Geoff Pearce on contracts, East London Solutions and CIL

Geoff Pearce is director of finance and resources for the London Borough of Redbridge. He has worked at a number of London boroughs and has been at Redbridge for over 20 years, the last 11 of them as treasurer.

Room 151: How is your Community Infrastructure Levy going?

Geoff Pearce: It kicked off in January and the planning people who have led on this have had quite a bit of publicity and been speaking to other people. As a body we feel quite please and proud with how it is going. The fullness of time will show how it pans out but we are expecting £2m a year once the thing gets in full flow. It’s difficult to predict because you’d have to have a view about the economy, a view about how that is going to impact on Redbridge, a view on Crossrail and all sorts of stuff. It could take more, our planners might say a bigger figure but me being the miserable old treasurer, I go for a cautious figure.

Room 151: Has the finance department been heavily involved?

GP: We work through the numbers and check them. Clearly the figures need to stand up, so my people have played quite a big role in agreeing what sort of sum is reasonable. When there is an option around funding a finance department would be silly not to consider it in these times.

Room 151: Has it been difficult to explain to developers?

GP: It’s not an easy concept to explain, especially when you go through the numbers, but Section 106 was difficult to explain as well. We did a fair few briefings with developers and one point that stands out is the clarity of the numbers with CIL; you can go onto our website and work out broadly what you would pay, whereas 106 was about a negotiation. If you’re a developer looking for certainty of figures and the ability to plug it into your calculations and work out whether it’s affordable, feasible and so on, there’s quite a strong point there.

Room 151: How is Crossrail going to pan out do you think?

GP: We’re hoping it will add a lot of value to the borough and we’re in discussions with other stakeholders to see how we can do it. At the moment it doesn’t feel close enough for people to see it as being real, but it is there, people are looking at Ilford and Redbridge and if you have a 10-15 year vision of life you factor that in and say it’s significant. Our CIL went live January 1, the Mayor’s CIL went live April 1, there were two flurries around the deadlines which our planning and legal people dealt with.

We’re optimistic because like lots of other people we do need regeneration, and a major new transport link connecting all the way across London is a big attribute to have so going forward it is exciting.

Room 151: Will the Olympics have much impact on you financially? 

GP: We’re very close to Newham, in fact some bits of our borough are closer to the Newham games site than other bits of Newham are. So we’re going to have lots of people staying in the borough, coming through the borough, a lot of through passage. We’re looking at a range of things from parking to accommodation although we’re not one of the Olympic boroughs so we don’t get the funding.

Room 151: You’re doing quite a lot of work on saving money on contracts aren’t you?

GP: Yes we’ve done a number of things there. We have set up a new committee of members to look at all contracts about two and a half years before we let them, because actually if you are letting a big contract 18 months goes on a European procurement route.

So members are looking at that and making sure that the design of the contract is as you want, we’re not doing something funny or ordering specialist tarmac when you need normal tarmac and so on. It’s challenging it at the start. Although we have always looked at contracts quite hard, this is an in depth focus on the big contracts coming up to drill into the detail.

We have written to all our contractors saying we’re going through the torment of the damned, can you suggest ways to cut money out? A number of them have suggested things so we have made some savings there on some big contracts.

Room 151: Can you put a figure on savings?

GP: Well its early to say but it’s certainly many hundreds of thousands of pounds.

We have also introduced a scheme where if we pay people very quickly we get a discount of 1.5% per contract, hopefully that is going to save us a hundred grand, we’ll have to see how it goes.

We’ve talked to people about contracts. Some of them are based on RPI and we’ve said we’d rather link it to CPI; it’s trying to make changes in contracts that better reflect the world we are currently in.

Room 151: CIL is a big one in terms of innovative revenue generation, is there anything else you are doing?

GP: Well if I can widen the question slightly with cuts we have done three online consultations with residents and other stakeholders which we regard as quite innovative. That’s gone down very well, we did one about capital funding and a couple on revenue funding where we said to residents, we have to save £25m one year, another large sum of money in the following years, how do you think we should do that?

It’s given our members confidence because there was actually quite a good match between what the residents suggested and what members were doing. That has helped them in terms of having confidence to look at particular areas and give support to their views.

Redbridge has always been a low cost borough, we’re very middle class and the previous government distributed budget for deprivation and things like that in line with their views so we have always come out in the middle of that. As a result of never doing well under government funding we have always had quite a robust budget process. We’ve been doing tough budgets for years so we have quite developed in-house processes. We are low cost already so we have the nightmare of having to make savings on what is already a low cost basis.

We’re heavily involved in East London Solutions where six boroughs are working together to do shared services, joint procurements and things like that.

We’re also looking at property with flexible ways of working and bringing in new techniques so we can spend less on offices. We have developments in IT around Voip and Thinclient where we make savings on telecoms. With Thinclient instead of having a PC on your desk you have a box the size of a large paper bag and everything is held centrally. That saves you a lot of money because those boxes are pretty cheap and you can move around. In fact recently it showed its worth – a building in Ilford collapsed and we had to move out of two nearby buildings in case there had been knock-on damage. We were easily able to relocate people because you just log in under your name and say Geoff Pearce is working from this box. You can work anywhere so there’s all sorts of flexibilities and savings that come with that.

Room 151: Can you tell us about East London Solutions? What services are being shared?

GP: It isn’t that everyone is sharing everything, we’re looking at a number of areas. Sometimes it depends on the software so if people are using the same software they can share. As a programme the six boroughs are all dividing work up to look at buying an East London set of IT solutions. It’s early days but we are looking at all council functions to see what will work together and then two of the six, four of the six, etc will sign up to work together if it works for them.

Room 151: So no shared directors?

GP: We don’t have shared chief execs and directors of finance, I don’t know if it’s a good or a bad thing. Sometimes you don’t save a lot of money because you think I’ll have one director of finance, pay him or her a bit more, but there’s still all the work to be done so you have to get a deputy: sometimes those things don’t save quite what people think.