2. 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)
3. 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
4. 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
5. 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
6. 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
7. 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
8. 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
9. 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
10. 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
11. 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
12. 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
13. 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
14. 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
15. 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
16. 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
17. 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
18. 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
19. 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
20. 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
21. 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
