The Scrutiny & Overview Committee reviewed the draft Stabilisation Plan and the Future Croydon Transformation Programme Update, raising concerns about the Council's capacity to deliver accelerated actions and the potential impact on services. The Committee also approved recommendations from its sub-committees for submission to the Executive Mayor.

The Stabilisation Plan and Transformation Programme Update

The Committee extensively discussed the draft Stabilisation Plan, a crucial component of the Council's strategy to address its significant financial challenges. This plan, which is a condition of the Government's Exceptional Financial Support (EFS) for 2025-26, aims to accelerate actions to manage demand, reduce costs, and increase income, with a target of £27.3 million in additional savings and efficiencies. The plan is a subset of the broader Future Croydon Transformation Programme, designed to deliver financial sustainability and modernise services.

Executive Mayor Jason Perry and Councillor Jason Cummings, Cabinet Member for Finance, introduced the item, highlighting the Council's progress since 2022, including the delivery of 95% of the Improvement and Assurance Panel's (IAP) Exit Strategy. They emphasised that while the Stabilisation Plan accelerates existing initiatives, it does not resolve the Council's underlying financial issues, which require ongoing engagement with the Government regarding legacy debt. The current budget gap to be met by EFS stands at £109 million, with forecasts indicating this gap will grow over the next four years.

A key concern raised by the Committee was the Council's capacity to deliver the accelerated actions within the ambitious timeframe, particularly given existing resourcing challenges. While the Stabilisation Plan focuses on improving efficiency and managing demand rather than cutting services, the Committee noted a serious risk to the delivery of both the Stabilisation Plan and the wider Transformation Programme due to the accelerated pace. The Council acknowledged this increased risk, deeming it acceptable given the imperative to deliver savings.

The Committee questioned the reliability of the figures within the Stabilisation Plan, particularly how they had been tested. It was explained that figures were derived from removing contingencies, such as inflation allowances, and that strategic partners like Boston Consulting Group (BCG) had been involved in estimating potential savings. The Committee requested more detailed scrutiny of individual saving assumptions by relevant sub-committees to ensure their deliverability.

Concerns were also raised about the significant portion of savings (£17 million out of £27 million) coming from contingency funds. The Cabinet Member clarified that the plan identified all feasible actions to maintain a functioning Council. The Committee welcomed the commissioning of a discretionary spend review by the Chartered Institute of Public Finance and Accountancy (CIPFA) and requested to be kept informed of its outcomes.

Regarding the capital programme, a £2 million reduction for 2025-26 was discussed. The Council stated that remaining projects were critical, externally funded, or unlocked additional funding. A briefing on the capital programme and asset disposals was agreed.

The Committee sought reassurance on the Council's capacity to deliver the accelerated actions and maintain quality control. The Transformation Management Office (TMO) was highlighted as central to managing this, with a resourcing plan identifying skills gaps and factoring in the cost of additional expertise. The Council's workforce comprises 82% permanent staff, 14% agency staff, and 3.3% vacancies. Specific breakdowns for Adults, Children's, and Housing services were provided, with the Housing service noted as having a higher reliance on agency staff due to ongoing restructures. The Council is shifting towards direct sourcing for recruitment.

The governance structure for the Transformation Programme, with its six layers, was questioned for potential streamlining. While acknowledging the need for robust governance in large-scale transformation, the Committee expressed concern about the additional demands on officer time.

Engagement with partners in developing the Stabilisation Plan was discussed, with reference to resident surveys and feedback from various stakeholders. The Council's risk management approach was described as sophisticated, with a critical friend approach and support from its insurance provider, Zurich. However, a formal measure of the Council's risk maturity was not available, and the Committee suggested training staff in risk management.

The Committee noted that market pressures and the external environment, such as NHS restructuring and police savings targets, could increase demand on Council services. Change fatigue among the workforce was also identified as a significant risk. The staff turnover rate had decreased, and exit survey results were positive, but the ongoing reliance on agency staff, particularly in the Housing service, remained a concern.

The Committee concluded that while the Stabilisation Plan demonstrated appropriate ambition and risk-taking, there were significant concerns about the Council's capacity to deliver the accelerated actions at the required pace, posing a risk to the wider Transformation Programme. They welcomed the move towards outcome-based budgeting and direct sourcing for recruitment.

Following the discussion, the Committee agreed to several actions, including requesting an update on the Exit Strategy, arranging a briefing on asset disposals, sharing information on lobbying the Government regarding the Spending Review, and reviewing the outcomes of the discretionary spend and outcome-based budgeting exercises.

The Committee also submitted three recommendations to the Cabinet:

1. Exploring options for upskilling the workforce in risk management.
2. Undertaking a comprehensive assessment to identify vulnerable groups at risk of digital exclusion.
3. Reviewing the governance structure for the Future Croydon Transformation Programme to enhance decision-making efficiency and minimise duplication.

Scrutiny Recommendations

The Committee considered and approved recommendations made by its Sub-Committees for submission to the Executive Mayor for his consideration. These included recommendations from the Children & Young People Sub-Committee regarding a more equitable funding model for the Croydon Safeguarding Children Partnership, and from the Streets & Environment Sub-Committee regarding the development of robust metrics to compare the performance of Planning and Planning Enforcement services against similar local authorities.