Saturday, 15 December 2012

The 3 mile Economy Drive

Newcastle City Council say they have to find 90 million pounds worth of savings because of increased costs and cuts of 39.3 million to their grant. They are proposing to close 10 of their 18 libraries to help achieve these savings. Staffing costs tend to one of the biggest areas of spending in libraries and looking at their CIPFA returns since 2008 staffing has already dropped by about 20%

Which to me shows that the staffing in the library service has already had more that its fair share of the cuts. Having further cuts to staff numbers is clearly why they have to close libraries. In the CIPFA returns there are always two areas of expenditure that I always find really murky. There are called Service Support Costs and Other Expenditure.

According to the forms service support costs are defined as:

"Include an apportionment for administrative buildings, central departments, central support services, central expenses and departmental administration even if the authority does not make such an allocation to the public library account. Also include any executive costs of the department (of which libraries form a part) which are fairly attributable to libraries. Exclude any costs included in Cell 95. No attempt should be made to separately identify the staff element of central administrative charges, nor should such costs be included in Cell 77 / 114. Include recharges that arise as a result of either Internal Service Level Agreements (SLAs) or the authority externally contracting out central professional services."

And Other Expenditure, which is defined as:

"Other Expenditure (Estimates only - this should include Computing Costs, Other Supplies and Services, Transport, Third Party Payments and Support Services Costs)"

The other expenditure includes the service support costs and various other costs involved in running the library service. The service support costs specifically are the cost to the council, outside of the actual library budget that it costs to run. So HR, Payroll, accounts, share of the building costs for the non-library buildings etc.

Frustratingly different councils fill in what appear to be slightly different versions of the CIPFA forms (councils hate direct comparison) but on the 2012 return Newcastle City Council has a figure of £4.1 million for their other expenditure costs:

And a very short hop over the tyne, Gateshead Borough Council has service support costs of £1.2 million

 Both of these councils are cutting or closing libraries, both maintain a separate and expensive (in proportion to their library budgets) back office support cost. The Newcastle total budget for example is around 9 million pounds yet the council need to spend 4.1 million on service support and other expenditure. In Gateshead the library budget is about 4.1 million and their service support costs  (not the total other expenditure) are 1.2 million.

Obviously we cannot make a direct comparison as they haven't used the same figure but there is clearly lots of scope there for not only efficiencies but with two councils very close together they should not be duplicating this work, their main council offices are three miles apart. To be cutting libraries and not pooling these costs is wrong and Gateshead and Newcastle Council should not cut a single library until this duplication and inefficiency is driven out of their budgets. They should follow a similar scheme to the tri-borough proposals in London, they joined up the running and costs of three library authorities and saved lots of money and not closed any libraries. This level of waste would never be tolerated in the private sector. Its time for the councillors in Newcastle and Gateshead to start showing some leadership and stop blaming the other side, if Labour were in Government we would be in exactly in the same position as we are in now.

The Cipfa returns:

Info on the tri-borough back office sharing scheme in London:

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