The Chair welcomed Councillor John Peck in accordance with the provisions of Part 4 of the Council’s Constitution and also Councillor Alibor Choudhury, Cabinet Member for Resources to respond to the call-in.

In his presentation to the Committee, Councillor Peck assisted by Councillor John Pierce outlined the reasons for the call-in and the concerns. Councillor Peck explained his concerns related to the process, the impact on organisations doing critical work in the borough, the nature of the new organisations receiving funding and the geographical balance of organisations recommended to receive funding. 

In terms of process, there no evidence that an Equalities Impact Assessment had been undertaken, which risked the Council being exposed to judicial review. He was concerned that the officer recommendations had been significantly changed by the Executive, and that this part of the process was not transparent. He also expressed concern that the process was still being progressed, rather than being paused, as should happen when a decision is subject to a Call-in. This breached the Council’s Constitution.

There had also been complaints from organisations about long delays and that the process kept changing.

A key concern was the significant cuts in funding to social welfare advice agencies. In some cases, organisations may have to close down as they would no longer be viable. The Council should be supporting such groups in this current economic climate and in light of the welfare benefits cuts. Cutting these services at a time when they are most needed would impact upon some of the most vulnerable people in the borough.

Councillor Peck also raised concerns about the organisations receiving funding for the first time, or significant increases in funding. He suspected they had strong links to the Mayor and his political network. Finally, he argued that the geographical spread of funding across the borough was not balanced, or linked to the level of deprivation in the borough and was therefore unfair. The areas in the south and east of the Borough would suffer the most from the welfare cuts as they were the most impoverished as showed at the recent seminar.  How does the proposals relate to this need?

The process had raised serious questions in the community regarding why some very experienced groups were loosing major funding and new ones were having major increases in grant. 

Councillor Peck requested that the officers original recommendations, made to the Corporate Grants Programme Board  (CGPB) be published; that the Equalities Impact Assessment be published; That all decisions be reviewed to looked at equity and geography; and that the money in the social welfare advice services budget be allocated to advice groups with a good track record in this area.

Councillor Alibor Choudhury responded to these points. He stressed that no decisions have yet been made and the Mayor and Cabinet wanted to consult the Overview and Scrutiny Committee as part of the ongoing process. He underlined that the Executive fully supported the voluntary sector; that the Council had received 100 more applications than previously. He highlighted the savings imposed on the Council by the government with the possibility of more needing to be found in the future. He noted the clear criteria agreed by the Council in March 2012. He explained the consultation, application and assessment process.

The aim of the Corporate Grants Board was to ensure the recommendations made by officers were robust. In moderating the recommendations the Board took into account any gaps in provision, the organisations capacity to secure alternative funding, their potential to develop and knowledge of the community and local area, and relevance to Mayoral priorities. A key aim was to encourage new groups and small groups at the heart of the community to develop. The decisions would be subject to robust monitoring arrangements. 

It was difficult to carry out an Equalities Impact Assessment at this stage as the process had not been completed. The Board had fully looked at the geographical balance of the proposals. The final decisions should be made shortly.

In response, the Committee raised the following questions and concerns:

·        Concern that many valuable organisations had lost funding yet there was no justification for this. 

·        The Committee queried the capacity of the new organisations to deliver the aims and outcomes expected. There were also concerns about small organisations capacity to upscale quickly, given their significant increases in funding. How could this be assessed given they had no track record? What assurances were there to ensure this? Cllr Choudhury said there would be robust performance monitoring arrangements put in place by the Council, but that new organisations needed to be given a chance.

·        It was stated that for some groups receiving a reduction in funding, their reserve budgets had been taken into account. Was this a factor considered for all groups? Cllr Choudhury said he couldn’t comment on individual organisations.

·        The cuts of up to 40% in MSG funding to Early Years services overall was raised, as was older peoples day services, sports and activities, and refugee assistance, which had also seen cuts of up to 70%. Cllr Choudhury did not respond.

·        The Committee requested a geographical breakdown of the proposals be provided. Cllr Choudhury reiterated that no final decisions had been made yet.

·        It was questioned whether the location of the organisation or its visitors was taken into account when assessing geographical coverage.

·        The Committee raised concerns about the changes made to the original officer recommendations and that this was not transparent. They requested that these officer recommendations were published in the interest of transparency. Cllr Choudhury responded that changes were made to reflect Mayoral priorities and address gaps in provision.The Committee disagreed, as neither the MSG Programme or other recent reports had shown how they had met Mayoral priorities.

·        The Committee were very concerned that an Equalities Analysis of the proposals was not available and requested that this be published as soon as possible. Again Cllr Choudhury stressed that no decisions had yet been made.

·         The Committee were also extremely concerned about cuts to welfare advice services.

·         The Committee questioned the plans for the unallocated budget. Again Cllr Choudhury stressed that the review had not been completed. One option was to use it to help address the needs from the welfare reforms that had not fully bedded in. If reviewed it was unlikely that any of the proposed awards would decrease. He considered that the Mayors priorities ran through the proposals.

·         In relation to the Call in, Mr Galpin considered that whilst no final decision had been made, proposals had been put forward.  Therefore it was reasonable for the Committee to review the plans at this stage 

The Committee considered the views and comments made by Councillor Joshua Peck in presenting the call-in, and the information given by Councillor Alibor Choudhury.

The Committee unanimously agreed that Cabinet’s provisional decision be referred back to Cabinet for further discussion and urgently revised to ensure fairness.

They proposed that the following alternative actions are taken, and concerns considered:

That the proposals be fully reviewed, taking into account:

o       an equalities analysis

o       the geographical spread of funding

o       the potential impact of welfare reform on vulnerable residents and the importance of advice services, as well as the impact of withdrawing funding withdrawal from third sector organisations that are supporting the boroughs residents.

o       The capacity of all organisations commissioned to deliver a quality service and stated outcomes.

·        The proposed levels of funding could have significant impacts on the council’s service delivery and the Committee would like to see more information on what services will no longer be delivered as a result of the proposals.

·        There were significant concerns raised about the process and its transparency to residents and organisations involved.

·        There was particular concern that key information had not been made available to the Committee. The Committee requeststhat in the interest of transparency the original officer recommendations be published, as well as the Equality Impact Assessment and the geographical breakdown of proposals. A list of organisations total proposed funding was also requested, rather than broken down into different projects funded by different directorates.

·        The Committee proposed that the funding in the welfare advice budget be allocated to welfare advice services, particularly those with a good track record in delivering these services.

·        Concern was expressed that many longstanding third sector and communityorganisations faced significant cuts in funding and possible closure. Their expertise and experience in delivering services is essential in this difficult economic climate. The reasons for reducing or ceasing their funding to such an extent should be fully justified and communicated to organisations and members.

·        The Chair also stated that if it is later found that the council is not discharging its duty to the public, that questions will have to be answered as to why these funding decisions were taken in the light of the welfare changes and other funding cuts that will soon be faced in Tower Hamlets.

·        The Committee also reminds the Mayor of the Overview and Scrutiny Committee’s plan to undertake a scrutiny review of the mainstream grants process, and they asked that the Executive co-operate fully with this.

·        Given the lack of information currently available in relation to the decisions being made, it would be ethically impossible for OSC to agree with the decisions. The Executive is urged to share publicly the information on which they are basing their decision. If this is not done, it was confirmed that once a final decision has been made by the Executive, that decision could, and would in all probability, also be called in for consideration by the OSC.