HERTFORDSHIRE COUNTY COUNCIL COMMUNITY SAFETY CABINET PANEL WEDNESDAY 1 APRIL 2009 AT 2.00 P.M. Agenda Item No. 7 THE CREDIT CRUNCH: THE POTENTIAL IMPACT UPON AND RESPONSE BY THE COUNTY COUNCIL AND ITS PARTNERS (Community Safety Response) Joint Report of the Chief of Fire Officer, Head of Trading Standards, the Head of Crime & Drugs Strategy Unit, the Head of Statutory Services, the Head of Safety, Emergency & Risk Management Unit Author: Tel: Chris Sweeney, Finance, Information and Commercial Services Director 01992 555303 Executive Member: Richard Smith, Community Safety 1. Purpose of the Report 1.1 Over the last year both UK and global economies have significantly deteriorated and the UK economy has moved into recession. A report was presented to the Policy and Resources Cabinet Panel on 15 January providing some information on the financial risks and uncertainties demands arising from the economic downturn that will impact on the 2009/10 and future budgets. It also set out what Hertfordshire County Council and its partners can do to help local businesses and people cope with the economic situation. The Panel referred the report to Service Cabinet Panels for further consideration of the issues that would directly affect their respective services. This report covers those issues relating to Community safety. 2. Summary 2.1 The UK economy is currently one which is moving from a relatively high level of inflation to expected lower levels or even deflation. It is also experiencing falls in land and property prices, shortage of credit, lower growth and rising unemployment. The impact of this is affecting all sectors including local authorities, their residents and businesses. 2.2 Community Safety Services have looked at the potential impact of the economic downturn on the department and identified the issues arising for them. These are detailed below. 3. Recommendations 3.1 That the Panel notes the information contained in this report. 533576030 4. Coroner Service 4.1 We have not noted any impact on death referral rates (projected to be 3200 referrals per annum). The service will deliver within budget this financial year. Body Removals contract (£35,000 per annum) was negotiated in December 2007 with 2 years remaining. The Mortuary Services contract (£200,000) was extended until July 2009. 5. Registration Service 5.1 The Registration Service has an annual income of £2,000,000 per annum and expenditure of £3,000,000. We are seeing a reduction of income from ceremonial services including marriages, civil partnerships, civil funerals, re-affirmation of vows and civil namings. We envisage that customers will postpone or cancel ceremonies or change to 'cheaper option' ceremonies such as Register Office / Statutory Weddings. Staff are paid sessional fees hence expenditure will reduce as ceremonies reduce. Statutory Registration services such as birth, death and stillbirth registrations appear constant. 5.2 We have ensured that our ceremonial pricing structure offers a range of options for all budgets. We will be looking to market 'reasonably priced' ceremonies and guidance how customers could reduce general costs. In addition, ceremonies generate income for local private business including hotels, florists and caterers. We will continue to explore ways of maintaining the ceremonial business whilst controlling expenditure. 6. Citizenship Unit 6.1 Applications for British Citizenship appear to be unaffected (2000 per annum). Hence both Nationality Checking Service and Citizenship ceremonies throughput remains constant. The naturalisation process is expensive, costing a family of four in excess of £1,200. Thus there could be a reduction in applications for those who choose rather than need to become British. 7. Fire & Rescue 7.1 History has shown that in times of recession cases of arson increase. This increase can be expected to be seen across all types of fires and not just within property. The obvious potential is for increases within the commercial sector as businesses struggle to maintain financial viability. However it can be expected that car and secondary (rubbish etc.) fires may also increase. To address the potential for arson to increase the Service will need to be more proactive in its preventative measures. 7.2 Pressures on income. The Service relies on the Commercial Training Department at Longfield to generate significant revenue (£200k net). This department in the past has had contracts with some high profile national companies as well as locally based ones. It is anticipated that the worsening economic climate will mean companies will be more reluctant to place training 533576030 provision contracts, and those that do will be of less monetary value than previously achieved. 7.3 Partnerships may be difficult to maintain. The Service delivers many of its fire safety initiatives through partnership working. As the economic climate worsens it can be foreseen that partners may concentrate more on their core activity which may compromise the Service’s ability to deliver the impressive outcomes that have been seen to date. 7.4 The Service has historically always attracted high numbers of applicant for every firefighter position. As the number of unemployed rises it can be foreseen that the number of applicants will increase. Historically the Service has received over 1000 applicants for as little as 20 posts – this number may well increase significantly with every sifted application having a financial cost. A potential benefit of this situation is that the quality of candidate may rise. 8. Trading Standards 8.1 Background The current recession and lack of available credit has led to the issues in particular for Trading Standards of consumers/businesses falling into debt on mortgages, credit cards and secured/unsecured loans with the knock on effect that this has. In such times there is an even greater need for effective legitimate regulated markets that work well for both consumers and business. 8.2 Implications / associated risks for Trading Standards Service More enquiries from businesses and consumers on credit default. Reactive resource implications in terms of increased demand for service for consumer and business advice teams. Higher risk of dubious organisations setting up to take advantage of market conditions e.g. credit brokers, credit unions, loan sharks – see specific information re loan shark activities below. Higher risk of businesses cutting corners due to market conditions / saving on legal requirements which require cost investment. Re-active resource implications in terms of increased demand for service for complaints investigations and business advice teams. Increased need for proactive investigation and monitoring of credit and loans market to identify breaches. Resource implications in terms of increase demand for service for complaints investigations and business advice teams. Increased need for effective, expedient and targeted business advice to start up businesses during the recession so that the likelihood of success is heightened. Resource implications in terms of increase demand for service for business advice team. Risk that we have not got enough staff who are sufficiently trained to answer queries. Resource implications in terms of increase demand for training. 533576030 Potential for increase in prosecutions costs both staff resource and monetary (barristers costs). Risk of costs not being recovered. Potential loss in income for Metrology laboratory due to recession – businesses cutting back / companies going out of business. Potential loss of income for weighbridge 8.3 Potential loss of income from verifications, predominantly testing petrol pumps. Trading Standards are required to test petrol pumps if their measures have been altered in any way. Currently some garages routinely ‘cut back’ their measures to the minimum quantity permitted (e.g. 0.3% ‘under measure’) This is at a cost to the garage, and an income to trading standards. In the time of recession, and less sales, garages might not find it economical to carry on this practice, meaning a loss of income to the Service. Potential loss of income in terms of licensing – explosives in particular. Potential increase in the un-safe storage and sale of explosives (particularly fireworks) due to premises looking to evade licensing and other costs Current and future actions being planned / undertaken / considered Trading Standards through their regional and national connections have secured the offer for a Loan Shark Team to work in Hertfordshire (at no extra cost to the County Council) in order to target loan sharks and work with individuals and partner agencies to provide alternative sources of credit. Such work would necessitate approval by Cabinet, and a full cabinet report detailing the issues and advantages is currently being formulated. Increased number of staff to be trained to a higher level on Credit legislation. Service currently has 3 ‘experts’ all of whom currently undertake (by way of staff resource necessity) a high proportion of other duties Increase in skill levels required for advice staff to enable effective intervention in cases and negotiate with finance companies working with other partners such as CAB and Money Advice Planned proactive visits to finance companies based in the County Identification of and communication with other organisations dealing with credit and credit problems e.g. Insolvency practitioners Identification of any loan sharks. Increased contacts with partner organisations to aid such identification Liaise with other local authorities who deal with problematic credit companies Research needed into the role bailiffs are currently playing in the credit crunch. Potential for increased pressure on consumers. Research needed into legislative framework under which bailiffs operate – thought to be 533576030 virtually unregulated. Potential need for increased regulation and TS / local authorities as an advocate in this respect. 8.4 Increased liaison with the OFT (Office of Fair Trading) who have responsibility for credit licensing. Does the amended Consumer Credit Act have enough teeth to be effective? What steps could we take to be effective in the current climate? Will the OFT revoke credit licences given the current climate? Possibility of renting an empty shopping centre/high street shop on a short term lease in areas with higher deprivation indices e.g. Stevenage, Watford, Broxbourne, and create a temporary high street/shopping centre walk in “one stop shop for debt advice for consumer/business. Potential to be manned by money advice, TS and CAB experts. Has potential to increase access, awareness and use of debt advice services. Potential to enter into a major CAB partnership regarding money advice and provision of ‘credit crunch’ advice to consumers. Consumers likely to go to CAB for advice in the first instance as in recent years we have not had a high profile in dealing with credit issues Proactively visit all debt collectors/bailiffs Link with Probation Service /Illegal Money Lending Team to find loan sharks Widen the Government Trustmark scheme (which only currently relates to building / construction services) to the area of credit, providing potential for HCC Trading Standards to Trustmark people who are credit brokers, credit providers. Lobbying needed at Government level for this to happen Mitigating actions Service is taking Re-prioritizing of resources being undertaken so above implications of the credit crunch can be met. Monitoring of levels of service in order that quantifiable resource implications (unable to be met by re-prioritization) are identified 9. Safety, Emergency and Risk Management Unit 9.1 It could be argued that in challenging economic times a business continuity challenge (fire, flood, loss of key workers) which an employer might just have had withstood in a period of economic prosperity would almost certainly cause the business to fail in more difficult economic circumstances if they do not have business continuity plans. Moreover, difficult trading conditions may prompt employers to shed staff and in turn lose any resilience capacity they might have to cope with sudden or unplanned staff absences creating additional pressures on the enterprise and its economic viability. 9.2 Local authorities have a statutory duty to promote business continuity awareness to all businesses and voluntary organisations and a series of events and initiatives aimed at promoting the sound business benefits for developing business continuity plans have been planned throughout the year. We will 533576030 continue to signpost employers to sources of additional advice, template plans etc. 9.3 It is recognised that whilst benefits are to be accrued in spending time preparing contingency plans, the pressure for simple business survival” may preclude or severely limit the resource which business might have at their disposal to focus on this particular work activity. The objective of increasing the percentage of businesses in Hertfordshire which have business continuity plans may, in turn, be more difficult to achieve. 10. Crime & Drugs Strategy Unit Whilst there has been a lot of discussion about rising crime levels related to the current economic climate our collective views are as follows; Where crime levels are rising or static there is no evidence at this stage to suggest the economic climate is or will be a contributory factor. Burglary figures were increasing prior to the worsening climate and it is a crime category that crime partnerships are currently responding to. Related to the above, an increase in burglaries might be the result of the increase in security facilities on cars and that burglary offers an opportunity to obtain car keys and thereby circumvent car security systems. We have yet to see evidence that demand might well increase for ‘cheaper’ goods through unofficial channels and/or as undeclared proceeds from acquisitive crime. The financial value of goods is being forced down so we might witness an increase in acquisitive crime to fund drugs habits etc but not as yet. We might see a rise on domestic tensions as a result of redundancies etc but from the returns qtr 3 from the domestic violence helpline this has not been substantiated. Qtr 4 returns might well reveal a different picture. 533576030