Agenda item

(To receive a report which invites the Committee to consider a report on the Music Service Options Review which is due to be considered by the Executive Councillor for Adult Care and Health Services, Children's Services on 5 May 2015)

Consideration was given to a report which invited the Children and Young People Scrutiny Committee to consider a report on the Music Service Options Review which was due to be considered by the Executive Councillor for Adult Care and Health Services, Children's Services on 5 May 2015.

It was reported that Lincolnshire County Council had made the decision to withdraw its financial contribution to the Music Service post April 2016, and that there would be a 50% reduction (£200,000) in funding during 2015/16.  This was reflected in the budget approved by the full council on 20 February 2015.

In preparation for this the Music Service had been considering a set of options to ensure its sustainability for the longer term future, so that while the Council may not continue to provide music services there would still be a provider of music services within the county.  Members were advised that the preferred option was for Lincolnshire County Council to cease to operate a music service and supported Lincolnshire Music Service (LMS) to become a viable charitable entity.

This was a highly respected music service within the Council and delivered to 99% of schools in the county, providing a service to about 20,000 children.  It offered an opportunity for every child to take part in music.  The team was fully behind the option to externalise the service.

Members of the Committee were provided with the opportunity to ask questions to the officers present in relation to the information contained within the report, and some of the points raised during discussion included the following:

·         It was confirmed that this was not a statutory service;

·         Members would support the idea that this service should be supported, as the opportunities it provided for children were fantastic and it was a very inclusive service.  It was acknowledged that it was not a statutory service but it did contribute to some statutory needs although these statutory needs were the responsibilities of schools;

·         In terms of due diligence, there was a list of issues to address before the Portfolio Holder would be able to make an informed decision.  An independent legal advisor had been appointed to ensure these issues were dealt with properly and that the service and LCC could make an informed decision;

·         It was queried whether there would be a cost implication for schools if the service became reliant on being a trading company;

·         Business modelling and projections were being carried out for the moving forward of the Service.  This Service had always been well supported by the Council.  Seven years ago the authority provided £900,000 in funding, however from next year onwards, that would be reduced to zero.  However, trade had remained stable.  It was considered important that savings were made before it impacted on children through higher charging, and it was proposed to make those savings from management overheads in the first instance;

·         If there was a need to continue to make additional savings the Service would re-align its priorities.  It was not thought that the offer would reach a cost which would become detrimental to take up, as this would not be in the service's best interest whether it was an in house or outsourced service;

·         The vast majority of the services were bought back by schools, but some of the activities were bought back by families themselves;

·         Some courses, such as for GCSE or A Level would be fully funded by the school;

·         It was felt that music was a very important part of the curriculum;

·         The authority was a mix of a service provider and commissioning council;

·         The Music Service had always been a local authority service, and had always sourced its own funding in addition to LCC contribution.  The proposal provided a real potential for the Service to source new income streams.  Additional funding from the Arts Council had been received, but this had not been relied upon in the budget setting for the service;

·         Concerns were raised regarding the potential inequalities which could be created by the changes to employee terms and conditions when the Service became a charitable body;

·         Members were advised that the TUPE transfer was part of the due diligence, and that as a charitable trust it would be able to set its own employee terms and conditions, but an impact assessment would be carried out;

·         It was clarified that there were currently no proposals to amend the Terms and Conditions, and the Scrutiny Committee was being asked for its comments on the preferred option to ensure the sustainability of the Music Service;

·         The current Terms and Conditions were a mix of national and local, and all staff would be transferred on the existing Terms and Conditions.  There was no intention to vary the terms and conditions of existing staff before they entered TUPE;

·         It was queried whether, as a charitable body, the Music Service would be eligible to receive gift aid.  It was confirmed that it would be eligible for gift aid, however, officers did not want to rely on this as an income stream;

·         It was queried whether additional savings could be made by using business support to carry out the administration work.  However, members were advised that a lot of work would need to be done to systems and the website for what would be a very small requirement;

·         Officers had spent a lot of time talking to other authorities and services regarding the models they were using for their music service, and it was noted that it was now unusual for a local authority to continue to run the music service;

·         There had always been subsidies for those children who were eligible for free school meals of 50%, and for Looked After Children, services were completely free.  It was felt that there was a supportive offer in place for those children who wanted to take up this service, but may not otherwise have the means to;

·         The current offer was highly dependent on the Arts Council Funding;

·         Members found it very reassuring that regardless of a child's background, if they wanted to learn music they could;

·         Music was one of the most expensive extra-curricular activities, and it was often the mid-income families that found it most difficult to pay for the lessons;

·         A whole class lesson was offered to ensure that no child missed out, and there were regular events throughout the county, and new ideas were also being trialled;

·         It was noted that the Music Service was about access, and when the due diligence was carried out and the cost per hour became too high and it was no longer accessible, then the Service would look at alternative models;

·         The whole class programme would cost a school £250 per 12 week programme, but the total cost would be £1200-£1300, so the school offer was heavily subsidised;

·         80% of primary schools were buying into this project;

·         It was thought that, regardless of whether the music service was delivered internally or externally the cost would be approximately the same;

·         It was thought that there were not any financially easy decisions;

·         It was queried how secure officers thought that the Arts Council funding was. It was noted that the Service had just received three year funding, with a 29% uplift in the grant.  However, the Service would not be reliant on this 29% increase for future budget setting, and it had not been included in the current year's budget.  Despite this officers were reasonably confident that funding would continue;

·         The sustainability of the Arts Council funding would affect the Music Service whether it remained within the County Council or became external;

·         A councillor commented that the Senior Music Advisor was a very experienced leader, and had been looking into this issue for a long time, and knowing the extent of the work which had been done the councillor felt comfortable that they could support the proposal which had been brought to the Committee;

·         It was clarified that it was not a statutory duty of the local authority to provide a music service;

·         The proposal was that the local authority would support the Music Service in establishing itself as a charitable entity;

·         It was queried who the Music Service would be accountable to, and members were informed that this would possibly be the potential trustees, and the Service would be looking for staff involvement.  Governance arrangements would include a Board of five trustees, and a staff liaison group who would report to the Board of Trustees, who would then be accountable to the Arts Council England;

·         Almost £140,000 of underspend had been handed back to the county council for the year 2014/15 due to internal carry forward rules;

·         Councillors had some reservations in relation to the finance arrangements, and requested that an update on progress should come back to the Committee.  However, considerable reassurance had been gained through Councillor Mrs Brockway's comments.

The Committee agreed that the proposal should go forward, but that the concerns expressed in relation to finance be noted.

RESOLVED

1.    That the Committee support the recommendations to the Executive Councillor as set out in the report;

2.    That the following comments be passed to the Executive Councillor in relation to this item:

·         It was queried what checks would be put in place to ensure that the new charitable entity would not be open to challenge by other organisations due to affecting their services. The Committee was informed that this would be considered as part of the due diligence process.

·         Concerns were raised about the future finances of the new charitable entity and its viability. The Committee raised concerns about the reliance on Arts Council England funding and the risk of future funding being withdrawn, and also whether the increase in the cost of music lessons would make the service inaccessible to some families, in particular middle income families, and affect the uptake by schools and families.

It was noted that lessons currently cost £35.80 per hour. The cost had increased by 9% in September 2014, but no further increase was planned for September 2015. Officers reported that as part of the due diligence process, the impact of increased costs would be examined and if the costs per hour became too high, then alternative models would be explored. It was highlighted that whole class lessons were sold to schools at a subsidised rate. This currently costs the school £250 for a 12 week project. In future the cost to schools would be approximately £300-350.

Officers were confident that the Arts Council England funding would continue, but if the funding was reduced then alternative models would be looked at. The Committee suggested whether an alternative private funder could be found to help support the service going forward.

·         Concerns were raised about the TUPE transfer of staff over to the new charitable entity on reduced terms and conditions. The Committee was informed that once established the new charitable entity would be able to set its own terms and conditions (subject to legal provisions being met) but Members were reassured that staff would be transferred over on existing terms and conditions. The transfer of staff would be looked at as part of the due diligence process.

·         The Committee requested that a progress report be brought back to a future meeting.