BUDGET STRATEGY: UNDERLYING PRINCIPLES Recognition of political - - PDF document

ADULT SOCIAL CARE AND HOUSING OVERVIEW AND SCRUTINY PANEL THE COUNCIL’S MEDIUM TERM FINANCIAL PLANS 2014/15 – 2016/17

TUESDAY 17 SEPTEMBER 2013

Alan Nash Borough Treasurer

BUDGET STRATEGY: UNDERLYING PRINCIPLES

• Recognition of political priorities e.g. ‘clean and green’, economic

development

• Efficiencies and savings will be taken as early as possible and will not

be constrained by financial years – the ‘glide path’

• Savings will be focussed on efficiencies and the back office – the

impact on front line services to be minimised

• Twin track immediate savings and transformational change
• Balances will be used in a measured way to facilitate the

implementation of savings – no ‘knee-jerk’ reactions

• Business rates from the regenerated town centre will help to bridge

the budget gap from 2016

PLANNING ASSUMPTIONS

• Funding reductions in line with 2014/15 settlement
• Grant reduction in 2015/16 in line with Spending Round – 10%
• Pay award 1% in 2014/15 and 2015/16; 2% in 2016/17
• General inflation (CPI) averages 2.2% throughout the period
• Pressures consistent with previous year’s - £1.5m
• Council funded capital programme of £6m each year + £4m in

2014/15 for school capacity

PLANNING ASSUMPTIONS (CONTINUED)

• Council tax freeze funding equivalent to 1% in 2014/15 and 2015/16

will be accepted – consistent with policy in previous years, but does not preclude a higher increase

• No allowance for new NHS investment in social care or changes to

the New Homes Bonus at this stage – £2bn on new NHS investment to support social care announced, but distribution of funding currently uncertain – £400m of New Homes Bonus directed towards Single Local Growth Fund and controlled by the Local Enterprise Partnership

• Risk of revenue becoming capital?
• How will funding be accessed?
• Will the Council be in a position to benefit?

INCREMENTAL FUNDING GAP

5.5 6.0 6.6 Incremental Gap 18.1 12.6 6.6 Funding Gap 2016/17 £m 2015/16 £m 2014/15 £m

FOCUS ON NEXT YEAR’S BUDGET

2014/15 BUDGET – STARTING POINT

£1.9m Underlying Budget Gap for 2014/15 £1.0m £1.1m £0.4m Significant one off items Additional contingency Time Square Members Initiative Scheme £4.4m Use of Balances 2013/14

2014/15 BUDGET – BUDGET GAP

£6.6m TOTAL BUDGET GAP (£1.3m) Council Tax/New Homes Bonus etc £1.5m Pressures £1.9m Inflation £2.6m Government Grant reduction £1.9m Underlying Budget Gap

2014/15 BUDGET – BRIDGING THE GAP

• Take a firm line to limit future year’s pressures

– but, they reflect demographic changes and increases in demand for services

• Increase Council Tax

– 1% generates £0.5m – referendum for excessive increases (2%+ ?)

• Utilise balances

– £8.6m at 31 March 2014 – £4.0m minimum prudent balance – £4.6m available – but only delay the need for alternative measures

• Identify savings

– efficiencies, back office or front line services

BUDGET TIMETABLE

Overview & Scrutiny Commission – review budget proposals 30 January Budget and Council Tax agreed 26 February Executive – approves budget package for consultation 10 December Executive – approves commitment budget and budget timetable 15 October Portfolio Review Groups – further review of detailed budget proposals (if required) 18 & 19 November Portfolio Review Groups – review detailed budget proposals 21 & 22 October Overview & Scrutiny Commission – budget overview 5 September