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    Budget presentation september 2013 Budget presentation september 2013 Presentation Transcript

    • Budget Focus 2014/15 – 2017/18 September 2013
    • Purpose of this Session • The scale of the challenge • Where does the Council spend ? Budget Context • What a good Medium Term Financial Strategy looks likeFinancial Strategy • Where should savings be made? • Council Tax? Considerations & Thoughts (Not Proposals)
    • Overall Aim “In year” expenditure matches “in year” income over the medium term whilst maintaining our most important and valuable services For the period 2014/15 to 16/17 Reduce net expenditure by £30m* * Working assumption following CSR 13 and subject to revision
    • The Challenge - Summary Funding Reductions • - £35.1m Budget Pressures & Other Costs • - £6.5m Inflation • - £6.9m Council Tax • + £2.1m Last 3 Years – 2011/12 to 2013/14 Next 3 Years – 2014/15 to 2016/17 Funding Reductions • - £27.9m Budget Pressures & Other Costs • - £4.0m Inflation • - £12.5m Council Tax • + £2.1m
    • The Challenge – Savings Requirements £0.0M £25.0M £50.0M 2011/12 to 2013/14 Budget Reduction £48.5m 2011/12 to 2013/14 Met By 2014/15 to 2016/17 Budget Reduction £44.4M 2014/15 to 2016/17 Met By Inflation, £6.9M Inflation, £12.5M Budget Pressures, £6.5M Budget Pressures, £4.0M Funding Reductions, £35.1M Funding Reductions, £27.9M Council Tax, £2.1M Council Tax, £2.1M Savings & Efficiences Already Approved, £45.9M Savings & Efficiences Already Approved, £3.6M Future Savings & Efficiences Required, £30.0M Other, £0.5M Other, £8.7M 2011/12 to 2016/17 Budget Reductions
    • The Challenge – Funding Reductions NB Based on £30m Savings Requirement Reduction 2011/12 to 2013/14 24% Forecast reduction 2014/15 8% Forecast reduction 2015/16 8% Forecast reduction 2016/17 4% RSG & General Grants 2016/17 56% RSG & General Grants Reduction 2011/12 to 2016/17
    • The Challenge – Overall Scope for Savings (Funding) Specific Grants 50% Revenue Support Grant & Other General Grants 16% Council Tax 11% Business Rates 8% Fees & Charges 14% Interest Income & Use of Balances 1% 2013/14 Sources of Funding - £520.8m
    • The Challenge – Scope for Savings (Spend – Controllable vs. Non Controllable) Other Costs, £40.7M, 8% Not Controllable (including Expenditure Funded by Specific Grants), £307.0M, 59% Contract Costs, £81.2M, 15% Staff Costs, £91.9M, 18% 2013/14 Gross Expenditure of £520.8M Note: Non Controllable expenditure includes £125m Dedicated Schools Grant
    • The Challenge – Where does the Controllable Spend Go (Portfolio Expenditure)? Adult Social Care, £72.7M, 34% Children & Learning Support, £32.1M, 15% Resources, £26.6M, 13% Traffic & Transportation, £24.9M, 12% Environment & Community Safety, £21.8M, 10% Culture, Leisure & Sport, £11.1M, 5% Port & Miscellaneous, £12.5M, 6% PRED, £7.1M, 3% Housing, £5.0M, 2% 2013/14 Gross Controllable Expenditure of £213.8M
    • The Challenge – Where Does The Council Spend (Portfolio Expenditure)? Children & Education • Safeguarding: • Adoption • Fostering • Children’s Homes • Respite care • Early Years: • Nursery Grant Funding • Children’s Centres • Education • Curriculum support • Home to School Transport • Pupil Place Planning • Truancy • School Admissions • Special Educational Needs • Youth Service Culture, Leisure & Sport • Culture: • Arts grants & exhibitions • Financial support to Theatres • Libraries • Museums • Community Centres • Events: • Bandstand • Food Festival • KGV Fireworks • Leisure: • Parks and open space maintenance • Leisure centres • Allotments • Seafront Environment & Community Safety • Environment: • Street cleaning • Refuse collection • Refuse disposal • Recycling • Public Toilets • Dog Kennels • Enforcement (fly tipping, dog fouling etc.) • Cemeteries • Trading Standards • Community Safety: • Community Wardens • Domestic violence support • CCTV • Emergency Planning Housing • Homelessness (Bed & Breakfast and Hostels) • Telecare • Homecheck • Regulation: • Houses in Multiple Occupation • Unsafe homes • Housing allocations
    • The Challenge – Where Does The Council Spend (Portfolio Expenditure)? Health & Social Care • Health: • Smoking • Obesity • Substance misuse • Alcohol misuse • Sexual Health • Prevention activities • Adult Social Care (Mental Health, Learning Disabilities, Physical Disabilities): • Home Care • Day Centres • Care Homes • Social Workers Planning, Regeneration & Economic Development • Planning: • Planning Applications • Planning Advice • Conservation • Regeneration • Economic Development: • Town centre management • Commercial Property portfolio • Tourism & Marketing • Commercial Port Resources • Housing Benefits • Council Tax Benefits • IT • Finance • HR • Legal • Property maintenance • Customer Services & Web services • Democratic Services • Neighbourhood Forums • Grants to Voluntary Organisations • Registrar’s Traffic & Transportation • Roads maintenance • Road gritting • School Crossing Patrols • Subsidised bus routes • Free Bus Passes • Travel Tokens for disabled • Car Parks • Residents parking • Tree maintenance
    • Overall Messages Savings requirement of £30*m to be found from circa £214m of funding (savings therefore represent 14% gross expenditure) £73m (or 34%) of funding is represented by Income from Fees & Charges – but fees & charges unlikely to be increased by 14%. Therefore if fees & charges were excluded, £30m needs to be found from £141m of expenditure therefore savings could potentially represent circa 21% of expenditure Of the remaining £214m, £81m is contained in contract expenditure Almost half of all expenditure is made in Adult Social Care (34%) & Children’s Services (15%) – ability for budget protection for these Services is therefore limited Scope for making the majority of savings in short term will be from staff and other service expenditure with some limited opportunities for increasing income Longer term savings from contracts will need to be made through smarter commissioning based on lean criteria
    • Medium Term Financial Strategy – What Does it Look Like? Overall Aim • “In Year” income equals “In Year” expenditure over the medium terms whilst maintaining our most important and valuable services • For the next 3 Years – a reduction in net spending of £30m* Broad Objectives • Protect the Baseline – i.e. no deterioration in the Council’s financial position • Increase Income • Reduce Costs • Effective Financial Framework • Strong Financial Resilience Detailed Actions • Identify proposals for increasing income and reducing costs • Review policies for consistency
    • Medium Term Financial Strategy – Making the Savings Protecting the Baseline • Managing demand: • Informed decision making (strong advice and governance) • Shift spend from reactive to preventative • Capital Investment for Employment • Policy alignment (e.g. Affordable Housing, Social Care Charging Policy) Increasing Income • Entrepreneurship: • Selling services • Property management • Property Development • Fees & Charges • Increase Council Tax • Capital Investment for Income • Capital Investment for Growth (Business Rates) • Policy Alignment (e.g. CIL, Revenue Contribution to Capital) Reducing Costs • Efficiency: • Transformation • High cost services • High performance services • Terms & conditions • Transfer to Vol / Comm Sector • Rationalising buildings • Service Reductions: • Prioritising Service savings • Smart commissioning (rationed criteria, needs based) • Capital Investment for savings Financial Framework • Forward Financial & Service Planning • Responsible spending • Accountable decision making • Policy Alignment (e.g. clawbacks and carry forwards) Financial Resilience • General Balances to “smooth” Savings Requirements • Contingency to manage “financial shocks” and financial risks e.g. overspendings • Spend to Save fund for “up front” investment that releases future savings and redundancy costs, – remove barriers to making savings • Other Earmarked Reserves to manage known future liabilities and likely risks
    • Where Should Savings Be Made – Should Any Services be Protected? Services to Vulnerable? • Adult Social Care • Safeguarding • Revenues & Benefits Visible Services? • Waste collection • Street cleansing Protect or Generate Income? • Council Tax & Business Rate recovery • Financial Assessments and Benefits Governance Services? • Necessary services that provide information for key decision making • Core level of governance and operational support e.g. Legal, Finance, IS & HR
    • Where Should Savings Be Made – How Deliverable are Savings? Scale of savings made in past Proportion of Services of a statutory nature “Fixed” contracts as a proportion of budget VFM – High Cost and High Performance DELIVERABILITY – Scope for making savings in the short term
    • Where Should Savings Be Made – Statutory Duties Statutory Responsibilities Service on Which Power/Duty is Placed Number of Duties/Powers Adult Social Care/ Public Health 102 Allotments 1 Building Control 13 Chilldrens Social Care 79 Civil Contingencies 1 Community Safety 14 Coroner 11 Customer, Community & Democratic Services 7 Education 154 Enforcement/ Trading Standards 57 Environment 189 Finance 31 General Power/Duty 87 Highways 171 Housing 52 Libraries 3 Licencing 37 Local Land Charges 1 Monuments 5 Museums 1 Parking 3 Parks 1 Planning 78 Regeneration 1 Registrars 23 Revenues and Benefits 53 Waste Collection/ Disposal 27 1,202 Statutory Powers/Duties
    • Where Should Savings Be Made – Summary of Considerations Saving Compared to Base Cash Limit Contracts as a Proportion of Budget Statutory Services Current VFM assessment Overall Scope For Savings 2014/15 Savings Priority Children & Education Medium Low High Medium Medium ? Culture, Leisure & Sport Medium Medium Medium Medium Medium ? Environment & Community Safety Medium High High Medium Low ? Governance and Audit Committee Medium Low High Medium Medium ? Health and Social Care Low High High Medium Medium ? Housing High Medium Medium Medium Medium ? Leader High Low Low Medium Medium ? Planning Regeneration and Economic Development High Low Medium Medium Medium ? Resources High Low Low Medium Medium ? Traffic and Transportation High High Low Medium Medium ? Matrix of Indicators - Scope For Savings
    • What Does £30m Look Like Across Portfolios? Portfolio Savings Targets 2014/15 2015/16 2016/17 Total % Children & Education 2,046,600 2,046,600 2,046,600 6,139,800 19.85% Culture, Leisure & Sport 566,100 566,100 566,100 1,698,300 19.85% Environment & Community Safety 1,014,200 1,014,200 1,014,200 3,042,600 19.85% Governance and Audit Committee 23,800 23,800 23,800 71,400 19.84% Health and Social Care 4,304,000 4,304,000 4,304,000 12,912,000 19.85% Housing 145,100 145,100 145,100 435,300 19.84% Leader 15,400 15,400 15,400 46,200 19.87% Planning Regeneration and Economic Development 83,400 83,400 83,400 250,200 19.84% Resources 1,558,500 1,558,500 1,558,500 4,675,500 19.85% Traffic and Transportation 242,900 242,900 242,900 728,700 19.85% 10,000,000 10,000,000 10,000,000 30,000,000 19.85% £30m 3 Year Savings Target 3 Year Saving
    • Key Messages Most portfolios have good reasons for having difficulty in delivering savings in the short term Reminder – the greater the protection to the larger Services, the greater the incidence of savings on all other Services All Services to make savings proposals and each individual proposal considered on its merits
    • Medium Term Financial Strategy – Council Tax Increase or Council Tax Freeze Grant? • Forecast assumes 2% increase per annum for next 3 years amounting to £1.2m per annum • So, from 2015/16 £2.4m will be embedded within the Council’s base funding • PCC is a low taxing Authority – circa £5.5m per annum below our statistical neighbours and equivalent to a tax increase of 9% • A 2% increase amounts to 35p per week for a Band B Taxpayer • Circa 50% of all households receive some form of exemption or discount Council Tax Increase • Council Tax Freeze Grant re-imburses the Council at £0.7m per annum for the next 2 years and is confirmed to 2015/16 only • From 2015/16, the £1.4m Council Tax Freeze Grant could be withdrawn • Compared with increasing the Council tax by 2% per annum for 2 years, if Council Tax Grant is withdrawn, the Council will be £2.4m worse off in 2016/17 Council Tax Freeze Grant
    • Thoughts & Questions