As counties across the country grapple with tougher, tighter budgets, Surrey CC’s has had its fair share of financial woes. Heather Jameson talks to Joanna Killian and her crack new top team about the rescue plan
While Northamptonshire CC may have hogged the headlines lately, for all the wrong reasons, it’s not the only council to face some tough financial choices. Counties in particular are coming to terms with the stark reality of extreme cuts.
A recent report by the County Councils’ Network predicted counties would have to cut a billion pounds in the next financial year unless they are given a significant cash injection, and several authorities have now outlined budgets offering little more than basic services.
Surrey CC is no stranger to the fiscal challenges. Chief executive Joanna Killian took up her post six months ago and immediately delved into the budgets. A report she commissioned by the Chartered Institute of Public Finance and Accountancy (CIPFA) to review its financial position claimed the council was facing a cash shortfall of £94m by March 2021 – and there was no ‘plan B’.
‘The reality is that money is at the heart of everything,’ the new chief says. ‘You can’t run fantastic services without being sure about the money.
‘I wanted to make sure I had the capacity to be able to deliver huge, huge change. In the time before I started and in my first few weeks I wasn’t sure there was the depth and the grip that I would have expected.’
The finance function, she says, was fine in the past but just not strong enough for £94m challenge – a claim backed up by the independent CIPFA review. ‘I wasn’t quite comfortable with the language of “no plan B”, there was a plan but we are developing a much stronger plan with robust business cases.’
The ‘we’ in question is the new, highly experienced team that Ms Killian has assembled, mostly brought in from outside, to turn the county around.
Former LGA executive director and Crawley Council chief executive, Michael Coughlin has been brought in as director for customer, digital and transformation, while former Haringey LBC director of resources, Tracie Evans is responsible for economy, growth and commercial services.
Just two of the senior leadership team have a history at the council. Helen Atkinson, the director of health, wellbeing and social care was part of the previous top team under chief executive David McNulty, while director of highways, transport and environment, Jason Russell is newly promoted.
Bexley LBC’s Leigh Whitehouse has been in post for four weeks as the director of finance, replacing Sheila Little who left in July. They are all here to talk to The MJ about what went wrong and how they are going to fix it.
Only Dave Hill, the council’s director for children, families and learning, is missing. Mr Hill – who worked with Ms Killian at Essex CC – is a past president of the Association of Directors of Children’s Services and one of the most respected directors in his field.
‘We are under no illusion that, over the next three to five years, we have a massive transformation job ahead of us, but I am feeling confident that we can do it,’ Ms Killian explains.
How the county got itself to this place is complex – but they say the issues were not the same as Northamptonshire, where the county was in denial and just waited to be bailed out. The top team frequently refers to the council’s £540m savings over the past 10 years, clearly keen to defend the notion their predecessors didn’t make cuts.
Ms Killian also denies Surrey ever expected a political ‘bung’ and they are all adamant there was never any ‘sweetheart deal’ – the alleged sweetener handed to the county after leader David Hodge dropped his plans for a referendum on a 15% council tax increase.
But members ‘have genuinely felt they lost out on funding’ she says. ‘And I think there are some really significant funding pots where we haven’t had our fair share.’
Despite the lack of funding and the talk of council tax hikes, the team claims they have never considered a Section 114 notice. ‘I think it would be a disastrous failure. We would all have failed,’ Ms Killian says. ‘It is a sign of weakness. In too many authorities the language of S114 is waved around and I think it becomes a peril.’
Mr Whitehouse – the man with the power to issue a s114 – agrees: ‘It’s [s114] also an admission there is no plan. There is a plan in place. It’s for when people are failing to recognise the severity of the situation. That’s not the case here.’
He suggests the plan was ‘losing pace’ with the scale of the cuts and had started to slip. While the funding gaps had been plugged with one-off measures, the council now needs to find a longer term solution.
What the new team has found is a lack of data and evidence and an issue with the culture of the organisation. Mr Coughlin says: ‘We have learned that Surrey hasn’t been good at looking outside itself for examples of best practice to apply internally.
‘There have been a number of initiatives, but they have all either been sub optimal or they haven’t stuck. Things have been layered on top of each other, but actually the fundamentals of the councils haven’t really changed in terms of the culture and behaviours.’
Ms Evans agrees and adds: ‘There is a whole other layer about grip, a grip around simple management functionality. That two pronged approach about getting others in from outside and gripping everything that we are doing.’
The chief executive explains: ‘I think both the leadership team and some politicians just ran out of energy and hopefulness that there was anything else to do. I don’t think it was a lobby-only strategy.
‘Sometimes you need a refreshed management team to come in and help understand what opportunities there are for the future. My role over the last six months has been to retain the talent and bring in other people with capabilities.’
For those who were in place before it is a tough message. Mr Russell says: ‘At first it is difficult to come to terms with – I had a sense of guilt. I’ve moved on from that now and I’m quite excited to be part of the new leadership team.’
Ms Atkinson also pre-dates the new regime. She tells The MJ: ‘Nobody came in on a daily basis to do a bad job. What is different is that as a corporate leadership team, we are working more as a team. It feels very much like we have corporate responsibility. It is shifting.’
Cllr Hodge, Surrey’s leader, is also still in post. Is his position tenable, or is he culpable for some of the failures of the past? Ms Killian is the epitome of diplomacy, suggesting he has been driven in his support a change. ‘I think some colleagues historically have not provided the quality of advice and evidence and data to be able to enable him and other politicians to make good decision. You might say that’s a cop out but I think it is genuinely the case.’
Aside from the finances, Surrey still has a major issue with its children’s services which has been failing for the last decade. It is a problem that the last chief executive, who came from a children’s services background, failed to resolve. Ms Killian says: ‘I don’t know why it wasn’t sorted, but I know now that it will be sorted.’
There has been a children’s commissioner in place, appointed three months ago by the Department for Education, who is due to report shortly. Ms Killian describes her new children’s services director as ‘fabulous’.
‘I think he is one of the best DCS’s in the country and I know he has the tenacity and resilience to turn it around. But we have been clear with members that this is not an overnight job. It’s going to require a huge change in leadership arrangements, culture and thinking differently about how we work with our partners.’
For children’s services, as with the other parts of the council, Ms Killian suggests that one of the mistakes the council made was that it didn’t appoint ‘brilliant people’. It is an error she is determined not to replicate.
Mr Coughlin, who is a Surrey resident himself, says: ‘It would be easy to characterise what we are doing as solving a financial problem.’ He says the new team is more ‘ambitious and aspirational’ than that.
‘It’s not just about putting the financial position right. We will make sure that happens. Actually my ambition is, within three to five years Surrey is one of the top performing councils in the country.’
Surrey CC is advertising for several senior posts – see The MJ Jobs.