indicates savings of up to £120 Million per annum.  The lead authority would procure investment advisor(s) 
followed by a transition manager and investment funds/fund managers within each asset class, including alternatives like infrastructure. 
18. 
The CIV would operate by maintaining a "best of breed" selection of funds/ managers for 
each asset class.  These would be well-defined, generally segregated mandates, with the CIV using its buying power to secure lower investment manager fees.  The CIV would be responsible for day-to-day governance in relation to each selected manager, including, in conjunction with the appointed investment advisor, performing necessary 
due diligence for the chosen managers. This would include quarterly meetings with 
managers, providing quarterly reports for borough Pensions Committees that summarise 
performance and any other pertinent due diligence.   
19. 
Boroughs would be free to choose which, if any, manager to use from the CIV.  
Boroughs would not be compelled to use any CIV manager, but clearly, best-in-breed managers at the lowest cost obtainable should make the selection of managers desirable.  One of the first asset classes to be investigated would be infrastructure. 
20. 
Boroughs would retain their own custodians, control over asset allocation, and 
accounting responsibilities, although manager related information would be supplied by the CIV.  In time, the CIV could also be used to provide any other officer-related investment duties that boroughs voluntarily wished to delegate, for instance if key staff left a particular borough - this could extend to preparing draft reports for all investment related matters for the local pensions committee, using a common custodian, preparation of accounts, etc. 
21. 
If and when appropriate, funds/managers would be deselected and recommendations for 
change would be made.  Boroughs would be free to focus their investment governance budget on the asset allocation - the key driver of investment performance. 
22. 
The detailed proposal for setting up the CIV will be reported to a future meeting of the 
London Council Leaders.   
23. 
Any other models that remove asset allocation decisions from boroughs would mean that 
they could end up with an investment strategy that is not appropriate to that funds solvency level, maturity profile or risk appetite for volatility.  Different boroughs have general finances which differ in strength and in terms of the flexibility of variances to their budgets, so accordingly risk appetites will differ.  That is why a CIV is better than merger or super-pool alternatives. 

## Question 4 - To What Extent Would The Options You Have Proposed Under Question 3 Meet Any Or All Of The Secondary Objectives? Are There Any Other Secondary Objectives That Should Be Included And Why?

24. 
We believe that the Collective investment vehicle  and voluntary merger of administration 
will meet all of the Secondary objectives as set below: 
- **To reduce investment fees –** A collective investment vehicle would reduce fees by 
increasing the scale of investment mandates offered to investment managers and thereby reducing fees.  Scale fee reductions would also be available in a more noticeably geared fashion when investing in alternative assets, as the current fees for these asset classes are comparatively high.  The option of using an Authorised Contractual Scheme would allow ring-fencing of investments so that direct investments could also be made, further reducing fees.  This type of scheme is being promoted word-wide by HM Treasury as the best way to pool pensions assets and to attract investment funds to the UK. 
- **To improve the flexibility of investment strategies –** The maximum investment 
flexibility arises when investment opportunities are available at the right cost.  If a fund desires a particular asset class for diversification, return or volatility control but those asset management fees are too expensive then an investment might not be made.  A collective investment vehicle would have the scale necessary to achieve the lowest fees but at the same time funds would be free to still hire or retain their own investment managers where they felt these managers would produce superior 
risk adjusted returns.   A collective investment vehicle would also be able to provide access to liability hedging strategies such as managing the exposure of liabilities to interest rate or inflation changes.  Accordingly a collective investment vehicle would give boroughs the opportunity to improve the flexibility of investment strategies. 
- **To provide for greater investment in infrastructure –** A collective investment vehicle 
would enable investment in infrastructure, social housing and other alternatives asset classes that provide the right mix of risk adjusted returns, diversification benefits and suitability to funds' liability and maturity profiles.  This would result in a lower total charge falling on borough taxpayers.  Costs of investing would also fall as a collective investment vehicle would have the scale to become primary or general 
partners in many alternative investments. 
- **To improve the cost effectiveness of administration –** London Councils understands 
that there is a shared pensions administration service between Wandsworth, 
Camden and Merton that has already produced savings.  We also understand that other boroughs are investigating joining this arrangement 

- **To provide access to higher quality staffing resources –** the collective investment 
vehicle would enable greater access to high quality directly employed staff and to best of breed fund managers. 
- **To provide more in-house investment resources –** A collective investment vehicle will 
employ staff with investment expertise.  As the collective investment vehicle grows so the skills and expertise will also grow.  These skills will also be available to other funds that wish to avail themselves of them and could over time lead to the replacement of some external management.  The outcome should be better investment returns, lower costs and better outcomes for taxpayers. There is however the issue in London of what an appropriate salary might be for these public sector staff and the fact that the collective investment vehicle would be competing with the private sector for the same skill set. 

## Question 5 - What Data Is Required In Order To Better Assess The Current Position Of The Local Government Pension Scheme, The Individual Scheme Fund Authorities And The Options Proposed Under This Call For Evidence.

25. 
Investment and funding level metrics should be devised to enable a common 
comparison of each fund, so that the real position about what needs to be addressed can be established.  As a first step these metrics should consist of a common funding level comparison, investment performance and fees.  In our experience when dealing 
with policy issues that are this complex, it is likely that once this data is collected it will become apparent that other comparisons and data sets are required.  We would expect the Secretary of State to gather this evidence and publish it for open challenge. 

ADMINISTRATOR/ 
SERVICE
ACS 
OPERATOR
CUSTODIAN
DEPOSITORY
PERFORMANCE 
MEASUREMENT
TRANSFER AGENT
AUDITOR
Authorised 
Corporate Director
INVESTMENT 
MANAGERS
LEGAL
INVESTMENT MANAGERMENT
Investment Strategy and Risk Parameters review or for new funds
x
Appointment of an asset manager for the fund 
x
Review of Reports flowing from opeartional teams
x
Day to day decisions about composition of funds
x
Entering contracts with brokers and other market participants
x?
x?
Trade processing i.e. trade matching/confirmation with broker, provision of trade instruction to custodian
x
Portfolio accounting i.e. maintenance of investment books and records
x
Pricing and valuation (for internal monitoring /management  purposes
x?
x?
Corporate actions and proxy voting
x
Derivatives servicing and collateral management to the extend relevant
x
x
Data management e.g. setting up static data such as approved brokers, client date e.g. base currency, details of relevant custodian and restrictions on client account
x?
x?
Client reporting e.g. performance measurement , risk analytics, investment reporting
x
Settlement management
x
Income and tax reclaim collection
x

## Options For Service Outsourcing

ADMINISTRATOR/ 
SERVICE
ACS 
OPERATOR
CUSTODIAN
DEPOSITORY
PERFORMANCE 
MEASUREMENT
TRANSFER AGENT
AUDITOR
Authorised 
Corporate Director
INVESTMENT 
MANAGERS
LEGAL
GENERAL ADMINISTRATION Obtaining and maintaining FCA authorisation for new sub fund launches , prospectus updates
x
Monitoring investor cashflows throughout the fund structure
x
The execution of relevant documents or contracts on behalf of the ACS
x
Dealing services, i.e. dealing with orders for subscriptions and redemption of units in the ACS by investors, settling deals, dispatching trade confirmations , receiving and making payments , conducting switches and conversions
x?
x?
x?
Box management and fulfilment
?
Fund accounting services, including valuations, pricing, and tax returns
x
Registrar services e.g. maintaining the register of unit holders and servicing unit holders (e.g. dispatch of reports and accounts, notice of meetings, holding unit holder meetings etc.
x
Paying out fund distributions to investors
x
x
Record keeping (including holding any personal date of investors as relevant)
x?
x?
Call centre function, and dealing with investor queries  and complaints
x
Regulatory compliance monitoring
x
x
Conduct of in specie transfers
x?
x?
x?
Appointment and oversight of auditors for the ACS
x
MARKETING Maintaining of the overall marketing and distribution strategy for the ACS and carrying out marketing plans
x
x
Obtaining and maintaining relationships with key investors and distributors
x
x
Entering into relevant contracts, where relevant
x
Maintaining general marketing materials, investor updates etc.
x
x
Maintaining any relevant websites
x
x
DISCLOSURE
ADMINISTRATOR/ 
SERVICE
ACS 
OPERATOR
CUSTODIAN
DEPOSITORY
PERFORMANCE 
MEASUREMENT
TRANSFER AGENT
AUDITOR
Authorised 
Corporate Director
INVESTMENT 
MANAGERS
LEGAL
Disclosure Notifications to investors, Fundamental, significant, etc. 
x
x
Other regulatory disclosures e.g. TCF, pricing, product governance etc.
x
x
DEALING Dealing window issues and monitoring
x
x
LIQUIDITY Managing the funds Liquidity
x
x
INVESTMENT RESTRICTIONS Compliance monitoring on investment restrictions e.g. derivatives risk monitoring
x
x
OUTSOURCE PROVIDER MONITORING Management of outsource providers and liability for their acts or omissions
x
BOARD/ COMMITTEE FACILITATION
Investment Committee
x
Risk Committee
x
Board of Directors
x
Managing Director
x

## Indicative Implementation Timeline

Planning
Creation
Finalise Creation
Launch
T-9 months
T-8 months
T-1 month
Agree project governance 
(workshop)  
Legal documents review 
process
Finalise legal documents
Appoint external advisors
Obtain fund authorisation
Submit application to 
regulator (up to 6 months)
Confirm fund structure and 
operational requirements
Finalise operational set up
Activities
Deliverables
Start tax ruling/opinion & any 
other tax work
Obtain tax ruling/opinion & 
investor documentation
Drafting & exchange of  legal 
documents
Obtain investor 
documentation
Finalise transition plan
Identify tax work involved
Set up of operational 
structure (inc. AML/KYC)
Obtain documentation for 
transition
Transition planning
1. Project plan & other project 
documents
1. Application submission
1. Finalise legal documents
2. AML/KYC documentation
2. Tax rulings/opinions
2. Draft legal documents
3. Complete list of reporting 
requirements
3. Fund authorisation 4. Set up of custody accounts
4. Distribution list for reporting
4. Confirmation of tax work 
required
5. Set up on Fund 
Administration platforms
5. Investor documentation
6. Finalised legal documents 7. Final transition plan
Post Implementation
Launch
Complete production / 
launch activities
Execute asset transfer
Calculate first NAV & issue 
reports
Post-Implementation 
meeting
| 1. Complete transfer of assets   |
|----------------------------------|
| list                             |
| 2. Contract notes & first NAV    |

## Leaders Committee Growth Deal For London Item No:   5

 Report by: 
 
Job title: Doug Flight Head of Strategic Policy Date: 
 10 December 2013 

 Contact Officer: Doug Flight Telephone: Email: 020 7934 9805 Doug.flight@londoncouncils.gov.uk 
 
 
Summary Leaders' Committee on 12 November 2013 endorsed the agreement made with the Mayor of London to advance opportunities for devolution to London through a Growth Deal. The specific proposals cover: 

- 
Welfare to Work including Skills 
- 
Housing Investment and Supply  
Subsequently, the London Enterprise Panel has also given its support to the headlines which will form the core of a distinct section of the draft Growth Deal submission seeking new 'levers and influence'.  This submission is currently being finalised in collaboration with the GLA, in preparation for the deadline on 19 December 2013.  

 
It is anticipated that informal feedback from Government on the proposals 
will begin to emerge early in the New Year, and the focus will move quickly towards preparation of a more detailed final submission for March 
2014.  
 
In responding to the initial feedback from Government and structuring a 
detailed submission, London is likely to be challenged to calibrate the 
scale of its ambitions more precisely in relation to delivering better 
outcomes, and to demonstrate a readiness to deliver on the proposals 
through borough groupings.  
 
Recommendations Leaders Committee is asked to: 
 
1. Note the 'in principle' endorsement of the London Enterprise 
Panel for the headline Growth Deal proposals, as agreed between 
London Councils and the Mayor. 
2. Note that the initial response from Government is likely to lead to 
the need for finer calibration of the scale of our ambitions in 
relation to delivering better outcomes and a need to demonstrate 
a readiness to deliver on the proposals through borough groupings.  
3. Agree that the Chair and leading members work with officers to 
develop a more detailed and costed case early in 2014, drawing on the expertise of senior officers in member authorities.    
 

## Growth Deal For London Introduction

1. This report sets out the next steps in negotiating a Growth Deal for London, as part of our 
overall programme in pursuit of opportunities for financial and wider devolution to London. The background to this broader programme of work is set out in Appendix A. 
 

## Growth Deal Approach

 
2. The option of pursuing a Growth Deal arose from a joint approach with the Mayor of London, 
to the Chancellor, in July 2013, endorsed by the London Congress. The Chancellor's reply 
suggested discussing the proposals as part of the recently established Growth Deal process.   
 
3. Following the steer given at the Congress on 9 July 2013, London Councils engaged in 
discussions with the GLA group around the components of potential London 'asks' in respect 
of further devolution to the capital. London Councils' proposals to the GLA were developed from discussions with established London borough partnerships. They were intended to 
shape a proposition to Government that: 
a. Enables boroughs and groups of boroughs to develop tailored activities and 
interventions most likely to boost jobs, skills, competitiveness, infrastructure and homes in agreed localities. 
b. Aligns this freedom with the strategic role of the Mayor and the wider GLA family, 
including the London Enterprise Panel and the Homes for London Board.  
 
4. These negotiations led to an agreed draft package of proposals which could be advanced 
through a London Growth Deal and help deliver tangible outcomes for London in relation to: 
- 
Welfare to Work including Skills  
- 
Housing Investment and Supply 5. These proposals were put to the Congress Executive meeting on 29 October 2013, where 
the Mayor of London and London Councils Executive formally agreed them as framing the scope of an approach to Government through the Growth Deal process. 
6. The recommendations of the London Finance Commission have already been considered by 
the LEP and will form a component of their Growth Deal submission.  In parallel, these 
broader ambitions around financial devolution are being pursed through the City Centred work with the Mayor and the Core Cities, as reported to Leaders' Committee last month.  

7. Leaders' Committee on 12 November 2013 endorsed the agreement made with the Mayor of 
London to advance opportunities for devolution to London through a Growth Deal. The 
specific proposals cover: 
- 
Devolution to improve welfare into work provision; integrated welfare management, skills and employment programmes. (See Appendix B) 
- 
Changes in national housing investment policy, matched by a more co-ordinated 
London government offer addressing cash, consent and capacity of the building industry. (See Appendix C) 
 
8. In both cases the proposals describe a package of measures that:  
 
- 
Involve devolution to London as a whole in order to accelerate economic growth; 
- 
that allow for pan-London co-ordination and strategy; 
- 
ensure effective management at the right level through the collaboration of groups of 
boroughs 
9. The proposals around welfare, work and skills are designed to secure sufficient devolution 
for London government to work through functional partnerships of boroughs, to provide an integrated and responsive programme that tangibly increases the number of people moving 
from welfare into sustainable work. 10. The housing proposals are designed to secure sufficient devolution for London government 
to work through functional partnerships of boroughs, to best co-ordinate initiatives and drive 
a significant and sustained increase in housing supply.  
 

## Recent Developments

 
11.  The LEP Skills & Employment Working Group met on 14 November to consider the first 
package of proposals. After considering the scope of the proposals, and examining the benefits of delivering particular elements at pan-London and borough level, the Group 
provided a number of comments and suggestions on how a devolved model might work.  A 
follow-up workshop is planned early in the New Year to consider the detail behind the proposals.  
 

12. The full London Enterprise Panel met on 26th November 2013 and also gave its support to 
the headline proposals. These proposals will now form the core of a distinct section of the 
overall draft Growth Deal submission seeking new 'levers and influence'.  The Homes for 
London Board met on the same day and reviewed the suggested elements of the housing 
proposals. 
 

## Next Steps

 
13. The draft submission is currently being finalised in collaboration with the GLA, in advance of 
the deadline on 19 December 2013. 
 
The subsequent steps in the Growth Deal process are: 

- 
January and February 2014: Government feedback on draft submissions; 
- 
March 2014: final LEP submissions; 
- 
July 2014: negotiations complete; funding offers made; 
- 
April 2015: LEP and government implement agreements. 
 
14. It is anticipated that informal feedback from Government on the proposals will begin to 
emerge early in the New Year, and the focus will move quickly towards preparation of a more detailed final submission in March 2014. 15. In responding to the initial feedback from Government and structuring a detailed submission, 
London Councils, along with the GLA, will face questions on the precise scale of our offers 
and ambitions in relation to delivering better outcomes. 16. To develop robust answers, London Councils will need to work with the GLA, boroughs and 
groups of boroughs to marshal evidence, refine projections and develop arrangements that 
will work well at the appropriate spatial level, including through borough groupings. To be effective, this stage of the work will need to draw on substantive input from boroughs and borough groupings and is likely to require high level support from Leaders.  
 
17. It is also likely that we will be asked to provide a clearer picture of how the governance and 
management arrangements might operate across the tiers and geographical groupings. In essence, we will be asked to demonstrate a readiness to deliver on the proposals through borough groupings. 
 

## Conclusion

18. Following the endorsement by Leaders' Committee, the Mayor of London and the LEP, the 
high-level scope of the Growth Deal proposal negotiated with the GLA is at an advanced 
stage. A draft submission conforming to these agreements is expected to be ready for submission shortly, in advance of the 19 December 2013 deadline.  
 
19. It is anticipated that informal feedback from Government on the proposals will begin to 
emerge early in the New Year, and the focus will move quickly towards preparation of a more detailed final submission in March 2014.   This process will rapidly lead to consideration of a more precise calibration of the scale of our ambitions in relation to delivering better outcomes and how to demonstrate a readiness to deliver on the proposals through borough groupings. 20. Leaders' Committee on 11th February 2014 will have the opportunity to consider these 
questions and provide guidance on the next steps prior to the final submission in March 
2014.  
 
 
Leaders Committee is asked to: 

1. Note the 'in principle' endorsement of the London Enterprise Panel for the 
headline Growth Deal proposals that have been agreed between London Councils and the Mayor. 
2. Note that the initial response from Government is likely to lead to the need for 
finer calibration of the scale of our ambitions in relation to delivering better outcomes and a need to demonstrate a readiness to deliver on the proposals through borough groupings.  
3. Agree that the Chair and leading members work with officers to develop a 
more detailed and costed case early in 2014, drawing on the expertise of senior officers in member authorities. 

## Financial Implications For London Councils None Legal Implications For London Councils

As work to develop robust shared governance structures for financial devolution continues any recommendations would be subject to detailed legal advice.  

## Equalities Implications For London Councils

There are no direct equalities implications for London Councils as a result of this paper. 

 

## Attachments

Appendix A: 
Background Note 
Appendix B: 
Work, Skills and Welfare proposals 
Appendix C:   Housing proposals 

## Background Note On Financial And Wider Devolution Work

4. 
In December 2012, Leaders' Committee considered linked reports on the work of the 
London Finance Commission, the Mayor's 2020 Vision and the longer-term prospects for 
financing local government in the run up to the 2013 Spending Round and beyond. Subsequently, Leaders' Committee has considered and agreed a series of reports on the Finance Commission and wider opportunities for devolution. 
5. 
This work led to agreement on joint activity to pursue financial and wider devolution to London at the London Congress meeting on 9 July 2013.  Immediately following Congress, 
the Mayor of London and Chair of London Councils wrote jointly to the Chancellor of the Exchequer, formally seeking engagement in a dialogue on financial and wider devolution, in the context of securing London's contribution to growth.  
 
3. The London Finance Commission, chaired by Tony Travers, made a number of considered 
recommendations for devolved tax and investment mechanisms for the capital, which could provide a robust platform for promoting growth and prosperity.    The Commission 
considered the question of the appropriate spatial level for each of the individual elements of financial devolution, and set out principles for shared decision making about the use of any 
such revenues. London government partners are actively pursuing the LFC agenda, with the aim of securing traction at the national level. 
4. Groupings of local councils outside London are now in the advanced stages of negotiating 
City Deals, with a view to driving growth, employment and competitiveness, building in a range of freedoms, incentives for investment and mechanisms for sharing the proceeds of growth. These developments are typically centred on combinations of authorities whose areas make up functional economic geographies. 
 
5. Lord Heseltine's report on stimulating economic growth, No Stone Unturned, called for 
greater local leadership of the drive to lift growth and had specific proposals around a single pot for growth.   In announcing the Spending Review 2013, the Chancellor set out a challenging funding settlement for London government in 2015/16. He went on to outline the Government's proposals for promoting growth which include a specific response to the proposed 'Heseltine' single-pot. 
6. Local growth fund guidance, published in July, indicated that "it is the Government's intention 
that the London Local Enterprise Partnership can, if it wishes, negotiate a Growth Deal with the Government and that any deal would need to reflect London's unique circumstances".  
This provides the beginnings of a more devolved approach but is unlikely to match the scale 
of London government's ambitions for the capital. 7. 
The whole-place community budget pilot programme, which included West London 
(Westminster, Hammersmith and Fulham, Kensington and Chelsea), produced business cases demonstrating clear benefits from a place based approach to integrating a wide range of services, including growth related components such as work and skills.   
 
8. 
Following on from this work, a number of boroughs are working with the Government's new 
Public Services Transformation Network, to share experience and tap into Whitehall 
expertise. The West London Alliance has been given approval to work up a growth based 
proposal and a south London consortium (Lewisham, Lambeth & Southwark) is bringing forward proposals for an integrated work, skills and welfare offering.  There are synergies between the ambitions for integration of  budgets  based on 'place' and the City Deal approach of driving growth through a shared approach to investment and mechanisms for 
sharing the proceeds of growth.  
 
9. 
In taking forward "Growth Deals" or "City Deals", national government is likely to require a 
single agreement for the whole city. Such an agreement is expected to be based on groups of boroughs working together. Government may recognise the greater effectiveness that can result from working at the level of borough partnerships. However, government is likely to 
expect common minimum standards of governance before agreeing to significant devolution. The relationship between partnerships of London boroughs and the GLA will also be important in shaping a single London government proposal. To take forward the proposition, it will be necessary to identify, in governance terms, how the essential contribution of all tiers 
of London government can be brought together. 

## Welfare To Work - London Growth Deal Proposals

What follows is a list of potential joint proposals and corresponding commitments, intended to increase the numbers of people moving from welfare to work. It is broken down into skills and employment & welfare for ease of reference. These areas are clearly interrelated and the Growth Deal is an opportunity to better integrate employment, welfare and skills provision. 

## Skills London Ask

1. Responsibility and budget holding of the £550m adult skills budget in London devolved to 
groups of boroughs and LEP, starting with underspend. To include: 
o Varying funding rates to incentivise provision to meet local economic & employer 
needs, including increased funding to work with SMEs; 
o Commissioning some aspects of provision to address unmet need due to market 
failure. 
2. Change incentives for FE providers including:   
o Increase the proportion of funding for FE providers dependent on learners' 
progression into work or further learning (any underspend retained locally); 
o Reform the Innovation Code so providers can respond more quickly to local business 
needs. 
3. Locally relevant labour market information to inform providers' decisions and better, more 
accessible data on learner outcomes and destinations to inform prospective learner and 
employer choices.  
4. A co-commissioned national careers service that reflects local needs, with a core London 
offer but local flexibility. 

## London Offer Groups Of Boroughs:

1. Provide an interface with businesses, particularly SMEs, to articulate employer demand 
across functional economic areas;  
2. Play a strategic brokerage role, bringing employers and skills providers together to align 
skills provision with local economic need and opportunity; 
3. Contribute to informed and accessible labour market information and better learner outcome 
and destination information, working with the LEP; 
4. Use all the above to vary funding rates, re-direct underspend and monitor provision to ensure 
local responsiveness. 

## Lep:

1. Develops pan-London strategic intelligence for employment and skills to inform provision; 
2. Coordinates provision for some higher level skills where specialist hubs serve learners from 
across London and beyond; 
3. Compiles labour market and learner outcome information into a London-wide database, 
searchable at the local level, working with boroughs, employers and providers; 
4. Develops a core London offer as part of the national careers service, with boroughs. 

## Outcomes

1. Better alignment of skills provision with employers' needs, resulting in: 
- 
Reduction in skills gaps reported by London employers (from 15%);  
- 
Increase in learner employment rate across London (from 37%); 
- 
Reduction in underspend in the medium term. 

## Employment And Welfare London Ask

1. A single funding pot for employment support devolved to groups of boroughs, made up of: 
- 
JCP Flexible Support Fund (£19m pa) 
- 
Work Programme (£24m pa) 
- 
Work Choice (£10m pa) 
- 
Future families programme (£8.5m pa) 
- 
Youth contract (£4.4 m pa) 
- 
Work Programme Completers Pilot (£12.5 m pa estimate) 
2. Initial focus could be on underspend of key programmes 3. Investment agreement with HM Treasury and DWP to allow local re-investment of benefit 
savings locally if agreed targets are met; 
4. Alignment of JCP administrative & other commissioning boundaries with functional economic 
areas; 
5. Improved data sharing between key partners. 
6. Government to agree the range of support to be delivered through local integrated Universal 
Credit provision and confirm the central funding available for this support by summer 2015. 
7. Government agreement that all budgets used for local support services for Universal Credit 
will be held by London boroughs (or groups of London boroughs) and that any proposals to 
ensure diversity of provision - if enacted - are managed by London boroughs and not by 
central government. 

## London Offer Groups Of Boroughs:

1. Provide integrated employment support offer across functional economic areas that: 
- 
draws in other local support services and makes the best use of specialist providers; 
- 
provides local one-stop 'employment, skills and welfare management gateways' to assess claimants' needs and ability to access Universal Credit and employment; deliver or commission tailored local programmes that address these needs and reduce benefit dependency and barriers to employment; 
- 
delivers a multi-agency "wrap around" approach for individual needs that integrate 
provision in complex cases, learning from the Troubled Families approach and is 
sensitive to local market opportunities and challenges;  
- 
outperforms nationally commissioned programmes for the most disadvantaged 
Londoners, building on existing practice and expertise. 
2. Provide an improved, co-ordinated job brokerage service for employers that reduces 
bureaucracy and interactions with public agencies; 
3. Commit to better data sharing and improved transparency around performance. 4. Create provision for groups of boroughs to align Jobcentre Plus boundaries and operations 
with locally led programmes. 

## Lep:

1. Develops pan-London strategic intelligence for employment and skills to inform provision; 
2. Benchmarks provider performance by developing a central data base and setting clear 
minimum performance standards;  
3. Receives progress and performance reports from providers of nationally commissioned 
programmes at London and sub-regional levels;  
4. Monitors employer satisfaction with employment support and job brokerage services e.g. in 
annual business survey. 

## Outcomes

1. Increase the proportion of long-term unemployed people getting & retaining a job for six 
months; 
2. Increase employer satisfaction with employment providers. 
3. End 'cold referrals' between organisations by delivering a more personalised, wrap-around 
service. 
4. Optimise roll out of Universal Credit. 
5. Reduce benefit/Universal Credit spending: 
a. Increase in number of long term unemployed people accessing jobs; 
b. Increase in number of claimants with complex needs accessing jobs. 
What follows is a list of the headlines for joint proposals and corresponding commitments by London government, intended to increase the numbers of people moving from welfare to work, that are proposed for inclusion in London's LEP Growth Deal submission to government. 

 

## Housing Delivery - London Growth Deal Proposals

What follows is a list of the headlines for joint proposals and corresponding commitments by London government, intended to increase housing delivery, that are proposed for inclusion in London's LEP Growth Deal submission to government. 

## London Ask

1. Flexibility to allow London to make the most of financial resources: 
- 
Removing housing revenue account cap restrictions to permit borrowing in line with the 
prudential code;  
- 
Removal of HRA from Public Sector Net Cash Requirement (PSNCR) in order to 
establish local authority HRAs as public corporations for accounting purposes in line with 
European accounting practice; 
- 
Introducing an "earnback" scheme following the Manchester model for the housing element of benefit payments funding investment through reduced future housing costs.  
a. To include assessment of a more focused scheme allowing shifts in market area 
funding caps where this leads to a direct and measureable reduction in public spending. 
- 
Joint exploration of the opportunity for expansion of building for shared ownership using funding vehicles that allow more return on public investment and increased institutional investment. 
 
2. Flexibilities that will allow London to optimise housing development capacity: 
- 
Freedom for boroughs to apply pre-commencement conditions at different stages in the 
development process so that they are more relevant and proportionate; 
- 
Freedom to phase the staging of Community Infrastructure Levy (CIL) and S106 
payment, so lowering viability thresholds;  
- 
Reduce the number and complexity of the non-planning consent regimes required for 
new house building;  
- 
Permitting full cost recovery on major planning applications in order to fund multi borough planning support teams. 
 
3. Powers and flexibilities that will allow London to maximise land supply: 
- 
Transferring the surplus Government land portfolio to London Government (probably the 
Homes for London Board) as an alternative to proposals for transfer to the HCA in the rest of England; 
- 
Agreement to jointly research and develop a sustainable form of undeveloped land tax 
within an agreed timetable and to pass permissive legislation to be enacted once an agreed approach has been delivered. 

## London Offer

1. Offer long term volume contracts to house builders on condition that they dramatically 
expand their capacity to deliver more housing; 
2. Collaboration by boroughs across natural housing markets within London to better match 
developer demand and contract needs; 
3. More effective use of bond markets and other financial vehicles to ensure long term 
funding through aggregating borough funds and partnership with GLA; 
4. Fast-track planning introducing sub-regional special planning teams to accelerate 
planning process; 
5. Create a standardised scheme to allow payment to be delayed for public sector land 
pending homes being built on site are sold, where this can make development viable; 
6. A 'pre-package' scheme to attract new SME builders to develop small plots; 7. Planning covenants used to ensure development is for rent over 10-20 years, so 
reducing land speculation; as recommended by Montague Report; 
8. London government support for institutional private rented sector expansion. 

## Appendix D: Financial Devotion - Progress Report (Congress Executive)

Following publication of the London Finance Commission Report in May, below is a summary of activity which has been undertaken to deliver our shared campaign objectives of greater financial freedoms and wider public service autonomy. This paper covers: 
 

i. 
Update on activity following publication of the LFC 
ii. 
Aims and launch of the City Centred campaign 
iii. 
Commission for Cities and Growth 
_________________________________________________________________________ 
 
i. 
London Finance Commission Report - update 
 
- 
The Mayor and London Councils accepted the recommendations of the London Finance 
Commission Report and the bold proposals for fiscal devolution to London government. As the report alone will not persuade Government to fundamentally alter its relationship with London, follow-up work has been vital to sustain pressure and media coverage; - 
Following the report's publication in May this work has to date been taken forward via a series of meetings, briefings and media coverage; - 
Tony Travers has been leading on a majority of meetings and has met with a number of ministers (Lord Deighton, Greg Clark, Jo Johnson), shadow ministers (Hilary Benn, Jon 
Cruddas), MPs and senior officials at HMT and CLG. The response to the report has on the whole been positive.   GLA and London Councils officials  have also respectively, had informal contact with CLG and Treasury officials; 
 
- 
Tony Travers has also drafted several articles on the merits of the LFC proposals, and the Mayor has also referred to the campaign in interviews and articles; 
- 
On 3 July a debate was held in the Lords (which peers were briefed for) on the LFC and 
London MPs were also sent a briefing in advance of a debate on 'Funding for Local Authorities' on 10 October; 

- 
The GLA and London Councils are also beginning work on the practicalities of fiscal 
devolution, including governance; 
 
- 
The campaign element of the LFC work is now being taken forward as part of the new 'City Centred' Campaign.   
 

## Ii. City Centred Campaign

 
- 
The Core Cities Cabinet (representing Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield), Mayor of London and Chair of London Councils met 
on 4 September and agreed to build an 'alliance for devolution' by participating in a campaign to achieve greater financial autonomy for the Core Cities and London; - 
The campaign, **'City Centred'** includes a number of key messages and priorities with the 
intention of securing a pledge to implement fiscal devolution included in the 2015 general election manifestos. In the long term this could potentially lead to more a more comprehensive devolution of responsibilities to cities and other local authorities; - 
On 1 October the Mayor of London, Cllr Ravi Govindia (London Councils) and Sir Richard 
Leese (Core Cities Group) launched the campaign in Manchester. The launch received good 
pick up in the London media (Evening Standard / BBC London) and the national press (FT) as well as in the regions. It has also received coverage in various trade papers such as the 
MJ and LGC.  

## The City Centred Campaign Messages Are:

- 
Cities need freedom to invest to drive the national economy - together London and 
the Core Cities equal more than half the English economy and half its population, whilst cities internationally are on the rise. Existing centralised funding models are ineffective in supplying the investment cities need to maximise their growth potential; - 
Empowered cities can be more competitive and can be incentivised to grow 
faster - England is one of the most centralised states in the world and its cities need more 
freedom to develop a competitive environment and create jobs. Only seven per cent of tax 
paid by London residents and businesses is redistributed directly by locally elected bodies 
(the Mayor and borough councils), while the majority of London government's budget is received through central government grants; 
 

- 
This contrasts with other world cities; only 31 per cent of New York's budget comes from central grant, 25 per cent in Berlin, 17 per cent in Paris and eight per cent in Tokyo. In most developed countries, top cities usually outperform the national economic average, yet 
in the UK only London consistently does so, which suggests that the Core Cities' potential remains unexploited. If their economies were unlocked just to meet the national average, it could equal at least £1.3 billion additional growth into the national economy; 
 
- 
Local leadership delivers better results - currently around 95 per cent of all taxes 
raised in a city go directly back to government coffers, with money coming back with strings attached. Greater control for cities of taxes raised locally would deliver more power to join 
up public services and plan for future needs, as city governments are best placed to create jobs and free up spending. The findings of the London Finance Commission set out how this would provide the incentive and the ability for cities to become financially self-sustaining, 
increasing the tax base and enabling cities to reduce demand on public services and spending in the long term. The campaign also proposes the ability to raise smaller, new taxes following democratic processes such as elections and public consultation. 

## What Changes Are We Calling For?

 
- 
The campaign proposes devolving the full suite of property tax revenues streams - this 
includes council tax, stamp duty land tax and business rates - with the ability to reform 
those taxes while retaining prudential rules for borrowing for strategic capital investment. This will provide stable and continuous funding for prudent investment, moving away from ad hoc financing for specific projects; 
 
- 
100 per cent of business rates should be devolved to the Core Cities and London government which will take responsibility, with appropriate checks and balances, for the timings of revaluations, discounts, tax breaks and potential Enterprise Zone-style interventions. Core Cities 
and London government would also set the business rate multiplier in consultation with key stakeholders and in line with a new system fully protecting ratepayers from increases perceived to be unreasonable; 
- 
The campaign also proposes the ability for London and the Core Cities to introduce smaller new 
taxes following public consultation and scrutiny (a power now being introduced in Scotland); while locally-set charges should be the norm with central controls removed and local authorities 
able to recover full costs; 
 
- The campaign proposals are entirely in line with the Government's localism agenda and 
their commitment in the 2010 Coalition document which states: "We will promote the 
radical devolution of power and greater financial autonomy to local government and 
community groups. This will include a review of local government finance."; 
 
- 
None of these proposals need be restricted to the core cities and London; they could be adopted more widely in English local government.  

## Next Steps

- 
The Mayor's Office, London Councils and the Core Cities Group have devised a lobbying strategy to influence politicians and officials of the merits of the campaign. A letter from the Mayor, London Councils and the Core Cities Group will shortly be sent to all London and Core City MP's to inform them of the launch of the campaign and a series of meetings is being planned with politicians, officials and key opinion formers. A media strategy and business engagement strategy is also being developed.  

## Iii. Commission For Cities And Growth

- The Core Cities Group has also commissioned an independent inquiry into how best to enable 
England's major cities to drive growth and respond to the fiscal and economic challenges of the future; - It will be chaired by Jim O'Neill, retiring Chairman of Goldman Sachs Asset Management, and 
will be hosted and run by RSA 2020 Public Services. It has the support (including a financial 
contribution) of London Councils and the GLA. It will also have a range of private sector partners; 
 
- The Commission will complement recent developments in relation to devolution to cities, 
including: the Heseltine report; City Deals; Community Budgets; the Single Growth Fund; LFC etc; - The Commission will develop an overarching plan for supporting city led growth and propose 
specific and practical mechanisms that can help make this a reality.  In doing so it will 
engage with Whitehall, business and the political parties in order to generate broad support for its proposals and to lay the policy foundations for the next stage of devolution to cities, post 2015; 
 
- The Commission will be launched on 28 October. Its research and engagement will take place 
during the autumn and winter of 2013 and the spring of 2014. The Commission's final report will be published in summer of 2014.   

## Leaders' Committee Local Government Finance - Key Issues    Item No:  6

Report by: 
Hugh Grover 
Job title: 
Director, Fair Funding, Performance and Procurement 
Date: 
10 December 2013 
Jon Rowney  
Contact Officer: Telephone: 
020 7934 9935 
Email: 
jon.rowney@londoncouncils.gov.uk 

 
 
Summary 
The financial outlook for London local government has become even more challenging than previously anticipated. Analysis by London Councils shows that on the current trajectories for spending power (total income) and service demand, London local government could see a potential funding gap of £3.4bn by 2020 - a 
shortfall of 31 per cent. At the same time, the local government finance system has undergone 
significant reform, which has delivered elements of incentive and reward, but at the same time has led  to increased levels of risk and volatility. 
This report summarises the key trends within local government finance and identifies the key opportunities and risks for London local government.  
 
 
Recommendations 
Leaders Committee is invited to note and in particular, to provide guidance on the issues raised in paragraph 29 of this report. 

## Local Government Finance Update Introduction

1. 
At its meeting in December 2012, Leaders' Committee received a report on the long-term 
financial prospects for London Local Government.1 This report suggested that on the 
prevailing trajectories for spending power (total income) and service demand, London local 
government could see a potential funding gap of £2.4bn (24 per cent) by 2020. 2. 
Since then, there have been a number of government announcements that provide greater 
clarity on the future levels of local government funding including Autumn Statement 2012, 
Budget 2013 and Spending Round 2013.   
 
3. 
Combined, these developments provide confirmation of additional funding reductions in 
excess of £4.1 billion for local government in 2014-15 and 2015-16, of which £0.8 billion relates to London. These figures are significant and place an increased level of pressure on 
local authority finances, particularly from 2015-16 and beyond. 4. 
London Councils' latest modelling suggests that, based on an extrapolation of current trajectories, London local government faces a potential financial pressure  of around £3.4 
billion by 2020. 5. 
At the same time, the nature of the local government finance system is moving away from a strict methodological assessment of an authority's characteristics and spending pressures, to one much more closely tied to the performance of the local economy.  Whilst this offers 
opportunities for financial gain, there is now, arguably, an additional level of risk, volatility, and uncertainty to funding levels. 
 
6. 
This report provides an update on the long-term financial outlook for London and the 
potential impact this may have on individual authorities in London.   

## Developments Since December 2012

7. 
Since the report to Leaders' Committee in December 2012, London local government, and 
the wider sector, has seen a number of incremental cuts to its anticipated funding from central government for 2014-15 and 2015-16. A summary of the key developments are set 
out below: 
 

- Autumn Statement 2012 announced that local government funding would be reduced by 2 
per cent in 2014-15. This amounted to £445 million, of which approximately £95 million related to London. 
- Budget 2013 set out a further reduction to departmental spending of 1 per cent in 2014-
15. This meant a reduction in in local government funding of £219 million or circa £41 
million in London.  
- Spending Round 2013 announced that overall resources to local government would fall by 
a further 10 per cent in real terms in 2015-16 and that local authorities would be required to pool a proportion of their New Homes Bonus grant. The headline 10 per cent reduction 
was one of the largest cuts to funding in comparison to the average reduction across other Whitehall departments.  Recent Government data now indicates that core funding will fall 
by **circa £621 million in London** or 16 per cent in 2015-16.   
 
 
8. 
In total, these three major announcements, and the associated policy changes, have further 
reduced London local government funding by close to £140 million in 2014-15 and £700 
million in 2015-16 (core funding plus pooling of NHB grant).   
 
9. 
It is also worth noting that, by the time Leaders' Committee convenes in December, the 
Chancellor of the Exchequer will have delivered the annual Autumn Statement to Parliament (5 December). London Councils officers will circulate a briefing note on the announcement 
prior to the meeting.   
 
10. 
In advance of the announcement, London Councils presented a submission to Government, which set out a range of changes that would support London local government to accelerate 
economic growth, contribute to deficit recovery and shape better public services.  This is attached as Annex A to this report.   
 
11. 
Although the scope for influence is widely regarded as limited, this submission provides a further opportunity to build on the work carried out prior to Spending Round 2013 and provides a further platform for future discussions with Government, particularly in the context 
of the City Growth Deal process and the anticipated Spending Review in 2015.  
 

## The Latest Analysis

12. 
In light of the funding announcements above, London Councils has updated and refined its modelling on the long-term financial prospects for London local government. The analysis 
incorporates more detailed and up-to-date data and information on service demand as well 
as reflecting the changes to funding outlined above.  
13. 
The latest modelling suggests a funding gap of as much as £3.4 billion (31 per cent) by 
2019-20 (see Figure 1). This is an increase of £1 billion compared to the report considered 
by Leaders Committee in December 2012. 

## Figure 1 - Income Vs Expenditure Trajectory In London Local Government To 2020

14. 
Analysis suggests that, despite some of the recent changes announced by Government (for instance the £3.8bn pooled fund for health and social care) London local government could see an overall increase in service pressure of £2 billion (22 per cent) and a decrease in projected funding of £1.4 billion (15 per cent) between 2012-13 and 2019-20.  
 

15. 
By 2020, the principal statutory responsibilities of local government - namely, social care and 
waste - could account for over two thirds (67 per cent) of all revenue expenditure. Given 
their statutory nature, these costs are to a certain extent, unavoidable and the subsequent impact on the wider range of non-statutory services could be considerable. Figure 2 
illustrates that funding for non-protected services could be squeezed by as much as 48 per cent by 2019-20 in order for local government in London to fit within its projected funding 
envelope. 
 

16. 
Modelling so far into the future is obviously dependent on a number of assumptions, so figures must be treated with caution. However, the model does confirm our initial conclusions from December 2012 - that a successful approach to the challenge ahead is likely to include 
a more radical approach to local public service delivery and that the current system of local 
government funding, based on short term funding allocations via central silos, appears less and less acceptable into the future.    

## The Changing Nature Of The Local Government Finance System 17. Within The Overarching Financial Outlook, It Is, Perhaps, Also Worth Noting That As A Proportion

of total local authority income, funding from central government (grants) will reduce from 65 per cent in 2010/11 (formula grant + other grants) to below 20 per cent in 2020. 
18. 
It follows that, within the context of a smaller funding envelope, this trend will alter the nature of local government's relationship with Government. Of course, local government has long 
called for such a change (i.e. greater local funding autonomy), and the illustration is not made to argue against it, but to highlight the fundamental shift that is happening in the 
relationship between central and local government.   
 
19. 
As local authorities become arguably more dependent on locally retained income, the recent reforms to the local government finance system will have an increasingly divergent impact on 
individual authorities.  
 
20. 
The following chart shows the projected funding profile of each borough in 2015-16. It covers 
the three principal sources of funding - locally retained business rates, council tax and 
revenue support grant. Depending on an authority's balance of funding, it will face a different 
set of risks and challenges and it is arguably the case that the more dependent an authority 
is on Government-controlled RSG, the greater the risk exposure to reductions in income 
levels.    

## Figure 3: Core Funding Profiles For London Boroughs In 2015-16


21. 
Interestingly,  the emphasis within the distribution of local government funding also appears 
to be changing and moving away from a strict methodological assessment of 'spending need' 
to one linked more closely to the performance of an authority's local economy.2 Polices such 
as New Homes Bonus, Business Rates Retention and Localisation of Council Tax Support (Benefit) are examples of this new trend and have been designed to  reward local authorities for their efforts in supporting the conditions for economic growth.   
 

22. 
Within these policies, there are elements of 'carrot and stick' and the following graphic 
illustrates how these policies could work together for the direct financial benefit of an authority, but also highlights the corresponding financial risks. 

## Figure 4: Financial Incentive, Risk And Reward

Can you build more homes? 

Is your local economy growing?  
Is employment rising? 

23. 
Based on the latest published estimates,3 17 London boroughs will be able to retain close to 
£26 million of business rates growth with the remaining 16 boroughs estimating a combined 
reduction of close to £20 million (excluding the GLA).  In 2013-14, London local government 
will also receive close to £150 million from the New Homes Bonus grant.   
24. 
Whilst this shift in emphasis offers the potential for both financial gain and loss,  the 
dynamics within these policies, arguably, add a layer of complexity to the funding system.  In the context of rapidly increasing demand for local services, this is a further challenge for 
long-term financial planning. 

## The Wider Public Sector Context

25. 
Whilst it is beyond doubt that local government faces an extremely challenging financial outlook, it is arguable that this will have a marginal impact on overall levels of public expenditure.   
 
26. 
As illustrated in Figure 5 below, total government expenditure is projected to remain broadly 
flat to 2017-18. Within the Government's current policy framework, it is expected that those departments such as local government (often described as 'non-protected' departments) will 
constitute just 9 per cent of total government expenditure in 2017-18 compared to 18 per 
cent in 2010-11 with expenditure on health, education and social security (including both 
welfare and pensions) having a far larger impact on overall expenditure levels.   
                                                          
 

## Figure 5: Estimated Total Government Spending


27. 
Of course, future spending strategies will very much depend on the performance of the economy and efforts to stimulate growth. In November, the Bank of England (BoE) announced its latest economic forecasts. These were more optimistic than those announced 
in August with growth forecasts increased to 2.9 per cent in 2014 and 2.5 per cent in 2015, 
before settling at 2.7 per cent thereafter.   
 
28. 
Unemployment and inflation are also both expected to be lower than previously forecast with 
the former now at 7.6% while inflation fell to 2.2% in October. 
 

29. 
Whilst this is undoubtedly encouraging, many commentators have suggested that this is unlikely that to alter significantly the trajectory of current spending plans for local 
government.   

## Conclusion

30. 
It is evident, that local government faces a period of prolonged financial austerity and that the 
scale of the challenge is larger than that anticipated previously, particularly beyond 2015-16.   
 
31. 
By way of illustration, SR2013 announced that planned government revenue spending4 will 
fall in real terms by 2.0 per cent in 2015-16. Within the current policy framework, this 
translated into a 10 per cent real terms cut for local government. In 2016-17 and 2017-18, 
planned government revenue spending is expected to fall by a further 4.4 per cent and 4.1 
 
per cent respectively - considerably greater that the 2.0 per cent in 2015-16. If current policies for health, education and international development continue, it is highly likely that local government can expect significantly larger reductions in the years to come.  
 

32. 
It is clear, that there will need to be careful consideration of how London local government 
responds to these challenges.  Leaders Committee may wish to consider the extent to which 
financial devolution and autonomy can deliver financial resilience against a backdrop of reduced funding and rising pressure on local public services.   

## Recommendations

33. 
Leaders Committee is invited to note and discuss the analysis and issues in this report. 

## Financial Implications For London Councils

None 

## Legal Implications For London Councils None Equalities Implications For London Councils None Autumn Statement 2013 Submission From London Councils

| Introduction	                                               | p1   |
|-----------------------------------------------|------|
| London local government faces a challenging   |      |
| financial future                              | p2   |
| London local government faces rising          |      |
| pressure on its services                      | p3   |
| The current local government finance system   |      |
| is unsustainable                              | p5   |
| London Councils' call for change - devolution |      |
| and greater financial autonomy                | p7   |

 
Introduction 
 
London Councils represents London's 32 boroughs and the City of London. 
 
London's local authorities recognise the Government's twin objectives of deficit reduction and economic growth.  We 
believe that the forthcoming Autumn Statement 2013 signals a timely opportunity to re-assess how we can best 
contribute to these goals. 
 
Since the beginning of the Spending Review period, local government has made a significant contribution to deficit 
reduction.  Between 2010-11 and 2014-15, principal funding for local government will have reduced by close to 40 
per cent in London.    At the same time, London's growing and ageing population places increased pressure on local 
services and infrastructure, most notably within education, housing and social care. 
 
In the face of this exceptionally tough fiscal climate, London local government is, arguably, one of the most efficient 
sections of the public sector and has continued to demonstrate innovation and resolve.   
 
Boroughs have made savings by sharing services, joining up procurement and expanding the use of targeted 
commissioning. They also have sought to advance a more ambitious approach to public service delivery through the 
Troubled Families programme, The Public Sector Transformation Network and adult social care and health integration. 
 
In developing some of these initiatives, London authorities have become frustrated with the wasted opportunities 
and ineffective use of resources caused by Government continuing to think in the short-term and operate in silos.  
 
This failure to collaborate combined with a lack of real devolution to London local government risks actively 
constraining our ability to fully meet the aspirations of our residents, businesses and local communities.  A new 
relationship between different tiers of government as well as between public sector bodies is needed. 
 
In this context, this submission sets out a range of changes that London boroughs are calling for to accelerate 
economic growth, contribute to deficit recovery and shape better public services in partnership with Government, the 
Mayor of London and other partners.   
 
London Councils calls for:  
 

 
Greater local leadership for skills provision and employment support schemes  
 
The unnecessary cap on Housing Revenue Account borrowing to be removed 
 
London Local government to have full discretion over the full suite of property taxes 
 
Greater reflection of London's housing costs within the reforms to the Welfare System.   

London Local Government faces a challenging financial future 
 
At the beginning of the Spending Review period, local government faced a disproportionately higher level of savings 
than other sections of the public sector - 28 per cent in real terms over the four year period compared to 8 per cent on 
average for central government departments.   Further incremental cuts suggest that reductions in core funding will 
now be closer to 40 per cent. 
 
This level of contribution by London local government to the Government's deficit reduction programme far outstrips 
the contribution required of the vast majority of other Whitehall departments.   
 
Furthermore, Spending Round 2013 has confirmed that local government will once again be required to bear a 
disproportionately higher level of savings in 2015-16 than elsewhere within the public sector.  Government figures 
suggest a reduction in core funding for London of close to 16 per cent.   
 
Between 2010-11 and 2015-16, it is now estimated that total income for London local government will have reduced 
by over £1 billion.   
 
With fewer resources, this has required some tough decisions.  Since 2010, local government has seen its headcount 
reduce by 465, 000 (16 per cent) in contrast to 122,000 (4 per cent) within central government.1 
 
Not only will local authorities have fewer resources, but they will also have to manage greater levels of financial risk.  
Policies such as business rates retention (and in particular the impact of appeals), the localisation of council tax 
support and the social fund have all added an additional level of volatility within local authority funding.   
 
Whilst we believe that local government should strive for, and be given, greater devolved power and flexibility, 
policies such as the localisation of council tax support and children on remand are demand-led, volatile areas of 
spend where the Government has repeatedly failed to have an impact.  In the absence of any risk sharing 
arrangements with Government, they run the risk of having a significant knock-on impact on resources available for 
other vital services such as social care.    In total, these two policy changes represent a reduction in available 
resources of close to £500 million for local government as a whole.   
 
Local Government has made a significant contribution to deficit reduction.  In the interests of financial stability 
and robust financial planning, Government must ensure that no further reductions are made to the 2014-15 and 
2015-16 funding levels for local government.   
 

 

## London Local Government Faces Rising Pressure On Its Services

Against this backdrop of reduced resources, London boroughs and the City of London face sharply rising demand for services from a growing population with increasingly complex demography. 

 
London's population is growing at a faster rate than any other region in England.  By 2020, London's population will reach approximately 9 million residents with some boroughs experiencing population growth of almost 15 per cent. This level of growth places significant pressure on both local authority services and infrastructure.  By 2020, it is estimated that due to a combination of rising cost pressures and reduced levels of income, London local government faces a potential funding gap of close to £3.4 billion. 

It is worth highlighting three areas where London local government is experiencing considerable pressure:  
Education: London's pupil population is set to grow by 180,000 (17 per cent) by 2016-17 - a rate considerably higher than the national growth rate of 8 per cent.  Within this, some boroughs are expecting to see demand for school places increase by up to 30 per cent.  This has meant that London boroughs are facing a shortage of 118,000 primary and secondary school places up until 2016-17. 

  
Housing: Analysis suggests that 526,000 new homes will need to be built in London up to 2021 to match London's growing population. In addition, a further 283,000 homes will need to be built to meet the unmet backlog of housing. However, only 250,000 homes will be built according to current projections, leaving a deficit of 559,000 homes in London by 2021. 

Social Care: London boroughs are also facing increased pressure from a population with more complex care needs, adding to the considerable pressure already on social care budgets.  It is forecast that between 2011-12 and 2020, local authorities will have faced a cost pressure of approximately £800m from demographics and inflation alone.  By way of illustration, it is estimated that by 2020:2  
 

- 
London's over-65 population will increase by 127,000 at a growth rate of 14 per cent. 
- 
London's population with a mental health disorder will grow by 134,000 or 10 per cent. 
- 
London's population with a learning disability will grow by 14,000 or 10 per cent. 
- 
London's population with a physical disability will grow by 62,000 or 13 per cent. 
While local services face an overall increase in demand, they are also being accessed by local populations within an 
increasingly complex demography.  London's population has a set of unique characteristics, including:  
 
 **Mobility:** London has an inherently mobile and changing population.  In 2011, London had approximately 70,000 
short-term residents (STRs) - over a third of all short-term residents in England and Wales.3   
 **Ethnicity:** London continues to be the most ethnically diverse region in the country - more than one in three 
usual residents in London are non-UK born  with London boroughs accounting for 18 of the top 20 local 
authorities for ethnic diversity.4  
 **Language:** London has the highest percentage of households containing a usual adult resident whose main 
language is not English (26 per cent) with 9 of the top 10 linguistically diverse local authorities in London.5 
While the diverse and growing nature of local communities is to be celebrated, their complex nature raises important questions about how to capture the necessary information to help inform the design and delivery of public services. Official forecasts have historically underestimated London's population and the one-size-fits-all approach to population estimation has failed to recognise London's unique challenges. In reviewing the current proposals on future censuses, London Councils remains concerned that there is little recognition of London's specific needs in the proposed approaches with limited recognition of the important role local authorities could play in future censuses, particularly with respect to local administrative data. 

London local government believes that the Government should consider a more tailored approach for London to reflect the inherent difficulties in accurately estimating its population.  

## The Current Local Government Finance System Is Unsustainable

To manage this scale of financial pressure, London Councils believes that consideration must be given to how local public services are funded.  The current system of local government funding is becoming less and less sustainable in its current format.  In particular, London Councils would raise three overarching concerns: 

## 1. The Ring-Fencing Of Whitehall Budgets

Local government has been asked to deliver a significant proportion of public sector spending reductions and in part, this is due to the ring-fenced nature of several Government departmental budgets.   As highlighted by the Treasury Select Committee,6 there is a risk that this policy:  

 Focuses the burden of financial stringency on non ring-fenced departments which, as the cumulative effect of the 
budget reductions take hold, have to bear an increasingly disproportionate share of the burden.   
 Does not subject the ring-fenced departments to the same level of financial scrutiny and accountability as other 
departments, and 
 Risks distorting the allocation of resources between Government priorities. 

## London Councils Requests That Government Publish Its Full Impact Assessment Of The Spending Review 2010 And Spending Round 2013 On London Local Government. 2. The Lack Of Transparency Within Local Government Funding

London Councils is extremely concerned about the lack of transparency and clarity surrounding Spending Round 2013 
(SR13) and the cuts to local government funding in 2015-16. This has caused confusion and uncertainty for elected 
members, officers and local residents.   
 
The Government's primary message has been that local government spending will only reduce by 2.3 per cent  in 
2015-16.  
 
London Councils is extremely concerned that as yet, Government officials have been unable to produce a detailed 
breakdown of this figure and requests that this is carried out as soon as possible.    
 
Recent Government information shows that London will face a disproportionately high level of cuts to its core funding 
in comparison to other regions - a reduction of 16 per cent in real terms (£621 million) compared to the national 
average of 15 per cent. This is primarily due to the complex methodology used by Government to apply the funding 
reductions in 2015-16.  
 
In examining this methodology, London Councils' analysis shows that for 2014-15 and 2015-16, there is a clear 
correlation between levels of deprivation and the level of cuts.  
 
Funding reductions on the scale faced by local government require councils to fundamentally redesign the way they 
deliver services.  This process takes time with a clear view needed of an authority's future resources.   The absence of 
crucial funding information is clearly unhelpful and undermines attempts by local authorities in London to plan in the 
medium to long-term. 
 

## 3. The Lack Of Stability Within Funding For London Local Government

London Councils is also concerned that the existing Government approach to local government funding focuses excessively on the short-term with funding levels subject to constant change and revision.  For example, since Spending Review 2010, funding for local government has been reduced by a further £900 million in 2014-15 and 
2015-16.  This lack of stability fails to recognise the important role of local government in delivering sustainable services and supporting the conditions for long-term economic growth.  Current short term grant funding via central silos is inefficient and insufficient to meet the needs of London's diverse communities. The recent policy change to New Homes Bonus is a clear example of how Government decisions to change the conditions of funding can risk the delivery of crucial public services and long term investment.  In London, current projections suggest that close to £90 million will be transferred from the boroughs to the LEP in 2015-16.  London Councils has calculated London's average annual growth in New Homes Bonus grant as £50 million over 2011-12 to 
2014-15 - in effect, the top slice going to the LEP in London almost cancels out two years of incentive growth.   
 
London Councils believes strongly that Government should reconsider its position on the New Homes Bonus proposals and should provide local government with greater stability and coherence within its funding mechanisms.    

London Councils Call for Change - Devolution and Greater Financial Autonomy 
 
London has a key role to play in securing further economic growth yet if the capital is to retain its position as a 
leading global city and the engine of the UK economy a deal on devolution for growth is now needed.  Our submission 
considers how greater financial autonomy can act as a springboard for economic growth, jobs and greater 
infrastructure. 
 
Jobs, Skills and Worklessness 
 
Despite a record number of available jobs, far too many Londoners struggle to find their way into work. The capital's 
rate of working age employment lags behind the rest of the country and the number of long term unemployed 
continues to grow unacceptably. 
 
London's global pre-eminence means jobseekers face fierce competition from rivals nationally and abroad. If they are 
to keep pace with the capital's economy then it is vital they are able to identify and access training that meets the 
needs of business.  
 
The Government spends more than £550 million on adult skills provision in London. This approach clearly recognises 
the benefits of going with the grain of the market, yet we believe it fails to make the best use of local business 
intelligence.  
 
At the same time employment programmes led from the centre continue to struggle with those furthest from work. 
The net result is a growing number of people left facing the grim prospect of unemployment and a Government 
burdened by an ever-increasing welfare bill. 
 
London Councils and the Mayor of London will present joint proposals for an integrated welfare to work programme 
for the capital. By devolving responsibilities and resources we believe London government can significantly increase 
the number of people moving from welfare into sustainable work.  
 
We expect to set out our case in detail as part of London's Growth Deal submission, but our key proposals on welfare 
to work and skills include: 
 

 
A single pot for employment support devolved to groups of boroughs 
 
An agreement with HM Treasury and DWP to allow re-investment of benefit savings locally if agreed targets are met 
 
Devolution of adult skills budget including freedom to vary funding rates to incentivise provision that meets 
the needs of local employers and increase proportion of funding dependent on learners' progression into work 
 
Devolution of funding for the local support services framework tailored to meet the requirements of London government. 

Housing Investment 
 
Just as vital as a workforce able to meet the challenges of the global economy in the 21st century is a housing market 
able to provide enough homes for people to live in.  
 
For the last 30 years London's supply of new homes has failed to keep up with the demands of a growing population. 
As a result, high rents, increased overcrowding and a growing reliance on expensive temporary accommodation are 
fast becoming the hallmarks of London's housing market. Insufficient housing has also emerged as a key barrier to 
continued growth. 
 

 

As highlighted above new analysis by London Councils shows that between 2011 and 2021 526,000 homes will need to be built just to accommodate London's booming population. Furthermore failure to build enough in the past has left an unmet backlog of 283,000 homes. Based on current projections we estimate that only 250,000 homes will be 
built by 2021, leaving a shortfall of more than half a million homes. Insufficient financial flexibility is a critical part of London's housing crisis. Through devolution we believe London 
government could significantly increase the number of new homes built in the capital. Again, London Councils and 
the Mayor of London expect to set out our case in detail as part of London's Growth Deal submission, but our key proposals on housing include: 
 Removing housing revenue account debt cap restrictions to permit borrowing in line with the prudential code 
 Introducing an "earnback" scheme following the Manchester model for the housing element of benefit payments  Assessing how shifts in broad rental market area caps might lead to a direct and measurable reduction in public 
spending. 
 Permitting full cost recovery on planning applications 
 Transferring the surplus Government land portfolio to London government 

## Greater Financial  Autonomy

London Councils has consistently argued that greater fiscal autonomy and freedom for London local government will enhance outcomes for local communities.  We recognise that the financial landscape is changing with the funding relationship between central and local government moving from one based on centrally allocated grants to one based upon concepts of financial incentive, underpinned by  risk and reward. Greater fiscal autonomy for London and London's boroughs in particular, is vital to enable long term planning, management and investment of resources that will be required to promote growth and tackle some of the entrenched, complex issues that our communities face. With this in mind, London Councils requests that in the medium-term, the full suite of property taxes (council tax, business rates, stamp duty land tax, annual tax on enveloped dwellings and capital gains property development tax) are devolved to London government, including control over  setting the tax rates as well as issues such as revaluation, banding and discounts Of course, there may well be some interim measures that the Government could consider, including: 
 Business Rates Retention: London Councils welcomes Government's ambitions to increase the size of the local share over time, but requests that these actions are accelerated so that London local government has clear and strong financial incentives and rewards for delivering economic growth for its local communities. 

 Council Tax: London Councils believes that the Government should remove the requirement for council tax 
referendums.  It is simply a form of council tax capping by another route.  In line with its democratic mandate, London local government should have the freedom and flexibility to set council tax discounts locally without central government proscription. 
Fees and Charges: There are many services that local government has a statutory duty to deliver, but is required to charge for at a level determined by central government rather than local councillors. The result is that there are a number of services which leave councils with an overall net loss each year. This has always been perverse, militating against councils' ability to work effectively with businesses, help drive growth and it also often has other significant financial consequences for local taxpayers. 

 
London Councils believes that local authorities should have the freedom to set their own level of fees and charges to recover the full cost of delivering the service, particularly in the areas of planning, building control, land searches and licensing.     
 
Fraud Investigation: London local government is fully committed in its attempts to tackle, prevent and detect fraudulent behaviour and it is essential to protect vital resources for the benefit of local residents, businesses and communities.  However, London Councils has a number of concerns in relation to the recent decision to accelerate the introduction of the Single Fraud Investigation Service (SFIS) without a full review of the current pilot schemes, including: 
 The proposals fail to adopt a holistic approach to fraud.  Government should be mindful that a failure to join up and link investigations could increase the costs of prosecution, undermine the sentencing process and risk the duplication of time, effort and resources.   

 These proposals do not consider how local authorities will be affected by the loss of staff and resources.  This will 
have a significant impact on local capacity to investigate fraud, particularly in relation to social housing and council tax.   
 These proposals will raise a number of complex employment issues (e.g. TUPE), which need to be fully understood 
and addressed. 

 
The current proposals for SFIS are overly centralised and fail to appreciate the benefits of a local, cross-sector 
approach.  London Councils believes that before Government earmarks further resources for these proposals, there 
needs to be further consideration of the potential for alternative service delivery models, including a more 
collaborative model with local government.   
 
In a much reduced public finance environment, it is vital that London local government is part of a joined-up, cross-
Government effort to fight fraud.   
 
Welfare Reform 
 
London Councils supports reform of welfare that helps work pay, but is concerned that the reforms to the existing 
system, and in particular the failure to take into account London's higher housing rents, could have a significant 
impact on the delivery of local authority services and potentially, increase costs.    
 
London Councils believes that the Government should undertake a serious, full and fair assessment of the additional 
costs of welfare reform for London's councils as soon as possible. 
 
In the two years since the reforms to LHA were implemented in April 2011, the numbers of London households in 
receipt of housing benefit has risen from 816,931 to 850,212. 
 
Within those figures, the number in receipt of LHA has risen from just over 201,000 in April 2011 to 235,000 in May 
2013; a 17 per cent rise that accounts for the entire rise in housing benefit receipt in London over the period.  
 
96 per cent of this growth can be accounted for by households in work. 
 
This is indicative of a growing reliance on the subsidy of private sector housing in London in order to provide housing 
to low income households, both working and non-working. 

 

 
There has also been a differential impact across London -  the number of households in receipt of LHA grew by 5 per 
cent in inner London over the period whilst there was growth of 21 per cent in outer London. 
 
As London's rents are higher than anywhere else in the country, housing benefit payments are also higher and 
consequently half of all households affected by the benefit cap are London households. 
 
London Councils believes that the Government should take London's higher housing costs into account in the reform 
of housing benefit. A failure to do so could potentially increase homelessness in the capital as well as further 
concentrating housing benefit recipients in some lower cost boroughs. 
 
Reforms to welfare present significant problems for local authorities in London, not least in dealing with increases in 
homelessness and requirements for temporary accommodation that arise from welfare reform induced tenancy 
failure. 
 
London Councils is calling for: 

- 
London exemption from below inflation uprating of LHA. 
- 
A full and comprehensive assessment of the new financial burdens to local authorities resulting from the implementation of welfare reform, particularly in relation to homelessness and temporary accommodation. 
- 
Recognition of the potential impact on local authority services that could result from failure to take into account London's high and rising rents in the reform of housing benefit, including the benefit cap. 

## School Places

As highlighted above, London faces significant pressure from a growing population. Demographic trends including a higher-than-expected birth rate, greater rates of inward migration, and increasing numbers of parents staying in the capital after having children has led to an increasing shortage of school places in recent years. As this demographic growth moves through the school system, pressure will increase on secondary schools and sixth forms. By 2016, the shortage of school places in London is set to reach 118,000, leaving London boroughs with a funding shortfall of £1billion. At the time of the Basic Need capital allocations in March 2013, London represented 42% of the overall national need for school places, yet received only 36% of funding. This conceals a significant and growing pressure on the secondary estate, where London has a significant 52% of the overall pressure. London Councils latest analysis showed that boroughs are spending around £9,000 on every pupil to make up for the government funding shortfall. While councils have strategies in place to create places and are working tirelessly to provide all of London's children and young people with access to an excellent education, the £9,000 cost per pupil that they are spending subsidising insufficient school places funding by government is placing unprecedented pressure on councils' already squeezed budgets. 


## Between 2010 And September 2013, Boroughs Created More Than 46,039 School Places, Equivalent To 1,535 Classrooms, But More Funding Is Needed To Continue This Expansion. However, In Many Boroughs The Easy Options Have Been Exhausted And The Only Options Remaining Are Long-Term, High Cost New Build And Renovation. Government Must Provide Sufficient And Long-Term Capital To London'S Local Authorities To Ensure Children And Young People, And Their Parents And Carers, Can Continue To Rely Having Access To High Quality School Places. Children'S Services - The Two Year Old Offer

London Councils supports the introduction of the new two year-old entitlement, recognising it has the capacity to make a real difference to London's most deprived children and helping narrow the educational gaps between them and their peers. At present,  44 per cent of early years providers in London are operating at full capacity and many good as well as outstanding providers have opted not to participate in the delivery of the entitlement.  This has placed significant pressure on London boroughs and raises concern about the feasibility of creating , in conjunction  
with the market,  the 55,100 places needed by September 2014. 

London Councils is calling on Government to provide boroughs with a fair allocation for 2014-15, that reflects the true costs of creating the places needed to meet the expansion of the 2 year old offer and  enable London's most deprived two-year olds benefit from the entitlement. Health and Social Care Integration In London, £21.6 billion7 was spent on health and social care in 2011-12.  Of this close to 80 per cent (£17.2 billion) 
was spent on health. The health and wellbeing of its citizens is critical to enabling London to be a vibrant and successful city, and to support our aspirations for improving the life chances of individuals and the economic growth of the capital.  London boroughs have welcomed the new public health responsibilities devolved to them and are already working hard to deliver some of the benefits from having responsibility for these functions at a local level, including being able to be more responsive to individual's and communities' needs. Public health services play a vital role in improving health and wellbeing and thus in reducing pressures and costs on health services.  Investing in public health is therefore an important means of helping to manage rising cost pressures on health and social services, as well helping people to improve their economic and life chances. It was helpful to have 2 year financial allocations (2013-14 & 2014-15) for public health. However, London boroughs are still concerned that the total amount of public health funding available does not clearly relate to overall needs and costs and that the formula used to determine individual allocations, being so significantly based on mortality rates, is not realistic. 

 
London Councils believes the government should commit to increase the total amount of funding to support more preventive work through public health, should ensure that the ACRA review delivers a public health funding formula that better reflects the range of public health needs and costs, and should commit to minimum 
                                               
 

three year funding settlements for public health to enable clear planning and the most efficient commissioning 
of services.   
 
Adult social care spend accounts for a significant share of local authority expenditure in London and this is forecast to 
rise dramatically, because of a combination of pressures from growing populations of older people and adults with 
significant learning or physical disabilities.  While boroughs have been successful in driving cost reductions and 
efficiencies whilst protecting key services for vulnerable people, over recent years, the further potential of such 
approaches is very limited.   
 
In addition to these population pressures, the Care Bill will significantly add to cost pressures on London boroughs.  
Latest analysis identifies additional costs of £738 million in London between 2016-17 and 2019-20 from the Bill.  
Implementation of the new policies is highly complex and preparing for this will also add additional costs.  We 
estimate these to be around £89.8 million in London in 2015-16 - but if the government's current funding of £335 
million for this is allocated using current formulae the capital would only receive £52 million.  No funding provision 
has been made by the government for implementation work in 2014-15. 
 
London Councils believes the government should provide funding to support implementation in 2014-15, 
increase the funding for implementation and preparation in 2015-16 and commit to fully funding the new costs 
created by the Care Bill from 2016-17 and beyond. 
 
Boroughs will continue to explore options for efficiencies - particularly through working with the NHS to improve the 
integration of health and care services.  However, to support and enable this, London Councils believes the 
government needs to consider the total health and social care budgets together in its spending plans and enable 
easier shifting of money between the two to incentivise and support more joined up, person-centric approaches 
to health and wellbeing. 
 

 
London Councils 59½
  Southwark Street London SE1 0AL www.londoncouncils.gov.uk 020 7934 9813
publication date: November 2013

# Leaders' Committee

# Beyond 2011: Future Census Item No:   7

Report by: 
John Bray  
Job title: 
Finance & Policy Manager, Fair Funding Date: 
10 December 2013 
John Bray Contact Officer: 
Telephone: 
020 7934 9662 
Email: 
John.bray@londoncouncils.gov.uk 

 
Summary The purpose of this paper is to seek approval for London Councils' 
response to the ONS consultation on Beyond 2011: The census and future provision of population statistics in England and Wales.   
The consultation presents two approaches for census taking in the future: 

1. A decennial primarily online census similar to that 
conducted in 2011. 
2. A census using existing government data and compulsory 
annual surveys. 
ONS will present their findings to Government and Parliament in 2014.    
The proposals present a number of significant concerns, including: 

a) The risk of inefficient and inaccurate distribution of local 
government funding, particularly if the future census approach 
does not adequately address the challenges of capturing the scale 
and characteristics of London's population; and  
b) A high risk associated with successfully implementing any new 
government data approach and a loss in detail for small area and 
cross-tabulated statistics that London boroughs currently value. 
c) A lack of recognition of the key role of London local authorities in 
the census process, particularly in engaging with their local 
communities. 
 

## Recommendations Leaders Are Invited To:

o Note the contents of this report; and 
o Consider and approve the Consultation Response as set out in 
Annex A. 
Beyond 2011: The census and future population statistics Introduction 
1. 
The Beyond 2011 Programme was established by ONS to consider the needs and options for population statistics in the next decade and beyond. The ONS has now issued 
a consultation document, seeking views on two approaches to the census in the future. The consultation closes on 13 December 2013. 
2. 
London Councils draft consultation response is attached at Annex A for the consideration of Leaders' Committee. In preparing the draft response, London Councils has sought 
views from the Society of London Treasurers and demography lead officers in London local authorities, and has discussed areas of common concern with officers at the GLA. 
3. 
The findings of the ONS' research programme and results of the consultation will be published and presented to Government in 2014.   

## The Importance Of Population Statistics For Local Government Funding In London

4. 
Accurate population estimates are crucial to ensure a fair distribution of Government funding to local government.  London Councils' analysis shows that in 2013/14, London 
local government received close to £12 billion of revenue funding through methodologies using population as a factor. This represents approximately 77 per cent of total revenue funding. 
5. 
Under-counting of London's population risks London local government receiving less 
funding than it should. London Councils analysis suggests that in 2012/13, the loss of 
funding through under-counting was approximately £580 per person in grant before 
damping from core local government funding - namely formula grant. It follows therefore, that authorities lost £580,000 for every 1,000 of uncounted population through this grant stream alone.  
6. 
For London, the impact of population estimates is particularly significant. Analysis was 
undertaken of Census 2011 figures and how they compared to the population projections 
used within the 2011-12 and 2012-13 local government finance settlements and based on 
data from Census 2001.  The modelling suggests that London's population was 
undercounted by close to 375,000 as a result of using the projections based on the older 
census figures. 
7. 
However, it is arguably the case that population figures are less of a factor for funding distribution in the immediate future.  At present, London local government receives around £4.8 billion through the business rates retention system and at the introduction of 
the system, population was a significant factor in the distribution of this funding to local 
government.  
8. 
At present, the population figures and wider metrics used in the current distribution 
methodology are fixed until the system is next reset and the current indications are that 
this will not take place until potentially 2020.  At the point of the system reset, it is likely 
that the distribution methodology will again be updated for the prevailing population estimates.   

## The Importance Of Population Statistics For Service Planning In London

9. 
In addition to funding allocations, sufficiently detailed population statistics are essential at smaller geographic planning area levels to enable London boroughs to understand their communities, inform policy development and ensure service provision is appropriate. Given the transient nature of much of London's population base, understanding the changes to communities over time is essential to ensure local services meet the on-going 
needs of local service users.   
10. 
This requirement has implications for the types of population statistics outputs that would 
be available from a future census. They need to be sufficiently detailed and precise to 
continue to meet these service planning needs. For example in the area of public health, 
boroughs require sufficiently detailed statistics to understand differences between incidences of need across small geographic areas and communities in order to effectively 
commission services and target interventions.   

## The Consultation Proposals

11. 
The ONS Consultation proposes two potential approaches to a future census, namely:  
- 
A primarily online decennial census similar to that conducted in 2011 
- 
A census using government administrative data sources and compulsory annual 
surveys  
12. 
As with the 2011 Census, an online census in 2021 would require Parliament to agree specific secondary legislation, setting out the census date and specific questions. The alternative approach would require new primary legislation, to enable data access by 
ONS and for it to be a legal requirement for households to respond to any new surveys. 
 
Proposed Response 
 
13. 
London Councils officers have prepared a draft response for consideration and approval 
by Leaders Committee. It is proposed that the submission will include a number of key messages, including:  
 
o 
London's growing population is increasingly diverse with continued high levels of mobility and churn. This creates significant challenges for accurately estimating and classifying London's population and any proposals must recognise London's particular set of 
challenges.   
o 
Accurate population estimates are crucial to ensure a fair distribution of Government funding to local government and local public services.  By under-counting London's 
population, there is a risk that London local government receives less funding than it 
should.   
o 
Accurate information on population and characteristics of an area are vital for London authorities to appropriately devise policy; plan, commission, and monitor service delivery. 
Sufficiently granular information at a geographic and categorical level is required to 
enable the understanding of London's complex, and changing demography, particularly in areas such as social care, housing, education and transport. 
o 
In principle, it is felt that the option of a decennial census conducted primarily online, 
would allow a more accurate assessment of London's population.  This would follow the 
most recent census in methodology and would provide more detailed statistics but less frequently.  
o 
There remain inherent risks with this option, namely how to engage with London's hardto-count populations.  However, it is felt that these could be managed, in part, through 
closer cooperation by the ONS with London local government and needs additional 
resources on the grounds to engage with hard to reach communities, as we saw in the 2011 Census. 
o 
ONS' proposed approach of using government administrative data with compulsory annual surveys is felt to be a significant risk for London authorities. It will no longer 
provide the level of detail for population outputs that meets their current needs and that 
the traditional census approach has previously provided. In addition, an independent review of the methodology has recently concluded that there is not yet sufficient evidence to support a view that this option provides a methodologically sound basis for replacing Census 2011 methodology.   
14. 
The draft response also includes a number of other technical comments on the proposals.  
 

## Recommendations Leaders Are Invited To:

o Note the contents of this report; and 
o Consider and approve the Consultation Response as set out in Annex A. 

## Appendices Annex A: London Councils Consultation Response. Financial Implications For London Councils None Legal Implications For London Councils None Equalities Implications For London Councils None

 

# Beyond 2011: The Census And Future Provision Of Population Statistics In England And Wales

## Response By London Councils

 London Councils represents all 32 London boroughs, the City of London, the Mayors Office for Policy and Crime, and the London Fire and Emergency Planning Authority. London Councils is committed to fighting for more resources for London and getting the best possible deal for London's 33 councils. We develop policy, lobby government and others, and run a range of services designed to make life better for Londoners. 

  
 

## London Councils' Key Messages:

- 
This is a golden opportunity to address shortcomings in census and population statistics for London. 
 
- 
It is felt that a national one-size fits all approach will fail to reflect the unique scale, 
complexity, growth and churn of London's population.   
 
- 
In considering the two approaches, London Councils believes that: as a minimum: 
o Administrative data and surveys: the principle recommendations made in the 
'Beyond 2011: Independent Review of Methodology' must be adequately addressed for this option to be considered a methodologically sound basis for replacing the census. If these were met satisfactorily, then a 'dual running' concurrent approach for the next census could be necessary. 
 
o Decennial online census: concerns with low response rates, imputation 
methodology and mid-year estimate methodology need to be addressed for London. 
 
- 
In this context, London Councils believes that the Office for National Statistics (ONS) 
should: 
 
o Work closely with London local government to improve census and population 
statistics methodologies irrespective of the future approach taken. 
 
o Target sufficient resources to enable enumeration of the capital's hard-to-count 
populations, providing similar coverage, confidence and accuracy as the rest of 
the country for all population statistics. 
 
o Produce a specific response on the adequacy of the proposed approaches and 
processes for London. 
 
 
Introduction London Councils welcomes the opportunity to comment on the Government's proposals for the census and future provision of population statistics. London Councils has chosen not to use the ONS online response form as we feel that the questions asked on this alone are not adequate to reflect our opinion. Between the last two censuses, London has seen its population increase by just over 1 million and at a faster rate (14 per cent) than the national average (8 per cent).  Its growth has accounted for around a quarter of the total national population increase and  this growth is set to continue on a similar scale to what has recently been experienced - current projects suggest a growth rate of 12 per cent  between 2011 and 2021.   
 
In conjunction with this growth, London has seen considerable levels of population churn and mobility from internal and international migration.  Analysis of ONS data on migration flows shows that London has a high population turnover rate - almost double that of the rest of England for 
2003-11 and a far greater rate than for any other region. This scale of growth and movement makes estimating London's population and its characteristics profoundly difficult. Historically this can be seen from lower census response rates achieved in London and inaccurate mid-year population estimates that have used census information as the baseline. 

The importance of population to local government funding ONS mid-year population estimates are of great importance for local authorities. London Councils estimates that £12 billion of London local government revenue funding for 2013/14 is determined with population as a factor. Inaccurate estimates risk under-funding local public services and increasing pressure on local resources, including council tax levels. Historically, London has been consistently undercounted because of reliance on the 2001 census data in mid-year population estimates and consequently sub-national population projections. 

Undercounting due to low response rates in 2001, and inaccurate methods for measuring migration, has meant that some boroughs may have received less in formula grant, and other grants, than they should have. In 2012/13, London Councils estimated the loss of funding through under-counting to be £580 per person from core local government funding. Similarly, London Councils' analysis of Formula Funding before damping for this current financial year shows that London boroughs would have been worse off by an estimated £190-200 million had the population figures been based on 2001 estimates and not the most recent census. It is worth considering how population data is used within central government to distribute funding to local government. London Councils continues to argue that for London boroughs short-term migrants and day-time populations also bring considerable demands on local public services and need to be appropriately reflected in financing of these services. The latter includes overseas, domestic and day trip visitors as well as the substantial number of people who spend their working week in London, often renting or owning second homes.  For example, the population of some boroughs can double, triple or even quadruple each day compared to the resident population figures1.   At present, London Councils remains concerned that these metrics are not adequately reflected in the current distribution methodologies. 

 
Whilst this is not the focus of this consultation, it is important to recognise that information on shortterm migrant populations and day-time populations is valuable for London boroughs and will be needed as outputs in future census and population statistics at quality and spatial levels comparable to the current estimates.  
 
The Challenge of Population Estimates in London London has particular challenges in terms of its dwellings and make-up of population that increase the complexity of preparing accurate population estimates. Arguably, no other region in the country has, to the same degree, either individually or collectively, this combination of characteristics. 

These factors include: 

o Second homes (some boroughs with the highest rate of second addresses for work 
nationally) 
o Inaccessible properties (blocks of high-rise flats) and complex residential structures 
(commercial and residential combined) 
o Living in rented accommodation (multiple-occupation and hidden households) 
o Student and generally young populations (mobility and churn of these) o BME communities (under-registration on electoral register, under-coverage in 
census returns) and asylum seeking/refugee communities (issues with engaging with state authorities) 
o Diversity of languages o Deprivation levels (some parts of London amongst the most deprived nationally) 
o Short term migrants and visitors (the capital is the first destination for many to the 
UK) 
 This diversity and complexity in the make-up of London's populations and dwelling characteristics are, at a minimum, set to continue and perhaps more likely will become increasingly complex for population estimation purposes by the time of the next census and beyond.  
 
A one-size fits all approach risks continuing to fail London In this context, London Councils believes that a national one-size fits all approach, as the current proposals suggest, will risk continuing to fail London. As such, London Councils believes that there should, at a minimum, be recognition in the proposals that London requires sufficient resources to be allocated to census processes to address the lower coverage rates and confidence associated with estimating London's population. London Councils would therefore urge ONS, as part of its Beyond 2011 research programme, to review both proposed approaches and processes in light of whether these are sufficiently adequate for London and other large urban areas. It may well be appropriate for London to have a separate approach to reflect the inherent difficulties in accurately estimating its population. London local government would welcome the opportunity to explore this and work with ONS in understanding the issues and improving both census processes and population statistics for the capital. The current lack of any recognition of London's specific needs in the proposed approaches combined with scant recognition of the important role local authorities already play in census taking is of concern and needs addressing. Further technical comments are provided below. 

 
A census using administrative data with compulsory annual survey This option would clearly be a new approach to estimating population statistics and because of its untried and untested nature, this option carries the highest levels of risk for accurately estimating populations and their characteristics.  
 
 
London Councils has serious concerns for the viability of this option.  ONS's own independent review of the methodology has concluded that there is, as yet, insufficient evidence to positively reply that this methodology provides a sound basis for replacing 2011 census methodology.2 
 
London Councils would raise the following issues: 
 
Lack of granular characteristic information One of the key issues for local authorities with this approach is the lack of suitably granular outputs.  It is felt that these proposed outputs would not deliver the level of detail required to meet local authority needs for planning and monitoring of services. Without this information, London boroughs could be faced with meeting the cost of addressing this information deficit through for example, commissioning independent surveys. This type of granular information is needed for example when considering the planning of new housing developments and the potential impacts on local communities. 

The financial impact on local authorities London Councils does not agree with ONS's valuation of census outputs compared to administrative data and annual surveys. The £5 million additional benefit3 nationally from the more granular traditional census approach represents a minimal individual local authority benefit. London Councils believes this benefit to be much greater and indeed as mentioned the cost of commissioning this level of data would be much higher for local government as a result of not having this information. This would be an additional cost local government would face as a result. There would be a clear loss of economy of scale in moving from a national to individual local authority production of granular population information. There would also be risks with noncomparability across geography and time between locally uncoordinated approaches. 

 
Risk of low response rates with surveys London Councils believes there are other considerable issues with a compulsory annual survey including ensuring that response rates are sufficiently high in London. As previously set out, there are specific difficulties in estimating London's population. Historically, London has experienced lower response rates under the existing arrangements compared to the national average. Despite the considerable work by London boroughs to raise awareness of the census. There are real risks that an annual survey would dilute the message to those communities that are hard-to-reach around the importance of responding. Currently the decennial approach enables a focused campaign to reach those most likely not to respond. Mobilisation each year to reach new potential non-responders would be resource intensive and arguably less efficient.   
 
Administrative data and issues for London At present, it is not clear how the use of administrative data will be an improvement on the current mid-year estimates. The Beyond 2011 research programme supporting papers (S1-S5) show that there are considerable coverage issues for London with various data sets that could potentially be used in producing estimates. These include: the NHS patient register, Electoral register, School Census, HESA student records and DWP and HMRC records. Each of these options suggests unique challenges when applied in London with little offered by way of how these will be overcome. In London where much of the population base is transitional, the associated government datasets are not necessarily updated in parallel to movement in the population. London boroughs would need assurance that population estimates were of equivalent quality to other areas of the country 
 
and to date this has not been demonstrated through the research programme. Without this, relying on these sources for population estimates will give an inaccurate count. London Councils would also raise a concern that the proposals largely appear to ignore the role of local authorities, the data they hold locally such as council tax records and their potential to validate any centrally produced population statistics. 

 
Implementation risks There are also concerns with the considerable risks around developing the infrastructure needed to enable data sharing. Whether this is through necessary development of new computer systems and/or legislation, there would be significant organisational issues to overcome in sharing of data across Government departments, particular in the light of previous experience such as developing I.T. systems for Universal Credit.  The consultation document itself highlights the experience of Scandinavian countries and the length of time required to fully implement such an approach successfully. 

London Councils would also raise two further issues for consideration, namely public acceptance for administrative data to be used in this way and the security issues around holding this data safely. 

Summary If as it stands this option was agreed upon by Parliament as the preferred approach then London Councils believes that a 'dual running' approach to the next census should be undertaken. It would be necessary for an online census with 100% population coverage to be run concurrently, to enable any meaningful population statistics to be produced. This would help mitigate uncertainty around implementation of new methods and new approaches as well as development of new computer systems. 

An online census once a decade London Councils believes that this option is of lower risk and offers the most potential to meet London's population statistics needs as it currently stands. 

 
Valuable smaller area statistics London Councils welcomes the potential for the continued provision of detailed information at Output Area (OA) level as well as detailed cross-tabulation information. London boroughs need this to understand their communities, inform policy development and ensure service provision is appropriate. For example, one borough has used census OA information to develop its housing policy and to map the incidence of private rented sector homes geographically. OA level data enabled analysis to show that concentrations of the private rented sector were around main roads and for plans to be formulated accordingly. This important finding would not have been possible from higher level geographic analysis. Other service areas where this information is crucial include: 

- 
Planning: assessing new housing developments child and adult yield estimates, developer 
contributions, S106 agreements, Community Infrastructure Plans and Community Infrastructure Levy charges as well as household projections determining housing 
requirements.  
- 
Education: school places planning (a major pan-London issue).  
- 
Transport: as part of the evidence base for understanding travel patterns and informing 
policy. 
- 
Social Services: Joint Strategic Needs Assessments which are informed by detailed crosstabulations and smaller area statistics for a range of characteristics: population, deprivation, 
disability, limiting long term illness, diversity/ethnicity, benefits and household structure 
data. 
- 
Public health: assessment of needs to identify hot spots for issues. Population, ethnicity, age, gender, NS-SEC, religion, mortality and birth information at LSOA and postcode level. 
 To highlight the importance of sufficiently detailed information and by way of illustration, the Department of Education (DfE) will provide £4.3 billion over the course of Spending Review 2010 (2011-12 to 2014-15) for school capital funding.  The primary basis of allocation is current and future estimations of school populations at small planning levels.  The absence of sufficiently granular and accurate information on pupil numbers could have a significant impact on the distribution of this funding and could increase the already considerable pressure on school places in London - by 2016-17, London faces a shortage in primary and secondary school places of 
118,000. The GLA's population projections as well as the School Rolls Projection service are important to many London boroughs in informing their medium term planning for areas such as housing requirements and provision of school places as well as other service areas. These projections rely on OA data to inform them so any loss of this information will have consequences for the projections and their use by London boroughs. 

 
Fully inclusive completion process The primarily online approach is welcome for its potential to improve the quality of information collected and the efficiency in processing responses. It is also recognised that the online approach will be positive for certain groups of people who can complete the return in this way. However, it is also vital that there should still be other formats for completing information to ensure that all potential respondents are reached. 

The need for ONS to cooperate with London local government London Councils would also stress that lessons must be learnt from the 2011 census. A positive working relationship between ONS and London boroughs was developed through planning and delivery of the most recent census and this was a contributing factor in raising the response rates compared to 2001.  However, local authorities are best placed to understand how to engage with their local communities, particularly those with historically low response rates such as younger adults and those living in the private rented and social rented sectors.   
 
Imputation methodology must be improved London Councils understands that ONS methodology for accounting for missing responses is to use the characteristics of the known population to estimate those of the unknown. London Councils would raise this as a significant risk and urge ONS to work closely with our member boroughs who have undertaken research to understand the types of people and communities that are typical nonresponders to the census and other surveys in general. The hidden population can often have very different characteristics to that part of the population for which information is known. The incidence of numbers of hidden households and people needs to be understood to enable accurate population estimates, as well as their true characteristics.   
 
Annual population estimates are inadequate A related issue to the once a decade census approach has been the mid-year population estimates that have been produced using the census year as the baseline population estimate. As expressed previously there are risks that the true level of mobility and population churn from both internal and 

international migration is not adequately captured for London boroughs. London Councils strongly believes ONS and DCLG should focus efforts and resources on understanding this characteristic of London's population to achieve a better estimation process that reflects the true annual change in London's population. One example could be to evaluate population estimates within the context of using administrative data and housing stock data to help improve accuracy. London Councils welcomes the work done through the Migration Improvement Programme to better understand population movements but would urge that continued work be undertaken in this area to improve understanding. To this effect, London Councils would highlight one of the recommendations made by the Public Administration Select Committee in its July 2013 report for local area migration statistics. Namely that, new sources of data on international migration that are robust enough to provide accurate estimates of annual migration flows to and from local authority areas must be developed. 

London Councils November 2013 

# Leaders' Committee Item No: 08 Proposed Revenue Budget And Borough Subscriptions And Charges 2014/15

Report by: 
Frank Smith Job title: 
Director of Corporate Resources Date: 
10 December 2013 Frank Smith Contact Officer: 
Telephone: 
020 7934 9700 
Email: 
frank.smith@londoncouncils.gov.uk 

 
 
Summary This report proposes the level of boroughs subscriptions and charges to be levied in 2014/15, together with the consolidated revenue income and expenditure budget for 2014/15. The thrust of these proposals were agreed by the London Councils Executive on 29 October and by the Leaders' Committee on 12 November. These specific proposals were considered by the Executive at its meeting on 26 November and the Executive agreed that they should be put before the Leaders' Committee for approval. The subscription and budget proposals for 2014/15 relating to the Grants Committee were considered by the Grants Committee at its meeting on 6 
November and approved by the Leaders' Committee on 12 November. The subscription and budget proposals for 2014/15 relating to the Transport and Environment Committee were considered by the TEC 
Executive Sub-Committee at its meeting on 14 November and will be put before the full TEC meeting on 12 December for final approval. The Leaders' Committee is, therefore, asked to endorse these budget proposals and charges for TEC. 

 
The report also updates the Leaders' Committee on the current level of London Councils reserves after considering all current and proposed commitments and includes a proposal for the repatriation of £1.309 
million of uncommitted reserves to boroughs in 2014/15, as approved by this meeting on 12 November. 

 
 
Recommendations 
The Leaders' Committee is asked to approve the following borough subscription and charges: 
- 
The Joint Committee subscription for boroughs of £172,427 per 
borough for 2014/15, the same level as for 2013/14. The City of London will continue to pay £168,664, in recognition of the fact the City is historically not part of the regional Local Government Employers (LGE) arrangements (paragraphs 10-11);  

- 
The Joint Committee subscription for the MOPAC and the LFEPA 
of £16,700 for 2014/15, the same level as for 2013/14 (paragraph 12); 
- 
An overall level of expenditure of £10 million for the Grants Scheme in 2014/15 (inclusive of £2 million gross ESF programme); and 
- 
that taking into account the application of £1 million ESF grant,  
net borough contributions for 2014/15 should be £9 million, the 
same level as for 2013/14 (paragraphs 13-15).; 
The Leaders' Committee is also asked to endorse the following subscription and charges for TEC for 2014/15, which were considered by the TEC Executive Sub-Committee on 14 November,  and which will be considered by the full meeting of TEC on 12 December: 

- 
The Parking Core Administration Charge of £1,500 per borough and for TfL (2013/14 - £1,500) (paragraph 16);  
- 
The total Parking Enforcement Service Charge of £0.4519 per PCN, which will be distributed to boroughs and TfL in accordance with the number of PCNs issued in 2012/13 (2013/14 - £0.4519 per PCN; paragraphs 23-24); 
- 
The Freedom Pass Administration Charge of £8,674 per borough 
(2013/14 - £8,674) (paragraph 18);  
- 
The Taxicard Administration Charge of £4.00 per permit (2013/14 
- £4.00) (paragraph 19); 
- 
The Lorry Ban Administration Charge of £98,612 in total, net of 
estimated PCN income, to be apportionment by population figures, with TfL paying the average borough charge of £3,287 (2013/14 - 
£103,172; TfL charge £3,439) (paragraph 20);  
- 
The Parking and Traffic Appeals Charge of £38.54 per appeal or 
£36.92 per appeal where electronic evidence is provided by the 
enforcing authority (2013/14 - £41.38/£39.81 per appeal) 
(paragraphs 25-26);  
- 
Congestion Charging Appeals - to be recovered on a full cost 
recovery basis, as for 2013/14, subject to the continuing 
agreement of the GLA under existing contractual arrangements (paragraph 27); 
- 
The TRACE (Electronic) Charge of £10.40 per transaction 
(2013/14 - £10.40) (paragraphs 28-30);  

- 
The TRACE (Fax) Charge of £12.83 per transaction (2013/14 -   
£12.83) (paragraphs 28-30); and 
- 
The PEC, PED and PIE Charges of £0.20 per transaction (2013/14 - £0.20) (paragraphs 28-30). 
On the basis of the above subscriptions and charges, the Leaders' Committee is asked to approve: 

- 
The consolidated revenue expenditure budget for 2014/15 for London Councils of £392.755 million, as per Table 4 at paragraph 
32 and Appendix A of this report; 
- 
The consolidated revenue income budget for 2014/15 for London Councils of £392.755 million, also as per Table 4 at paragraph 32 
and Appendix B; 
- 
Within the total income requirement, the use of London Council reserves of £1.902 million in 2014/15, inclusive of the £1.309 
million repatriation to borough in 2014/15, as detailed in paragraph 53.  
The Leaders' Committee is also asked to note: 

- 
The position in respect of forecast uncommitted London Council reserves as at 31 March 2014, as detailed at paragraphs 51-57; 
and 
 
- 
The positive statement on the adequacy of the residual London Councils reserves issued by the Director of Corporate Resources, 
as detailed in paragraphs 58-59. 

## Introduction

1. At its meeting on 29 October 2013, London Councils Executive agreed an approach to the 
London Councils budget for 2014/15, the final year of the current three-year financial strategy. This approach was endorsed by the Leaders' Committee at its meeting on 12 November 2013. 
2. To summarise, the approach proposes: 
- 
A one-off return of uncommitted reserves to boroughs for 2014/15, totalling £1.309 
million across all three funding streams; 
- 
Absorption of salary pressures via efficiencies and no change to the base core 
subscription level for the three funding streams for 2014/15 over the 2013/14 level; and 
- 
Marginal increases in the administrative charges for Freedom Pass, Taxicard and the PATAS hearing centre to cover the salary pressures for 2013/14 and 2014/15 to be managed through the further use of uncommitted TEC reserves. 
3. This approach will allow the Leaders' Committee that emerges following the 2014 elections to 
consider options later in 2014/15 over the future shape and direction of London Councils. 4. This report, therefore, proposes the level of borough subscriptions and charges to be levied 
in 2014/15, together with the indicative consolidated revenue income and expenditure budget for 2014/15. The report also highlights the level of uncommitted reserves and proposes the 
return of £1.309 million to boroughs, spread across all three funding streams, in the form of a 
one-off payment in 2014/15. These proposals were endorsed by the Executive on 26 
November and are recommended to this meeting for approval. 5. The timetable for the approval of the budget for 2014/15 is as follows: 
- 
29 October - The Executive approved an approach to the 2014/15 budget setting 
process; 
- 
6 November - Grants Committee considered and agreed the indicative grants budget 
and borough contributions for 2014/15 and made recommendations to the Leaders' 
Committee for approval; 
- 
12 November - Leaders' Committee approved the grants budget and borough 
contributions for 2014/15, following recommendations from the Grants Committee 
meeting on 6 November and endorsed the approach to the 2014/15 budget setting process agreed by the Executive on 29 October; 

- 
14 November - TEC Executive Sub-Committee considered the indicative budget and 
borough charges for 2014/15 and made recommendations to the full TEC Committee; 
- 
26 November - The Executive considered a report on the indicative consolidated budget 
and borough charges for 2014/15 and made recommendations to the Leaders' 
Committee for approval; 
- 
10 December - This meeting considers the indicative consolidated budget and borough 
charges for 2014/15, following recommendations from the Executive on26 November. This report includes the indicative budget and borough charges for TEC which Leaders' 
are being asked to endorse; and 
- 
12 December - full TEC Committee - considers recommendations of TEC Executive 
Sub-Committee and approves final budget and charges for 2014/15. The views of this 
meeting will be reported orally to the full TEC meeting. 

## Current Position On Core Subscriptions And Other Charges

6. Members will recall that during the three-year period since 2010/11: 
- 
The Joint Committee core subscription has been reduced by £85,536 or 33.2%; 
- 
The TEC core  parking subscription has been reduced by £500 or 25%; 
- 
Average borough contributions towards the administration of the grants scheme have 
reduced by nearly 68%, with borough contributions towards the commissioned grants 
programme itself reducing from £24.9 million to £8.54 million, a reduction of 65.7%; and 
- 
The three main TEC administrations charges for direct services - Freedom Pass, 
Taxicard and Lorry Control, have reduced by between 27% and 76%. 
 
7. The accumulative savings passed onto member boroughs since 2010/11 amount to £54.6 
million (including the £825,000 one-off payment for 2013/14), £44.5 million of which relates to the reduction in the grants programme, including administration. 
 
8. The savings achieved over this period reflect the full year effect of the decision made by the 
Leaders' Committee in November 2010 regarding the future size and shape of London Councils, which resulted in a 39% reduction in total staffing numbers. All of these savings have now been banked. Following borough elections in 2014, discussions will begin with members on the future direction and shape of London Councils and a new three-year 
financial strategy to support that. Before then, a decision needs to be reached about the budget for 2014/15. 

## Proposed Borough Subscriptions And Charges

9. The following paragraphs detail the proposed borough subscriptions and charges to 
boroughs for 2014/15. 

## Joint Committee Core Subscription

10. The proposed amount to be levied on member boroughs in respect of the JC core and 
associated functions in 2014/15 is £172,427, the same level of the JC subscription for the 
current year.  However, the subscription reflects: 
- 
some emerging pressures on running costs, including the 1% pay award, which had previously not been budgeted for. The Executive agreed that this and other pressures be managed by delivering on some further efficiencies identified by the Management Board over the last year, including some procurement savings; and 
- 
a reduction of £33,000, or £1,000 per borough arising from supporting continuing YPES 
regional activities through uncommitted reserves accumulated in previous years. 
 
11. The City of London will continue to pay a baseline £168,664 (£3,763 less) in recognition of 
the fact the City is historically not part of the regional Local Government Employers (LGE) arrangements. 12. In line with the standstill position for boroughs, it is proposed that the Joint Committee 
subscription for the MOPAC and the LFEPA for 2014/15 is £16,700, the same level as for the 
current year. 

## Grants Programme 2014/15

13. The grants programme for the current year, as agreed by the Leaders' Committee in 
November 2012 is £10 million, inclusive of gross ESF expenditure of £2 million. At its 
meeting on 6 November 2013, the Grants Committee agreed the continuation of a borough 
funded grants programme of £8 million for 2014/15 and a matched borough/ESF programme 
of £2 million, to which the boroughs would contribute £1 million. This budget was 
recommended for approval by the Leaders' Committee, which was duly given on 12 
November. 
14. The effect of an £8 million borough funded grants programme augmented by a jointly funded 
ESF grants programme of £2 million is shown in the Table 1 below:   
 

Table 1 - Indicative Grants Budget 2014/15 
  
2013/14 
2014/15 
 
 
Approved 
Indicative 
Variance 
  
£000 
£000 
£000 
LC grants programme 
7,600 
7,600 
- 
ESF grants programme 
1,880 
1,880 
- 
Sub-Total 
9,480 
9,480 
- 
Grants Administration 
520 
520 
- 
Proposed one –off payment to boroughs 
- 
800 
800 
Total expenditure 
10,000 
10,800 
- 
Financed by: 
Borough contributions to grant payment 
(8,540) 
(8,540) 
- 
 
Borough contributions to grants administration 
(460) 
(460) 
- 
Total borough contributions 
(9,000) 
(9,000) 
- 
ESF grant 
(1,000) 
(1,000) 
- 
Total Income 
(10,000) 
(10,000) 
- 


Transfer from Reserves 
- 
(800) 
(800) 


Net expenditure 
0 
0 
- 

 15. The budget in Table 1 above assumes the continuation of: 
- 
A core, pan-London scheme of commissioned services to meet agreed service priorities 
of £7.6 million, which includes the membership subscriptions for boroughs for London Funders of £60,000;  
- 
An additional gross sum of £1.88 million relating to a continuance of the current ESF 
grants programme; 
- 
An indicative gross grant payments budget, therefore, of £9.48 million; 
- 
An additional provision for grants administration of £520,000. This comprises of 5% of the 
boroughs grants budget of £8 million, amounting to £400,000, plus 5.99% of the £2 million gross ESF programme, amounting to £120,000 (which reflects the more intense 
monitoring arrangements of the ESF programme); and 
- 
Borough contribution of £9 million and ESF grant income of £1 million to fund the total 
expenditure requirement of £10 million. For 2014/15 boroughs will receive a one-off 
payment from uncommitted Grants Committee reserves, which amounts to £800,000 in total and which will be distributed in accordance with the ONS 2012 mid-year population 
data. 
 

## Tec Core Parking Subscription

16. This subscription is currently £1,500 per borough and there is little scope to reduce this 
minimal charge to boroughs, so, as agreed by the Leaders' Committee in November 2010, efforts are concentrated on seeking further efficiencies in the overhead cost for TEC direct 
services. Since 2010/11, these charges have been reduced by between 27% and 76%. 
 

## Tec Direct Services

17. TEC currently provides three services direct to boroughs and one to TfL, which are recouped 
by an annual administration fee - the Freedom Pass, Taxicard and the lorry control scheme. 
In overall terms, a sum of £802,000 needs to be recouped from boroughs and TfL in 2014/15, compared to £797,000 for the current year.  The proposed level of charge for each direct service, compared to those for the current year are detailed in Table 2 below: 

Table 2 - Proposed TEC Direct Services Administration Charge 2014/15  
Charge 
Basis 
2014/15 
2013/14 
Variance 
 
(£) 
(£) 
(£) 
% 
Freedom Pass 
Per borough 
8,674 
8,674 
- 
- 
Taxicard 
Per member 
4.00 
4.00 
- 
- 
Lorry Control 
Average 
3,287 
3,439 
(152) 
(4.42) 

 
18. The **administration of the Freedom Pass** covers London Councils costs in negotiating the 
annual settlements and managing the relationships with transport operators and other 
contractors. After applying TEC reserves of £29,747, the proposed charge for 2014/15 is £8,674 per borough, no change on the charge for 2013/14.  Since 2010/11, this charge to boroughs has reduced by £5,642 per borough, or 39.6%. 
 
19. The **administration of the Taxicard Scheme** covers London Councils costs in processing 
and issuing passes to members and managing the relationships with various contractors. After applying TEC reserves of £26,385, the proposed unit cost to boroughs remains at £4.00 per members permit for 2014/15, no change on the charge for 2013/14. Since 
2010/11, this charge to boroughs has reduced by £1.49 per Taxicard member, or 27.1%. 
20. The **Lorry Control administration charge** is calculated in the same manner as the 
Freedom Pass and Taxicard administration charge; although it is apportioned to boroughs in 
accordance with the ONS mid-year population figures for, in the case of 2014/15, the 
population data for 2012 is used. The total cost of administering the scheme is estimated to be £548,612 in 2014/15, compared to £553,172 in 2013/14. After consideration of projected income of £450,000 from PCNs issued in relation to the scheme, the total sum to be apportioned to boroughs amounts to £98,612, a reduction of £4,560, or 4.4%. The average 
charge for the 29 participating boroughs, plus TfL will, therefore, reduce by £152 from £3,439 
for 2013/14 to £3,287 for 2014/15. Since 2010/11, this charge to boroughs has reduced by 
an average sum of £11,237 per borough, or 77.4%. 

## Tec Traded Services

21. A further set of services provided by TEC relate to various parking and traffic activities, 
primarily the Parking Appeals Service, or PATAS. A unit charge for each of these 'traded' 
services is made to the users, which covers the marginal costs of these services. The 
volumes of these transactions are solely generated by the borough; London Councils has no influence on the levels generated. In addition an amount, apportioned by the number of 
PCNs issued by each borough and TfL, covers the fixed costs of the parking related 
services, principally PATAS, such as the Angel Square hearing centre and the Capita 
managed services contract, plus some supporting policy development costs. From 2013/14, a contribution to these overheads is made from the contract with the British Parking 
Association (BPA) to hear appeals in respect of PCN's issued on private land, known as 
POPLA (Parking Appeals on Private Land). 
22. The proposed level of charge for each traded service, compared to those for the current year 
is detailed in Table 3 below: 

Table 3 - Proposed TEC Traded Services Unit Charges 2014/15  
Charge 
2014/15 
2013/14 
Variance 
 
(£) 
(£) 
(£) 
% 


Parking Enforcement Service Charge (total charge) 
0.4519 
0.4519 
- 
- 
Parking and Traffic Appeals 
38.54 
41.38 
(2.84) 
(6.87) 
Parking and Traffic Appeals (Electronic) 
36.92 
39.81 
(2.89) 
(7.25) 
TRACE Electronic 
10.40 
10.40 
- 
- 
TRACE Fax 
12.83 
12.83 
- 
- 
TEC, PED & PIE 
0.20 
0.20 
- 
- 

23. The **Parking Enforcement Service Charge** is allocated to users in accordance with the 
number of PCNs issued.  For 2014/15, expenditure of £2.902 million needs to be recouped, 
compared to £2.817 million for 2013/14. 24. After top-slicing this amount for the estimated fixed costs of £493,000 attributable to the 
contract that covers congestion charging and LEZ offences,  a total of £2.409 million remains to be apportioned through the 4.892 million PCN's  issued by boroughs and TfL in 2012/13 in respect of parking, bus lane, moving traffic and lorry ban enforcement, compared to 4.932 million issued in 2011/12. The marginal reduction in the number of PCNs issued over the two 
comparative years reduces the charging base, which together with an increase in costs leads 
to an increase in the underlying unit charge to boroughs and TfL for 2014/15. However, after 
applying TEC reserves of £198,153, the unit charge will remain at £0.4519 per PCN for 2014/15, no change on the per PCN charge for 2013/14.    
 
25. The estimated volume of **PATAS appeals** for 2014/15, based on volumes in the first half of 
2013/14, is 70,000, no change on the budgeted figure of 70,000 for the current year. The 
actual number of appeals heard in 2012/13 was 69,468 including Statutory Declarations, 
Moving Traffic Offences and Lorry Ban Appeals. 26. Based on the average throughput of appeals for the first six months of the current year of 
3.29 appeals heard per hour (an improvement on the budgeted figure of 2.71 appeals per hour) and an estimate of 70,000 appeals being heard during 2014/15, the indicative unit cost for 2014/15 is £38.54, a reduction of £2.84, or 6.87% on the charge of £41.38 for 2013/14. 
The reduction in costs is directly linked to a continued improvement in the actual throughput 
rate, following revised administrative and case management procedures introduced by the Chief Parking Adjudicator over the past two years. For appeals where electronic evidence is 
provided by an enforcing authority, the unit cost will reduce by a further £1.62 to £36.92 in 
recognition of the reduced charge from the contractor, Capita. 
 
27. For **Congestion Charging Appeals**, the estimated volume of appeals for 2014/15, based 
volumes in the first half of 2013/14, is 8,000, no change on the budgeted figure of 8,000 for 
the current year. The actual number of CC Appeals dealt with in 2012/13, including Statutory 
Declarations, was 7,721. For 2014/15, it is recommended that there be a continuation of the 
agreement made in 2006 with TfL/GLA officials to reimburse London Councils on a costrecovery basis for congestion charging. The continuation of this agreement will ensure that a 
break even position continues in respect of these transactions. Negotiations have started with the GLA to trigger the extension of this contract for a further 13 months until December 
2015, in return for a review of the fixed cost element of the contract. 

 
28. In respect of **all other parking traded services**, the variable charges form part of the 
parking managed service contract provided by Capita, the volumes of which are not 
controlled by London Councils. As stated in paragraph 21, the individual boroughs are responsible for using such facilities. The volumes are based on those currently being processed by the contractor and are recharged to the boroughs, TfL, the GLA and other users as part of the unit cost charge. Current trends during the first half of 2013/14 suggest 
that for the first time in a number of years, there has been an overall marginal increase in the use of these services. 29. The estimated increase in expenditure between 2013/14 and 2014/15, due to a combined 
increase in volumes and an assumed 2.2% price increase from July 2014 is £43,134. 
However, the corresponding estimated increase in income over the same period due to the projected rise in volumes is £94,966, leading to a projected net overall increase in budgeted income of £51,832 for 2014/15. 30. It is recommended that the unit charges for the remaining parking service provided by TEC 
remain at the same level as for the current year, as detailed in Table 3 above, with no proposed increase in unit charges to users. 
 
31. The provision of an appeals service for the British Parking Association (BPA) in respect of 
parking on private land, known as **POPLA** started in November 2012. The estimated fixed 
and variable costs of providing this service in 2014/15 are £856,000, based on hearing 
23,400 appeals, which is fully rechargeable to the BPA.  

## Proposed Revenue Budget For 2014/15

32. Based on the proposed level of subscription and charges, as detailed in paragraphs 10-31 
above, the proposed revenue budget position for 2014/15, is summarised in Table 4 below. A 
detailed breakdown of proposed income and expenditure is shown at Appendices A and B to 
this report. 

|           |           | Joint    |
|-----------|-----------|----------|
| Grants    | TEC       | Total    |
| Committee | Committee |          |
|                        | £000    | £000     | £000      | £000           |
|------------------------|---------|----------|-----------|----------------|
| Indicative Expenditure | 8,160   | 10,714   | 373,624   | 392,498        |
| Central Recharges      | 129     | 86       | 42        | 257            |
| Total Expenditure      | 8,289   | 10,800   | 373,666   | 392,755        |
| Indicative Income      | (6,744) | (10,000) | (373,241) | (389,985)      |
| Use of Reserves        | (677)   | (800)    | (425)     | (1,902)        |
| Sub-total              | (7,421) | (10,800) | (373,666) | (391,887)      |
| Central Recharges      | (868)   | -        | -         | (868)          |
| Total Income           | (8,289) | (10,800) | (373,666) | (392,755)      |
|                        |         |          |           | Indicative Net |
| Position               | -       | -        | -         | -              |

 33. The detailed breakdown of the budgets for the Joint Committee, Grants Committee and TEC 
funding streams for 2014/15 is outlined in paragraphs 34-49 below.  

## Grants Committee

34. The budget movement for the Grants Committee for 2014/15 is as follows: 

Table 5 - Indicative Grants Committee budget movements for 2014/15 
 
£000 
Expenditure: 
 
Revised budget 2013/14 
10,000 
Proposed budget 2014/15 
10,800 
Budget Movement 
800 
 
 
Income 
 
Revised budget 2013/14 
(10,000) 
Proposed budget 2014/15 
(10,800) 
Budget Movement 
(800) 
 
 
Net Budget Movement 
- 
 
 
Developments - expenditure: 
 
One-off payment to boroughs 
800 
 
 
Developments - income: 
 
Transfer from reserves 
(800) 
 
 
Total 
- 
 
 
Net Budget Movement 
- 

 35. The budget figures above, therefore, represent a continuation of: 
- 
A core, pan-London scheme of services to meet agreed service priorities of £7.6 million, 
which includes the membership subscriptions for boroughs for London Funders of £60,000;  
- 
An additional gross sum of £1.88 million relating to a continuance of the current ESF grants programme; 
- 
An indicative gross grant payments budget of £9.48 million; 
- 
A provision for grants administration of £520,000. This comprises of 5% of the boroughs 
grants budget of £8 million, amounting to £400,000, plus 5.99% of the £2 million gross ESF programme, amounting to £120,000 (which reflects the more intense monitoring arrangements of the ESF programme);  
- 
Borough contribution of £9 million and ESF grant income of £1 million to fund the total expenditure requirement of £10 million. Since 2010/11, annual borough contributions towards the grants programme have reduced from £24.9 million to £9 million, a reduction 
of £15.9 million, or 64%;  
- 
A one-off payment to boroughs, totalling £800,000, apportioned in accordance with the 
ONS 2012 mid-year population figures and funded by a transfer from general reserves. 

## Transport And Environment Committee

36. Excluding the position for the Freedom Pass and Taxicard, which are dealt with in 
paragraphs 38-47 below, the position for TEC for 2014/15 is detailed in Table 6 below: 
 

Table 6 - Indicative TEC budget movements for 2014/15 
Expenditure: 
£000 
Revised budget 2013/14 
13,486 
Proposed budget 2014/15 
13,607 
Budget Movement 
121 
 
 
Income 
 
Revised budget 2013/14 
(13,486) 
Proposed budget 2014/15 
(13,812) 
Budget Movement 
(326) 
 
 
Net Budget Movement 
(205) 
 
 
Developments - expenditure: 
 
Reduction in Freedom Pass administration 
(27) 
Reduction in Taxicard administration 
(29) 
Reduction in lorry control administration 
(4) 
Increase in PATAS administration 
85 
Increase in POPLA administration 
183 
Reduction in Health Emergency Badge administration 
(17) 
Increase in non-operational staffing costs 
94 
Maternity Cover budget 
30 
Volumes changes - adjudicators fees 
(319) 
Volume changes - Capita variable costs 
65 
Volume changes - Capita fixed costs 
(72) 
| Reduction in other running costs                              | (76)    |
|---------------------------------------------------------------|---------|
| Reduction in central recharges                                | (16)    |
| One-off payment to boroughs and TfL                           | 170     |
| Sub-Total                                                     | 67      |
|                                                               |         |
|                                                               |         |
| Inflation:                                                    |         |
|                                                               |         |
| 2.2% increase on contractual commitments                      | 30      |
| 1% increase on salary costs                                   | 24      |
|                                                               |         |
| Budget Movement on expenditure                                | 121     |
|                                                               |         |
| Developments - income:                                        |         |
|                                                               |         |
| Increase in borough contributions to direct services          | (5)     |
| Volumes changes - appeals income                              | 242     |
| Volume changes - other parking services income                | 18      |
| Increase in income from replacement Freedom Passes            | (100)   |
| Increase in income from BPA for POPLA                         | (183)   |
| Other adjustments                                             | 14      |
| Proposed increase in transfer from general reserve            | (312)   |
| Budget Movement on income                                     | (326)   |
|                                                               |         |
| Net Budget Movement                                           | (205)   |
|                                                               |         |
| Represented by:                                               |         |
|                                                               |         |
| Application of replacement Freedom Pass income to reduce cost |         |
| of Freedom Pass settlement to boroughs                        |         |
|                                                               |         |
| (205)                                                         |         |

 37. The proposed subscription and charges for TEC related services in 2014/15, which is 
detailed in paragraphs 16-31 of this report provide the rationale for the majority of the budget 
movements detailed in Table 6. The proposed staffing budget for TEC for 2014/15 is 
illustrated in Table 7 below: 

Table 7– TEC Indicative Staffing Budget 2014/15 
 
£000 
2013/14 Revised Budget 
2,204 
Salary pressures, including pay award 
148 
Net increase in POPLA staff (rechargeable to the BPA) 
118 
2014/15 Base Budget 
2,470 
 
 
Split between: 
 
Services - Parking and Traffic 
113 
Services - PATAS 
314 
Services - RUCAT 
175 
Services - POPLA 
554 
Services - Transport and Mobility 
688 
PAPA - Policy 
338 
PAPA - Communications 
232 
Chief Executive - Committee Servicing 
56 
2014/15 Base Budget 
2,470 

## Freedom Pass

38. The main settlement with TfL for concessionary travel on its service is estimated to be 
£323.588 million, although the final figure is subject to confirmation following the announcement of the Mayor's fares increase for 2014. This represents a provisional increase of £14.841 million, or 4.8%, on the figure of £308.747 million for 2013/14. 39. The budget of £2 million for payments to other bus operators for local journeys originating in 
London has been held at the 2013/14 level of £2 million for 2014/15, based on current claims 
being lodged by operators. 40. The budget in respect of the Association of Train Operating Companies (ATOC) has been 
increased by £864,000 to take into account the anticipated settlement for 2014/15. The base 
of £19.950 million has been reduced by £99,000; with the revised base of £19.851 million 
has then been subject to the RPI +1.75% increase, in line with the four year deal agreed by TEC in February 2011 and which runs until 2014/15. This amounts to £963,000, making the budget for 2014/14 total £20.814 million. 41. The budget for the survey and pass issuing costs has been adjusted as detailed in Table 8 
below: 

Table 8 - Survey and Reissue Costs budget 2014/15  
 
£000 
2013/14 base budget 
794 
Plus increase in pass processing (including 60+) 
55 
Plus increase in Post Office charges 
20 
Plus increase in call centre volumes - letter/emails 
48 
Plus increase in call centre volumes - phone calls 
87 
Plus inflation/refunds 
1 
Sub-Total 
1,005 
Less reduction in payment processing costs 
(46) 
Less reduction in HOPS costs 
(1) 
Less printing costs 
(6) 
Less ESP annual service cost 
(2) 
2014/15 base budget 
950 

 42. The increased cost of survey and reissue costs of £156,000 is offset by an increase on the 
estimated income collected from the £10 charge to replace lost and faulty passes. It is 
estimated that up to £500,000 may be collected in respect of reissuing lost and damaged passes in 2014/15. 
43. As in 2013/14, there is a contribution of £400,000 to the specific reserve to accumulate funds 
to offset the cost of the next pass reissue exercise in 2015, which is currently estimated to 
cost £2.611 million. At the end of the current financial year, this provision will be £1.8 million and the £400,000 in relation to 2014/15 will increase this amount to £2.2 million. 44. Final confirmation on the actual amounts payable to operators should be available in time for 
the meeting of the full TEC Committee on 12 December and any late variations to these 
provisional figures will be tabled at the full TEC meeting.  
 
45. A summary of the freedom pass costs for 2014/15, compared to the current year, can be 
summarised in Table 9 below: 
 

| Estimated Cost of Freedom Pass          | 2014/15(£000)    | 2013/14(£000)    |
|-----------------------------------------|------------------|------------------|
| TfL Settlement                          | 323,588          | 308,747          |
| ATOC Settlement                         | 20,814           | 19,950           |
| Non TfL Bus Operators Settlement        | 2,000            | 2,000            |
| Survey and Reissue Costs                | 950              | 794              |
| Provision for 2015 freedom pass reissue | 400              | 400              |
| Total Cost                              | 347,752          | 331,891          |

 46. The total cost of the scheme is fully funded by boroughs and the estimated cost payable by 
boroughs in 2014/15 is £347.752 million, less income of £205,000 relating to income for 
replacement Freedom Passes, which compares to £331.891 million payable for 2013/14. 
This represents an increase of £15.656 million or 4.7%.  

## Taxicard

47. TfL will provide an annual fixed S.159 grant of £9.656 million, inclusive of annual Taxicard 
tariff inflation of £95,600 (1%), compared to £9.56 million for 2013/14. The total borough 
contribution towards the Taxicard scheme in 2014/15 is estimated to be £2.651 million, as 
the decision on boroughs' contributions is a matter for boroughs to take individually. The base budgetary provision for the contract with CityFleet Networks Limited, owner and operator of Computer Cab Plc., with effect from 1 April 2014, will be £12.307 million, a 
reduction of £1.537 million on the revised budget of £13.845 million for the current year. 

## Joint Committee

48. The position for the Joint Committee for 2014/15 is as follows: 

Table 10 - Indicative Joint Committee budget movements for 2014/15 
 
£000 
Expenditure: 
 
Revised budget 2013/14 
9,032 
Proposed budget 2014/15 
8,289 
Budget Movement 
(743) 
 
 
Income 
 
Revised budget 2012/13 
(9,032) 
Proposed budget 2013/14 
(8,289) 
Budget Movement 
743 
 
 
Net Budget Movement 


Developments - expenditure: 
 
Change in one-off payment to boroughs 
(486) 
Reduction to 2012/13 carried forward earmarked budgets 
(380) 
Reduction in improvement and efficiency projects 
(17) 
Savings on photocopier leasing contract 
(49) 
London Councils website system development 
28 
Salary pressures, including pay award 
190 
Reduction in YPES running costs 
(29) 
 
 
Total 
(743) 
 
 
Developments - income: 
Reduction in borough contributions to YPES regional programme 
33 
Reduction in YPES special purposes grant 
56 
Reduction in income from external lettings and room hire 
25 
Net reduction in transfer from reserves 
629 
 
 
Total 
743 
 
 
Net Budget Movement 
- 

 49. The key elements included within the net budget movement are detailed below: 
 

- 
Change to one-off payment to boroughs - the total repatriated amount to boroughs 
from Joint Committee reserves for the current year was £825,000; the proposed amount for 2014/15 is £339,000, a reduction of £486,000. As previously indicated, it is proposed that the total amount repatriated to boroughs - taking account not just Joint Committee reserves but the Grants and TEC funding streams also - will exceed the amount relating to 2013/14. 
- 
Amounts brought forward from 2012/13 - The earmarked sums of £213,000 in 
respect of improvement and efficiency work , £50,000 in respect of residual premise 
expenditure arising from the 2012 refurbishment and £117,000 relating to the Housing Directors Fund need to be removed from the base budget for 2014/15; 
 
- 
Reduction in Improvement and Efficiency projects - the £60,000 provision for the 
Information Security Platform for London has been delivered within a £43,000 budget for 
the last two financial years, so a savings of £17,000 has been taken for 2014/15; 
 
- 
Printing and photocopying - the leasing arrangement for multifunctional devices was 
retendered with effect from September 2013 and is expected to realise savings of £49,000 in 2014/15 and potentially a further £25,000 in 2015/16, dependent upon levels of usage; 
 
- 
Website development - a provision of £28,000 has been included in the Joint 
Committee budget for 2014/15 to fund a redesign and relaunch of London Councils website in early 2014; 
 
- 
Salary pressures, including the pay award - this covers the Joint Committee's share 
of pressures on employee costs that are emerging, including the anticipated pay award in 2014/15 and establishing a small provision for maternity cover. The anticipated cost 
of these measures in 2014/15 is £190,000; 
 
- 
16-19 YPES running costs - this is the final year of the receipt of the DFE special 
purposes grant for YPES revenue costs, with a £56,000 reduction in grant impacting on 2014/15. To cover this funding reduction, savings on running costs of £29,000 have been identified, with the residual gap funded by an additional transfer from reserves of 
£27,000; 
 
- 
YPES funding - as stated above, there has been a reduction in grant for YPES of 
£56,000 in 2014/15. In addition, borough contributions towards the funding of the regional programme are recommended to reduce by £33,000, with the shortfall being 
made up from uncommitted reserves accumulated from YPES activities since 2010/11; 
 
- 
Room Bookings income - the budget target of £150,000 was not achieved during 
2012/13 due to the unavailability of facilities for a significant time period whilst the 
refurbishment of the building was taking place. This would appear to have had an effect of the external customer base that previously used the meeting room facilities at Southwark Street. It is likely that the income target will be underachieved by £25,000 in the current year, so it is proposed to reduce this income target by £25,000 for 2014/15; 
and 

- 
Transfer from reserves - The total amount of reserves required in 2014/15 is 
estimated to be £677,000, a reduction of £629,000 on the figure of £1.306 million for the current year. The £677,000 recommended for use in 2014/15 covers the proposed oneoff payment to boroughs of £339,000, £174,000 to fund the shortfall in the YPES 
revenue and regional programmes expenditure and £164,000 to fund the various salary 
pressures that have arisen since the start of the current financial year that impact on the Joint Committee. 

## Externally Funded Projects

50. In addition to the proposed expenditure of £392.755 million for largely borough funded 
activity, expenditure on activities financed through external contributions is expected to be £8.7 million in 2014/15, with funding being received through various external sources to fully fund the projects. Once confirmation of continued funding into 2014/15 is received from funders over the coming months, budget plans for expenditure will be revised accordingly to ensure that they match the available funding. 

## Updated Position On Reserves

51. The current position on the overall level of London Councils reserves, is detailed in Table 11 
below, which includes the forecast outturn position for the current year at the half-year stage, which is subject to a separate report to this meeting: 

 
Total 
 
Transport and 
Environment 
Joint 
Committee 
Grants 
Committee 
Committee (£000) 
(£000) 
(£000) 
(£000) 
 
General 
Specific 
General 
S.48 
ESF 
 
2,251 
1,400 
5,303 
1,142 
610 
10,706 
Total  reserves at 1 April 2013 
(113) 
- 
(1,556) 
- 
- 
(1,669) 
Resources committed in 2013/14 
- 
400 
- 
- 
- 
400 
Transfer to 2015 freedom pass issue reserve 
- 
(1,800) 
(881) 
- 
(781) 
(3,462) 
Provisional commitments for 2014/15 and 2015/16 
|            |       |     |       |       |     | Projected (deficit)/surplus for    |
|------------|-------|-----|-------|-------|-----|------------------------------------|
| 2013/14    | 421   | -   | 8     | 62    | 171 | 662                                |
|            |       |     |       |       |     | Uncommitted reserves 31            |
| March 2014 | 2,559 | -   | 2,874 | 1,204 | -   | 6,637                              |
|            |       |     |       |       |     |                                    |

52. The current level of commitments from reserves, as detailed in Table 11, come to £5.131 
million and are detailed in full in Table 12  below: 

Table 12– Current Commitments from Reserves  
 
2013/14 2014/15 2015/16 
Total 
 
£000 
£000 
£000 
£000 
Approved transfer from JC general reserves 
- 
- 
- 
- 
Approved transfer from TEC general reserves 
88 
- 
- 
88 
TEC system developments 
25 
- 
- 
25 
Housing Directors Fund  
117 
- 
- 
117 
Capital Ambition legacy projects 
213 
- 
- 
213 
Depreciation provision  
50 
- 
- 
50 
YPES regional funds carried forward 
101 
174 
207 
482 
Slippage of ESG grants funding  
- 
781 
- 
781 
2015 Freedom Pass Issue 
- 
- 
1,800 
1,800 
One-off repayment to boroughs in 2013/14 
825 
- 
- 
825 
Support to the health transition process 
250 
250 
250 
750 
Totals 
1,669 
1,205 
2,257 
5,131 

 53. As detailed in paragraph 2, the Executive meeting on 29 October agreed to a one-off 
repatriation of uncommitted reserves to boroughs for 2014/15, totalling £1.309 million across 
all three funding streams. This approach was endorsed by the Leaders' Committee on 12 
November. This is split across the funding streams as follows: - 
A sum of £800,000 in total returned to boroughs from Grants Committee reserves, 
distributed in accordance with 2012 ONS mid-year population figures; 
- 
£5,000 per borough (and TfL) returned to boroughs from the TEC funding stream. This equates to the one-off levy raised from boroughs in 2006 when TEC finances became unstable due to extreme volatility in traded services volumes and this would effectively be returning this sum to boroughs; and 
- 
£10,000 per borough from Joint Committee reserves. 
 
54. After taking into account the repatriation of £1.309 million and the proposed use of £419,000 
in setting the 2014/15 budget (excluding YPES)  and a further £411,000 estimated to fund 
the 2015 Freedom Pass reissue, the level of uncommitted reserves reduces to £4.498 
million, as detailed in Table 13 below: 
 

## Table 13 - Estimated Residual Uncommitted Reserves As At 31 March 2014

 
Total 
 
Transport and 
Environment 
Joint 
Committee 
Grants 
Committee 
Committee (£000) 
(£000) 
(£000) 
(£000) 
 
General 
Specific 
General 
S.48 
ESF 


Uncommitted reserves 31 March 2014 (Table 11) 
2,559 
- 
2,874 
1,204 
- 
6,637 


One-off repatriation to boroughs 
(170) 
- 
(339) 
(800) 
- 
(1,309) 


Proposed use in setting 2014/15 budget 
(255) 
- 
(164) 
- 
- 
(419) 
Estimated additional resources required for 2015 Freedom Pass issue 
(411) 
- 
- 
- 
- 
(411) 


Estimated residual uncommitted reserves 
1,723 
- 
2,371 
404 
- 
4,498 
 

55. For the Grants Committee, the Grants Executive in September agreed that the level of 
reserves to cover the £8 million S.48 borough funded programme should be set at 3.75% or £300,000. The forecast level of uncommitted reserves of £404,000 exceeds this benchmark; however, there may be a need to upgrade the current IT system to provide more meaningful 
data to compliment the revised monitoring arrangements for the new commissions that were 
agreed by the Grants Committee in February 2013. A business case is currently being 
worked up by officers with the assistance of the City of London IT officers. 
 
56. For TEC, the forecast level of uncommitted reserves of £1.723 million will allow cover for the 
potential continuation of the historical volatility of transactions relating to traded parking 
services, which had seen significant reduction in volumes  since 2009/10 until trends 
emerging in the current year indicate that there is a marginal increase in volumes. The need 
to contribute further resources to the 2015 Freedom Pass issue process over and above the current contract estimate of £2.611 million may also be a call on this uncommitted sum. 57. For the Joint Committee functions, in a period of continuing financial turbulence for London 
local government, there is value in holding some level of reserves as a contingency to fund further one-off incidences of expenditure, such as a potential increase in the employers 
pension contribution rate, to be confirmed by the LPFA by the end of the year. This will allow 
the Leaders' Committee that emerges following the 2014 elections greater flexibility to consider options later in 2014/15 over the future shape and direction of London Councils. 
 
58. Under the Audit Commission's Use of Resources criteria, the Chief Financial Officer of an 
organisation is required to make an annual statement on the adequacy of the level of an 
organisation's reserves. This is achieved by expressing the total level of estimated 
uncommitted reserves as a percentage of operating costs. 59. If the Leaders' Committee approve the options to use uncommitted reserves of £1.902 
million, as detailed in this report, residual uncommitted reserves would reduce to £4.498 
million. This would represent 20.1% of total operating and trading expenditure in 2014/15 of 
£22.352 million. On this basis, the Director of Corporate Resources is content to issue a 
positive statement on the adequacy of the residual London Councils reserves for 2014/15.  
 

## Conclusions

60. The revenue budget and borough subscriptions and charges for 2014/15, as recommended 
in this report, present a broadly standstill position for the final year of the current three-year financial strategy, with the exception of volume related variations. The report also proposes the repatriation of £1.309 million to boroughs from uncommitted reserves in 2014/15, spread across the three funding streams. 
61. This approach will allow the Leaders' Committee that emerges following the 2014 elections to 
consider options later in 2014/15 over the future shape and direction of London Councils. 
 

## Summary

62. This report proposes the level of boroughs subscriptions and charges to be levied in 
2014/15, together with the consolidated revenue income and expenditure budget for 
2014/15. 63. The subscription and budget proposals for 2014/15 relating to the Grants Committee were 
considered by the Grants Committee at its meeting on 6 November and approved by the 
Leaders' Committee on 12 November. 64. The subscription and budget proposals for 2014/15 relating to the Transport and 
Environment Committee were considered by the TEC Executive Sub-Committee at its 
meeting on 14 November and will be put before the full TEC meeting on 12 December for final approval. The Leaders' Committee is therefore being asked to endorse the provisional 
TEC figures for 2014/15. 

## Recommendations

65. The Leaders' Committee is asked to approve the following borough subscription and 
charges: 
 
- 
The Joint Committee subscription for boroughs of £172,427 per borough for 2014/15, the 
same level as for 2013/14. The City of London will continue to pay £168,664, in 
recognition of the fact the City is historically not part of the regional Local Government 
Employers (LGE) arrangements (paragraphs 10-11);  
- 
The Joint Committee subscription for the MOPAC and the LFEPA of £16,700 for 
2014/15, the same level as for 2013/14 (paragraph 12);  
- 
An overall level of expenditure of £10 million for the Grants Scheme in 2014/15 (inclusive 
of £2 million gross ESF programme); and 
- 
that taking into account the application of £1 million ESF grant,  net borough contributions 
for 2014/15 should be £9 million, the same level as for 2013/14 (paragraphs 13-15); 66. The Leaders' Committee is also asked to endorse the following subscription and charges for 
TEC for 2014/15, which were considered by the TEC Executive Sub-Committee on 14 
November, which will then be considered by the full meeting of TEC on 12 December: 
 
- 
The Parking Core Administration Charge of £1,500 per borough and for TfL (2013/14 - 
£1,500) (paragraph 16);  
- 
The total Parking Enforcement Service Charge of £0.4519 per PCN, which will be 
distributed to boroughs and TfL in accordance with the number of PCNs issued in 2012/13 (2013/14 - £0.4519 per PCN; (paragraphs 23-24); 
- 
The Freedom Pass Administration Charge of £8,674 per borough (2013/14 - £8,674) 
(paragraph 18);  
- 
The Taxicard Administration Charge of £4.00 per permit (2013/14 - £4.00) (paragraph 
19); 
- 
The Lorry Ban Administration Charge of £98,612 in total, net of estimated PCN income, 
to be apportionment by population figures, with TfL paying the average borough charge 
of £3,287 (2013/14 - £103,172; TfL charge £3,439) (paragraph 20);  
- 
The Parking and Traffic Appeals Charge of £38.54 per appeal or £36.92 per appeal 
where electronic evidence is provided by the enforcing authority (2013/14 - £41.38/£39.81 per appeal) (paragraphs 25-26);  
- 
Congestion Charging Appeals - to be recovered on a full cost recovery basis, as for 
2013/14, subject to the continuing agreement of the GLA under existing contractual 
arrangements (paragraph 27); 
- 
The TRACE (Electronic) Charge of £10.40 per transaction (2013/14 - £10.40) 
(paragraphs 28-30);  
- 
The TRACE (Fax) Charge of £12.83 per transaction (2013/14 -   £12.83) (paragraphs 28-
30); and 
- 
The PEC, PED and PIE Charges of £0.20 per transaction (2013/14 - £0.20) (paragraphs 
28-30). 67. On the basis of the above subscriptions and charges, the Leaders' Committee is asked to 
approve: 
- 
The consolidated revenue expenditure budget for 2014/15 for London Councils of 
£392.755 million, as per Table 4 at paragraph 32 and Appendix A of this report; 
- 
The consolidated revenue income budget for 2014/15 for London Councils of £392.755 
million, also as per Table 4 at paragraph 32 and Appendix B; 
- 
Within the total income requirement, the use of London Council reserves of £1.902 
million in 2014/15, inclusive of the £1.309 million repatriation to borough in 2014/15, as detailed in paragraph 53. 68. The Leaders' Committee is also asked to note: 
 
- 
The position in respect of forecast uncommitted London Council reserves as at 31 March 
2014, as detailed at paragraphs 51-57; and 
 
- 
The positive statement on the adequacy of the residual London Councils reserves issued 
by the Director of Corporate Resources, as detailed in paragraphs 58-59. 


Financial Implications for London Councils 
 
As detailed in the body of the report. 

 
Legal Implications for London Councils 
 
None 
 
Equalities Implications for London Councils 
 
None 
 
Appendices 
 
Appendix A - the consolidated revenue expenditure budget for London Councils for 2014/15; 
Appendix B - the consolidated revenue income budget for London Councils for 2014/15. 

 
Background Papers 
 
London Councils budget working papers 2010/11 to 2014/15 

## Appendix A Consolidated Expenditure Budget 2014/15

| Jt Ctte                                    | Grants   | TEC     |
|--------------------------------------------|----------|---------|
| Total                                      |          |         |
| £000                                       | £000     | £000    |
| Payments in respect of Concessionary Fares |          |         |
| TfL                                        | 0        | 0       |
| ATOC                                       | 0        | 0       |
| Other Bus Operators                        | 0        | 0       |
| Freedom Pass survey and reissue costs      | 0        | 0       |
| Provision for 2015 freedom pass reissue    | 0        | 0       |
| Freedom Pass Administration                | 0        | 0       |
| Comcab                                     | 0        | 0       |
| Taxicard Administration                    | 0        | 0       |
| Sub-Total                                  |          |         |
| 0                                          | 0        | 360,923 |
| Grant Payments for commissioned services   | 0        | 7,600   |
| ESF grant payments                         | 0        | 1,880   |
| TEC Trading Account Expenditure            |          |         |
| Payments to Adjudicators                   | 0        | 0       |
| Payments to Capita                         | 0        | 0       |
| Payments to Northampton County Court       | 0        | 0       |
| Lorry Control Administration               | 0        | 0       |
| PATAS/CC Administration                    | 0        | 0       |
| POPLA Administration                       | 0        | 0       |
| HEB Income                                 | 0        | 0       |
| Sub-Total                                  |          |         |
| 0                                          | 0        | 11,770  |
| 11,770                                     |          |         |
| Total Direct Services                      | 0        | 9,480   |
| Operating Expenditure                      |          |         |
| Contractual Commitments                    |          |         |
| Capital Ambition legacy project costs      |          |         |
| 305                                        | 0        | 0       |
| YPES Regional/Provider Activities          |          |         |
| 132                                        | 0        | 0       |
| Southwark Street Leasehold Costs           |          |         |
| 935                                        | 0        | 0       |
| Leases for photocopiers                    |          |         |
| 136                                        | 0        | 0       |
| GLE European Contract                      |          |         |
| 66                                         | 0        | 0       |
| External audit fees                        |          |         |
| 24                                         | 2        | 0       |
| CoL Finance/Legal/HR/IT SLA                |          |         |
| 266                                        | 13       | 0       |
| Depreciation                               |          |         |
| 126                                        | 0        | 0       |
| Grants GIFTS system support                |          |         |
| 0                                          | 10       |         |
| 0                                          |          |         |
| 10                                         |          |         |
| Sub-Total                                  |          |         |
| 1,990                                      | 25       | 0       |
| Salary Commitments                         |          |         |
| Officers                                   | 4,110    | 321     |
| Members                                    | 135      | 19      |
| Maternity provision                        | 60       | 10      |
| Sub-Total                                  |          |         |
| 4,305                                      | 350      | 644     |
| Discretionary Expenditure                  |          |         |
| Staff training/recruitment advertising     | 105      | 6       |
| 111                                        |          |         |
| Staff travel                               | 16       | 2       |
| 18                                         |          |         |
| Other premises costs                       | 191      | 0       |
| 191                                        |          |         |
| SS ICT support                             | 86       | 0       |
| 86                                         |          |         |
| Supplies and service                       | 627      | 39      |
| 743                                        |          |         |
| Research                                   | 500      | 12      |
| 552                                        |          |         |
| One-off payments to boroughs               | 339      | 800     |
| 1,309                                      |          |         |
| Other 3rd party payments                   | 1        | 0       |
| 1                                          |          |         |
| Sub-Total                                  |          |         |
| 1,865                                      | 859      | 287     |
| Total Operating Expenditure                | 8,160    | 1,234   |
| Central Recharges                          | 129      | 86      |
| Total Expenditure                          | 8,289    | 10,800  |

## Appendix B Consolidated  Income Budget 2014/15

| Jt Ctte                                              | Grants   | TEC     | Total   |
|------------------------------------------------------|----------|---------|---------|
| £000                                                 | £000     | £000    | £000    |
| Borough contributions to TfL                         |          |         |         |
| 0                                                    | 0        | 323,588 | 323,588 |
| Borough contributions to ATOC                        |          |         |         |
| 0                                                    | 0        | 20,814  | 20,814  |
| Borough contributions to other bus operators         |          |         |         |
| 0                                                    | 0        | 2,000   | 2,000   |
| Borough contributions to surveys/reissue costs       | 0        | 0       | 1,145   |
| Borough contributions to freedom pass administration | 0        | 0       | 286     |
| Income from replacing lost/faulty passes             | 0        | 0       | 500     |
| Borough contributions to Comcab                      | 0        | 0       | 2,651   |
| TfL contribution to Taxicard scheme                  |          |         |         |
| 0                                                    | 0        | 9,656   | 9,656   |
| Borough contributions to taxicard administration     | 0        | 0       | 417     |
| TfL Contribution to taxicard administration          | 0        | 0       | 104     |
| Sub-total                                            | 0        | 0       | 361,161 |
| Borough contribution to grants payments              |          |         |         |
| 0                                                    | 8,600    | 0       | 8,600   |
| ESF Grant Income                                     |          |         |         |
| 0                                                    | 1,000    | 0       | 1,000   |
| Sub-total                                            | 0        | 9,600   | 0       |
| TEC trading account income                           |          |         |         |
| Borough contributions to Lorry ban administration    |          |         |         |
| 0                                                    | 0        | 99      | 99      |
| Lorry ban PCNs                                       |          |         |         |
| 0                                                    | 0        | 450     | 450     |
| Borough parking appeal charges                       |          |         |         |
| 0                                                    | 0        | 2,390   | 2,390   |
| TfL parking appeal charges                           |          |         |         |
| 0                                                    | 0        | 308     | 308     |
| GLA Congestion charging appeal income                |          |         |         |
| 0                                                    | 0        | 320     | 320     |
| POPLA appeals income                                 |          |         |         |
| 0                                                    | 0        | 573     | 573     |
| Borough fixed parking costs                          | 0        | 0       | 1,961   |
| TfL fixed parking costs                              | 0        | 0       | 250     |
| GLA fixed parking costs                              | 0        | 0       | 493     |
| POPLA fixed costs                                    | 0        | 0       | 283     |
| Borough other parking services                       | 0        | 0       | 793     |
| Northampton County Court Recharges                   | 0        | 0       | 4,000   |
| Sub-total                                            | 0        | 0       | 11,920  |
| Sub-Total                                            | 0        | 9,600   | 373,081 |
| Core borough subscriptions                           |          |         |         |
| Joint Committee                                      |          |         |         |
| 5,541                                                | 0        | 46      | 5,587   |
| Grants Administration                                |          |         |         |
| 0                                                    | 400      | 0       | 400     |
| TEC (inc TfL)                                        |          |         |         |
| 0                                                    | 0        | 51      | 51      |
| LFEPA/MPA subscription                               |          |         |         |
| 33                                                   | 0        | 0       | 33      |
| Sub-total                                            | 5,574    | 400     | 97      |
| Other Borough charges                                |          |         |         |
| Borough contributions towards LCP functions          |          |         |         |
| 210                                                  | 0        | 0       | 210     |
| Borough contributions towards YPES functions         |          |         |         |
| 66                                                   | 0        | 0       | 66      |
| Sub-total                                            | 276      | 0       | 0       |
| Other Income                                         |          |         |         |
| DFE grant towards YPES direct costs                  |          |         |         |
| 461                                                  | 0        | 0       | 461     |
| Investments                                          |          |         |         |
| 75                                                   | 0        | 0       | 75      |
| Room bookings and conferences                        |          |         |         |
| 140                                                  | 0        | 0       | 140     |
| Deskspace charge to funded groups                    |          |         |         |
| 154                                                  | 0        | 0       | 154     |
| Sales of publications                                |          |         |         |
| 18                                                   | 0        | 2       | 20      |
| Employment services trading account income           |          |         |         |
| 38                                                   | 0        | 0       | 38      |
| TfL secretariat recharge                             |          |         |         |
| 0                                                    | 0        | 31      | 31      |
| Sales of Health Emergency badges                     |          |         |         |
| 0                                                    | 0        | 30      | 30      |
| Miscellaneous income                                 |          |         |         |
| 8                                                    | 0        | 0       | 8       |
| Sub-total                                            | 894      | 0       | 63      |
| Transfer from Reserves                               |          |         |         |
| 677                                                  | 800      | 425     | 1,902   |
| Central Recharges                                    | 868      | 0       | 0       |
| Total Income Base Budget                             | 8,289    | 10,800  | 373,666 |

## Leaders' Committee

# Item No:   9 London Councils Business Plan: Portfolio Holder Progress Reports

Report by: 
Christiane Jenkins Job title: 
Director of Corporate Governance Date: 
10 December 2013 
Christiane Jenkins Contact Officer: Telephone: 
020 7934 9540 
Email: 
christiane.jenkins@londoncouncils.gov.uk 

 Summary 
 The London Councils Executive agreed that there would be a programme of regular reporting on linked projects and services to Leaders' Committee. The reports would focus on outcomes achieved, reflecting back on the priorities agreed in the Business Plan. Portfolio holders would introduce these reports at Leaders' Committee. A progress report is attached for Transport & Environment ; 
Grants which is also due to be reported on this agenda, is covered in Item 3. 

 
Recommendations 
To note this report after raising any issues/points of clarification/interest with the relevant portfolio holder.  

## Part 1 Portfolio Holder Progress Reports Review Of 2013/14 Progress Against The Business Plan

- Waste management presents boroughs with an annual bill of £490m, added to the 
£220m bill for street cleansing, the total cost is £710m. It is the biggest area of 
borough expenditure after social care and education. If we are to meet the 
challenges that will no doubt be presented in the Comprehensive Spending Review 
2015, waste needs to be managed better across London.  

## Delivering Waste Efficiencies In London Background Outcomes Achieved

London Councils has: 
- Undertaken an analysis of current arrangements and key issues related to waste 
management in London and their associated costs.  This was used to initiate a first 
discussion on the key issues surrounding waste management in London at Leaders' 
Executive on 26 November; 
- Responded to consultations: the Waste Prevention Programme for England, the 
Waste Management Plan for England and the LGA's Local Waste Review; 
- Updated the best practice guide on two provisions of the London Local Authority Act 
2007 on waste receptacles and littering from vehicles. 
London Councils will: 
- Finalise the analysis on waste configurations in London focusing on performance, 
organisational choices and costs and comparing it to other parts of the UK and other countries (Dec13 to Jan14); 
- Undertake interviews with trusted experts to better understand the underlying causes 
of good or poor performance and test new creative policy ideas for improving performance (Jan- Mar14); 
- Develop options for improving waste management at local, sub-regional and pan-
London level (Mar- Jun14). 
 
Moving Forward 
- Energy price increases, income reduction and colder weather mean fuel poverty is 
becoming a reality for more people. Recent announcements by the "Big Six" energy companies about their intention to significantly increase energy prices mean that 
London's residents are facing additional pressure on the cost of living. This, 
alongside other major contributing factors such as poorly insulated homes, will push more people into fuel poverty, and is likely to increase ill health and deaths resulting 
from cold homes. 

## Better Energy Deal For Londoners Background Outcomes Achieved

London Councils has: 
- Provided support and acted as advisor for the boroughs participating in the Big 
London Energy Switch (BLES), being led by RB Kingston-upon-Thames. The spring 
auction secured 26,433 registrations with a high proportion being the target group of vulnerable residents. It also came in under budget enabling a second auction in the 
autumn; 
- Worked with the Energy Saving Trust (EST) to deliver a first evaluation report of the 
spring auction, which published in October amongst a great deal of political and media interest, has been well received; 
- Responded to consultations: "Allowable Solutions" (carbon offsetting for new homes) 
and the environmental aspects of the Housing Standards Review.   
London Councils will: 
- Work with EST to deliver the second evaluation of BLES (Nov 13 - Mar-14); 
- Ensure boroughs are adequately informed and supported to secure a fair share of 
funding from the Energy Company Obligation (ECO). Moving Forward 
- To decrease carbon emissions and increase the health and wellbeing of Londoners 
we need an increase in the shift away from the private car use. 
London Councils has: 
- Commissioned a resident's poll on walking and cycling in London. Follow up work 
included publication of a short report and a successful Members' event with the 
Mayor's Cycling Commissioner as keynote speaker;  

## Increased Modal Shift For A Better Transport System In London Background Outcomes Achieved

- Made a substantive submission and gave oral evidence to the London Assembly 
Transport Committee's report on bus services in London. Their report was greatly 
influenced by our A-Z of recommendations and TfL buses have responded 
positively; 
- Made a submission to the consultation on London's Road Safety Action Plan, 
resulting in London Councils being invited to sit on the high-level London Road 
Safety Steering Group, chaired by the Deputy Mayor for Transport; 
- Developed a proposal for a joint working initiative between TfL and boroughs, to 
help ensure London has sufficient skilled resources to deliver current and future transport programmes. This work is now being led by Services Directorate. 
London Councils will: 
- Continue to lobby against cuts to borough funding on transport such as LIP funding;  
- Continue to work with TfL to improve the TfL/Borough relationship and ensure 
boroughs' voice is heard on Crossrail, buses, roads, cycling and walking and other activity; 
- Undertake research on the rail franchises serving London to inform negotiations for 
improvement with Network Rail, TfL and the Department for Transport. Moving Forward 

## Leaders' Committee Summaries Of Minutes Item No:   10

Report by: 
Derek Gadd Job title: 
Head of Governance Date: 
10 December 2013 
Derek Gadd Contact Officer: Telephone: 
020 7934 9505 
Email: 
Derek.gadd@londoncouncils.gov.uk 

 
 
Summary 
Summaries of the minutes of London Councils Capital Ambition Board, Transport & Environment Committee,  and Transport and Environment 
Executive  
Recommendations 
Leader's Committee is recommended to note the attached summaries: 
- 
Capital Ambition - 7 October 
- 
Transport & Environment Committee - 24 October 
- 
Transport & Environment Executive Sub Committee - 14 November 
- In addition to the three projects in the Business Plan, London Councils is playing a 
leading role in the development of solutions to increase and better manage infrastructure - Crossrail and Crossrail 2; High Speed 2; Aviation; Thames Tideway Tunnel; Thames Estuary 2100 Plan (flood resilience) and energy supply and 
distribution including local energy networks. 
London Councils has: 
- Submitted a response to the Davies Commission setting out the parameters that 
London expects for evaluation of options for expansion of aviation capacity; 

## Transport And Environment Infrastructure Background Outcomes Achieved

- Submitted a substantive response to the consultation on Crossrail 2; 
- Raised the profile of flood risk management with TEC Members and Leaders; - Raised the issue of capacity within the London energy grid through amendments 
proposed by Lord Jenkin during the progression of the Energy Bill. 
London Councils will: 
- Ensure transport and environment infrastructure projects support population and 
economic growth - housing developments, business developments, providing 
employment and enhancing skills.   
 

## Moving Forward Portfolio Holder Cllr Catherine West - London Councils Executive Member For Transport And Environment London Councils Officer Lead Nishma Malde - Head Of Transport And Environment Nishma.Malde@Londoncouncils.Gov.Uk / 020 7934 9945

# Leaders' Committee Item No: Report From The Capital Ambition Board Meeting Held On 7 October 2013

Report by: 
Ana Gradiska Job title: 
Principal Governance and Projects Officer Date: 
10 December 2013 
Contact Officer: 
Ana Gradiska    
Telephone: 
020 7934 9781 
Email: 
Ana.gradiska@londoncouncils.gov.uk 
 
 
Summary: 
Summary of the Capital Ambition Board meeting held on 7 October 2013. 

Recommendations: 
For information. 
 Attendance: Cllr Stephen Alambritis (LB Merton, Deputy Chair  - chairing), Cllr Michael White (LB Havering), Cllr Keith Prince (LB Hillingdon), Martin Smith (LB Ealing), Rita Dexter OBE (LFEPA), Jane West (LB Hammersmith and Fulham) and London Councils officers. 

 
 
1. Declarations of interest 
 
1.1 
There were no declarations of interest.  

 

## 2. Apologies

 
2.1 
Apologies were received from Edward Lord OBE JP (Chair), Cllr Ruth Cadbury 
and Rob Leak. 
 
3. Minutes of the meeting held on 20 June 2013 
 
3.1. 
The minutes were agreed as an accurate record of the meeting held on 20 June 
2013. 
 
4. Director's report 
 
4.1  
The Director, Services introduced the item and gave an overview of the financial 
position, work programme, news items, and forward meeting dates. 4.2  
He reported that currently, all but one active project were considered on track 
and having a 'GREEN' status. The only project considered "AMBER" and working 
towards its milestones is the Children's Care Funding Calculator (CA514). 

4.3  
Cllr Prince queried why projects CA014 (London Energy Project) and CA065 
(Transforming Highways) had seemingly unrealistic savings (£87m and £50m respectively).  He also queried why projects CA070 (London Public Service Network) and CA215 (London Procurement Portal) did not generate any savings. 
4.4  
Officers explained that the forecasts were provided by the lead boroughs for each project and that the savings were projected to March 2016 and as such 
were subject to a level of change. Officers suggested providing more information about each specific project by email. Officers also referred to the changes in the business environments of the latter two projects having an impact on the original 
business cases. 4.5  
Cllr White recalled the London Public Service Network had been affected by Government changes around GCSx network provisions. Members considered 
whether some of these projects should be moved to into the "enabling" section of the table. 
 
Action: London Councils' officers to provide Cllr Prince with an email explaining more 
about the savings forecast for the four projects and to consider  whether CA )&) 
and CA 215  might be better represented in the "enabling projects" section of the 
table 4.6  
Members agreed the 2014 programme of meeting dates: 
 

Thursday 30th January 10:30 - 12:30 

 Thursday 6th March 10:30 - 12:30 
 

Thursday 26th June 10:30 - 12:30 

 

Thursday 11th September 10:30 - 12:30 

 

Thursday 4th December 10:30 - 12:30 
 
Action Points 
 
Item Action 
By 
Progress 
CA 
Completed 
4 
- 
London Councils' officers to provide Cllr 
Prince with an email explaining more about the savings forecast for the four projects and to consider  whether CA )&) and CA 215  might be better represented in the "enabling projects" section of the table 

 
# Leaders' Committee Item No: Report From The Transport & Environment Committee - 24 October 2013

Report by: 
Alan Edwards Job title: 
Governance Manager Date: 
10 December 2013 

Contact Officer: 
Alan Edwards    
Telephone: 
020 7934 9911 
Email: 
Alan.e@londoncouncils.gov.uk 
 
 
Summary: 
Summary of the minutes of the London Councils' Transport & Environment 
Committee held on 24 October 2013. 
Recommendations: 
For information. 
 
1. 

Attendance: Cllr Dean Cohen (LB Barnet), Cllr Melvin Seymour (LB Bexley - Deputy), Cllr Jim Moher (LB Brent), Cllr Colin Smith (LB Bromley), Cllr Phil Jones (LB Camden), Cllr Mike Fisher (LB 
Croydon), Cllr Ed Rennie (LB Ealing - Deputy), Cllr Chris Bond (LB Enfield), Cllr Harpinder Singh (RB 
Greenwich), Cllr Colin Ellar (LB Hounslow), Cllr Catherine West (LB Islington - Chair), Cllr Tim Coleridge 
(RB Kensington and Chelsea), Cllr Simon James (RB Kingston-upon-Thames), Cllr Andrew Judge (LB 
Merton), Cllr Shoaib Patel (LB Redbridge), Cllr Chris Harrison (LB Richmond-upon-Thames), Cllr Barrie Hargrove (LB Southwark), Cllr Colin Hall (LB Sutton), Cllr Clyde Loakes (LB Waltham Forest), Cllr Russell King (LB Wandsworth) and Michele Dix (Transport for London). 

 
2.  
Apologies for Absence: Cllr Bert Collins (LB Barking & Dagenham), Cllr Gavin Bacon (LB 
Bexley), Cllr Bassam Mahfouz (LB Ealing), Cllr Victoria Brocklebank-Fowler (LB Hammersmith & 
Fulham), Cllr Susan Hall (LB Harrow), Cllr Nigel Haselden (LB Lambeth), Cllr Alan Smith (LB Lewisham), Cllr Ian Corbett (LB Newham), Cllr Ed Argar (City of Westminster) and Michael Welbank (City of London)  
 
3. 

Appointment of Labour Vice Chair 

## Councillor Feryal Demirci (Lb Hackney) Was Elected As Labour Vice Chair Of Tec For The 2013/14 Municipal Year. Councillor Chris Bond (Lb Enfield) Was Nominated To Fill The Labour Vacancy Left On The Tec Executive Sub Committee. 4. Chair'S Report

The Committee received a report that updated members on London Councils' work on transport and environment policy since the last TEC meeting on 13 June 2013. The Committee noted the Chair's report and the concern to the proposed 25% cut to borough LIP funding. 

5. 

Mayor's Roads Task Force The Committee received a report that set out recommendations for the next steps to take forward the findings of the Mayor's Roads Task Force (RTF) that were summarised in the TEC Executive paper tabled at the 18 July 2013 meeting, and drew on discussions and conclusions from the officers' seminar organised by London Councils on 25 September 2013.  
The Committee: **(i)** ensured that the street-style approach advocated by the RFT would be adopted and addressed in their borough, and **(ii)** agreed that London Councils would facilitate work by TfL and borough officers (primarily through LoTAG) to determine a coherent set of criteria to enable boroughs to decide where on the movement and place axis of the street-type framework each road sat. 

## 6. Delivering A Road Freight Legacy

The Committee considered a report on TfL's aim to deliver a road freight legacy. The paper outlined two key strands of work, namely (a) to increase the safety of HGVs around vulnerable road users, particularly cyclists, and (b) to work to consider the practicalities of increasing out of hours deliveries without causing noise disturbance to London residents. The Committee discussed the report and noted that members should take their issues/concerns back to their borough officers, and to respond to TfL directly. 

7.  
Nominations to Outside Bodies & Appointment of Advisers to the Committee for 2013/14 
The Committee received a report from TfL that updated members on the progress with the procurement of new contracts for the provision and maintenance of traffic control infrastructure. The Committee noted the report which was for information only. 8. 

Update on Freedom Pass Projects The Committee received a report that updated members on the following: (a) the mid-term review of continued eligibility for Freedom Pass, (b) the streamlining of the application process using 60+ data transferred from TfL, and (c) the charging for replacement passes. 

 
The Committee: **(i)** noted the progress on the mid-term review of continued eligibility for the Freedom Pass, **(ii)** approved the final stage to follow up the mid-term review of non-respondents, **(iii)** noted the streamlining of the application process using 60+ data transferred from TfL, and **(iv)** noted the review of charging for replacement passes. 9. 

Amendment to the Description of Parking Contravention Code 45 
The Committee considered a report that sought approval for amendments to the description of parking contravention code 45 (parked on a taxi rank) 
 
The Committee: **(i)** agreed the revised description for contravention code 45 from "parked on a taxi rank" to "stopped on a taxi rank", **(ii)** agreed to add a note to code 45 indicating that "stopped" could be amended to "waiting", where Orders regulating authorities' taxi ranks restricted waiting rather than stopping, and **(iii)** agreed to add the code specific suffix "w" to code 45 to allow IT systems to differentiate between a "no waiting" and a "no stopping" taxi rank.. 

 
10. 

Government Parking Reform Proposals The Committee considered a report that provided members with an update on the proposed Central Government parking reform proposals which included the stopping of CCTV parking enforcement. 

 
The Committee: **(i)** agreed that Spencer Palmer, the new Director of Transport and Mobility, would draft a letter to DCLG, on behalf of Cllrs West and Fisher, to express borough concerns regarding the banning of CCTV for on-street parking enforcement, and **(ii)** noted and commented on the effects the changes might have for their borough enforcement practices. 

11. 

Sharing Skilled Transport Staff - Proposed TfL and Borough Joint Working Initiative The Committee received a report that described a proposal for a joint working initiative between TfL and the boroughs, to help ensure that London had sufficient skilled resources to deliver current and future transport programmes. The Committee agreed that London Councils would lead the proposed development of an initiative to enable and encourage skilled staff to be shared between the boroughs and TfL. 

## 12. Flood Risk Management - An Update And Guide On How To Access Funding

The Committee received a report on an update of flood risk management and a guide on how authorities could access funding The Committee: **(i)** noted the progress and discussed what further measures could be taken to encourage uptake of funding by boroughs, **(ii)** agreed to advise Leaders of the upcoming flood levy vote at the Regional Flood and Coastal Committee (RFCC) on 20 November 2013, and **(iii)** agreed to seek guidance from Leaders' Committee on 12 November 2013 to inform and guide RFCC representative voting at the RFCC on 20 November 2013.  
 
13.  
RE:NEW Home Energy Efficiency - An Update and Guide on how to access Funding The Committee received a report that provided an update on RE:NEW, the home efficiency programme and a guide on how local authorities could access funding. The Committee noted the progress and discussed what further measures could be taken to promote this programme and encourage uptake of funding by the boroughs. 

14. 

London Waste and Recycling Board - An Update on Activities and Funding Opportunities The Committee received a report that provided members with an update on the London Waste and Recycling Board (LWARB) and its current activities, which offered opportunities for improving waste management services in London, including funding streams. 

The Committee noted LWARB's business plan and discussed further measures that could support the take-up of existing funding opportunities by boroughs. 

 
15. 

Big London Energy Switch The Committee considered a report that updated members on the progress with the Big London Energy Switch and its evaluation. 

 
The Committee: **(i)** agreed that promotional material, incorporating London Councils' logo, would be produced nearer the time of the auction date, **(ii)** noted the initial findings of the evaluation from the Energy Saving Trust, and **(iii)** noted the change of date for the autumn auction. 

 
16. 

Parking Adjudicators' Annual Report 

## The Committee Received And Noted The Joint Annual Report By The Parking Adjudicators For The Year 2012/13. 17. Re-Appointment Of Parking And Traffic Adjudicators The Committee Agreed To The Re-Appointment Of The Following Two Parking And Traffic Adjudicators, For A Period Of Five Years, From 11 December 2013: Monica Hillen And Neena Rach. 18. Minutes Of The Tec Executive Sub Committee Held On 11 September 2013 The Committee Noted The Minutes Of The Tec Executive Sub Committee Held On 11 September 2013. 19. Minutes Of The Tec Main Meeting Held On 13 June 2013

Subject to two minor amendments, the minutes of the TEC Main meeting held on 13 June 2013 were agreed. 

# Leaders' Committee Item No: Report From The Tec Executive Sub Committee - 14 November 2013

Report by: 
Alan Edwards Job title: 
Governance Manager Date: 
10 December 2013 
Contact Officer: 
Alan Edwards    
Telephone: 
020 7934 9911 
Email: 
Alan.e@londoncouncils.gov.uk 

 
 
Summary: 
Summary of the minutes of the London Councils' TEC Executive Sub 
Committee held on 14 November 2013 
Recommendations: 
For information. 

## 1. Attendance: Cllr Catherine West (Lb Islington - Chair), Cllr Jim Moher (Lb Brent), Cllr Peter Fortune (Lb Bromley - Deputy), Cllr Chris Bond (Lb Enfield), And Michael Welbank (City Of London) 2. Apologies For Absence Cllr Colin Smith (Lb Bromley), Cllr Tim Coleridge (Rb Kensington And Chelsea) And Cllr Colin Hall (Lb Sutton) 3. English National Concessionary Travel Scheme (Non-Tfl Bus Services)

The TEC Executive Sub Committee received a report that provided members with an update regarding the reimbursement of bus operators carrying concessionary passengers on local bus services not operated by Transport for London (TfL, and sought approval to the publication of the 2014-15 London Concessionary Bus Scheme proposal. 

The TEC Executive Sub Committee: **(i)** agreed to the publication of the London Concessionary Bus Scheme for 2014-15 on 1 December 2013, in accordance with legislation, **(ii)** noted that the Scheme would be submitted to all Operators for consultation. Responses would be analysed by London Councils and, if appropriate, members would be recommended to amend the Scheme accordingly, and (iii) 
agreed to the Scheme being implements on 1 April 2014. 

4. 

Taxicard Budget Update 2013/14 

## The Tec Executive Sub Committee Received An Noted A Report That Updated Members On The Projected Taxicard Budget Outturn For 2013/14. 5. Transport And Mobility Performance Data

The TEC Executive Sub Committee received a report that detailed the London Councils' Transport and Mobility Services performance information for Q2 2013/14. The TEC Executive noted the Transport and Mobility Services performance information for Q2 2013/`14, and the reason why the two measurements in "Red" were artificially high. 

## 6. Month 6 Revenue Forecast 2013/14

The TEC Executive Sub Committee considered a report that outlined actual income and expenditure against the approved budget to the end of September 2013 for TEC and provided a forecast of the outturn position for 2013/14. At the half-stage year, a surplus of £421,000 was forecast over the budget figure, compared to a surplus of £335,000 after the first quarter. In addition, total expenditure, in respect of Taxicard trips taken by scheme members was forecast to underspend by £47,000, if trip volumes in the first quarter continued for the remainder of the year. 

 
The TEC Executive Sub Committee: **(i)** noted the projected surplus of £421,000 for the year, and the forecast underspend of £47,000 for overall Taxicard trips, as detailed in the report, and **(ii)** noted the projected level of Committee reserves, as detailed in paragraphs 5-6 of the report, and the commentary on the financial position of the Committee included in paragraphs 7-10. 7. 

Draft Revenue Budget and Borough Charges 2014/15 
The TEC Executive Sub Committee received a report that outlined the revenue budget proposals and the proposed indicative borough subscription and charges for 2014/15. The Committee was asked to comment on these outline proposals in order that any comments could be considered in the further report for the Main TEC meeting on 12 December 2013, where the detailed budget proposals and levels of subscriptions and charges for 2014/15 would be presented for approval. The TEC Executive Sub Committee recommended that the Main TEC Committee approve at the meeting on 12 December 2013, the changes in individual levies and charges for 2014/15 as follows: **(a)** the Parking Core Administration Charge of £1,500 per borough and for TfL (2013/14 - £1,500; paragraph 
38), **(b)** he total Parking Enforcement Service Charge of £0.4519 which would be distributed to boroughs and TfL in accordance with PCNs issued in 2012/13 (2013/14 - £0.4519 per PCN; paragraphs 36-37), (c) 
the Concessionary Fares Administration Charge of £8,674 per borough (2013/14 - £8,674; paragraph 
16), **(d)** the Taxicard Administration Charge of £4.00 per permit (2013/14 - £4.00; paragraphs 17-19), (e) 
the Lorry Ban Administration Charge of £98,612 in total, net of estimated PCN income, to be apportionment by population figures, with TfL paying the average borough charge of £3,287 (2013/14 - 
£103,172; TfL charge £3,439; paragraphs 20-21), **(f)** Congestion Charging Appeals - to be recovered on a full cost recovery basis, subject to the continuing agreement of the GLA under the contract arrangements that run until November 2014, an extension of which was currently under discussion 
(paragraph 29), **(g)** the Parking and Traffic Appeals Charge of £38.54 per appeal or £36.92 per appeal where electronic evidence was provided by the enforcing authority (2013/14 - £41.38/£39.81 per appeal; 
paragraph 30), **(h)** the TRACE (Electronic) Charge of £10.40 per transaction (2013/14 - £10.40; 
paragraphs 33-35), **(i)** the TRACE (Fax) Charge of £12.83 per transaction (2013/14 -   £12.83; 
paragraphs 33-35),  **(j)** the TEC, PED and PIE Charges of £0.20 per transaction (2013/14 - £0.20; 
paragraphs 33-35), **(k)** the provisional gross revenue expenditure of £374.948 million for 2014/15, as detailed in Appendix A. 

On the basis of the agreement of the above proposed charges, the provisional gross revenue income budget of £374.693 million for 2014/15, with £255,000 recommended for transfer from uncommitted reserves to produce a balanced budget, as shown in Appendix B. An additional sum of £5,000 be repatriated to each boroughs (and TfL) from TEC uncommitted reserves, amounting to £170,000 in total, in the form of a one-off payment, as per paragraph 54.The indicative charges to individual boroughs set out in Appendix C. The Executive-Sub Committee were also asked to note the current position on reserves, as set out in paragraphs 51-55 and Table 9 of this report. 

## 8. Minutes Of The Tec Main Meeting Held On 24 October 2013 The Minutes Of The Tec Meeting Held On 24 October 2013 Were Noted. 9. Minutes Of The Tec Executive Sub Committee Held On 11 September 2013

The minutes of the TEC Executive Sub Committee held on 11 September 2013 were agreed as an accurate record. 10. 
Any Other Business - Michael Welbank (City) sent his apologies for the TEC Main in December.