Cash-strapped Peterborough council defends £2m spend on consultants to tackle deficit

Cash-strapped Peterborough City Council has defended its decision to spend £2 million on consultants to help it tackle a huge budget deficit.

Monday, 3rd February 2020, 5:38 am

Despite raising council tax by four per cent, making 75 redundancies and cutting support for some of the most vulnerable in Peterborough the Conservative-run council has sanctioned spending just over £2 million with Grant Thornton.

The authority, which has been hit by huge cuts to its government funding, claimed the firm’s expertise has enabled it to “identify and start to deliver over £18 million of savings in a very short timescale” as it tackles an “unprecedented” financial challenge.

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Cllr David Seaton with a previous budget

But the expenditure has been criticised by the leader of the council’s Labour group Cllr Shaz Nawaz who said he had questioned with officers why the total spend on consultants is increasing from £2.7 million in 2018/19 to an estimated £3.7 million in the current financial year.

The member for Park ward said he did not believe the expenditure was “good use of taxpayers’ money,” adding: “We need to analyse why we have had to commission Grant Thornton. The simple and accurate answer is that it’s due to severe cuts from the Conservative government coupled with the local Conservative administration’s inability to make appropriate changes in prior years.

“They left everything to the last minute; too little, too late. This has led to a knee-jerk reaction to appoint Grant Thornton which has cost the taxpayer a seven figure sum. That money could have been used to address homelessness or social housing. Another example of the fine mess caused by the Conservatives both nationally and locally.”

The council is having to make savings of £33 million for its 2020/21 budget, with £24 million of that agreed back in January.

This included a four per cent rise in council tax (with two per cent ringfenced for adult social care), more than 75 redundancies (with a similar number of staff contracted to work with the authority also expected to lose their jobs) and large cuts in funding to services which support the elderly, frail, poor and young.

Council cabinet member for finance Cllr David Seaton said: “The financial situation that the council faces is unprecedented and the budget setting process for 2020/21 continues to be the hardest that the council has faced.

“In each year of the past decade the council has delivered multi-million pound savings as a result of our government grant reducing from £55 million to £10 million and demand for services increasing significantly.

“There was always going to be a crunch year where delivering those savings would become much harder because of how lean the organisation has become - 20/21 is that year.

“We have many skilled professionals working for us at every level of the organisation who provide a range of excellent services for our residents on a daily basis, including care for the vulnerable and elderly, looking after children in need and waste collection. We have maintained strong financial management for many years as attested to by our external auditors.

“However, the huge financial challenge that we face has meant that we have needed to bring in expertise that we do not have in the council in the short term to help us deliver £33 million of savings for the next financial year and beyond so that our budget is balanced.

“It would not be a good use of taxpayers’ money to employ staff with such expertise full time when they are only needed on a short term basis.”

What the council has received for its money

Cllr Seaton said Grant Thornton had access to “analytical tools” which the council does not, which it used to share information on other local authorities.

“This gave the council access to information that led us to identify areas where spend was higher than similar councils with similar challenges and comparable performance. Through this process we were able to identify new areas of opportunity for savings,” he added

One example was a £500,000 saving from the council’s transport contracts.

Cllr Seaton also highlighted “expertise” in areas such as HR, finance and commercial contract negotiation, with consultants identifying savings before providing individuals with “direct experience of driving out savings in these areas”.

Examples of support include reducing contract spend by more than £5 million from April 2020/21 and quickly reducing expenditure in “technical HR and financial process and controls”.

The finance chief added: “Grant Thornton has enabled the council to identify and start to deliver over £18 million of savings in a very short timescale.”