BUDGET 2017-18committeedocs.northumberland.gov.uk/MeetingDocs/25396_M... Copyright 2009...

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BUDGET 2017-18

Area Committee MeetingsJanuary 2017

Context

• The Council’s budget is split into two main parts:– Revenue: which pays for day-today costs such as staff and

equipment– Capital: which pays for major projects such as buildings, schools

and roads• The revenue budget provides both:

– Statutory services: these must be provided by law– Discretionary services – the Council is not legally obliged to

provide these

Revenue Budget

• The Council’s gross revenue budget for 2017-18 is around £780 million. Some of this budget is made up of grants that can only be spent on specific services. For example, Dedicated Schools Grant and Public Health Grant.

• The net revenue budget is what is left (around £270 million) after these specific grants, and, fees and charges have been taken out. This is funded from a range of sources including General Government grants, Council Tax, retained Business Rates and use of balances.

National Government Funding Cut

Cumulative Pressures 2011-12 to 2019-20

How the Revenue Budget is FundedThe charts below show how the funding of Council’s budget has changed from 2011-12 to 2017-18, with much more emphasis on locally raised income such as Council Tax and Business Rates.

Original vs Revised Year 2 (2017-18)• The below table summarises how the original

2017-18 budget compares to the updated budget.£000

IncomeGrant reductions 2,861Increased Council Tax (3,703)Reduction in use of reserves 454Total income (388)ExpenditureReduction in inflation (1,368)Increased commitments 2,407Other reductions (651)Total expenditure 388

MTFP 2017-2020• The below table shows how the original MTFP

compares to the updated MTFP£000

IncomeGrant reductions 4,834Increased Council Tax (11,858)Reduction in use of reserves 6,337Total income (687)ExpenditureReduction in inflation (3,068)Reduction in commitments (6,224)Reduction in savings 9,979Total expenditure 687

Why has the position improved?• Council Tax income

– Increased taxbase due to new housing– Increased Adult Social Care Precept

• Treasury management– Re-profiling of capital programme– Increased Arch interest income– Reduced cost of borrowing

These improvements mean that the overall savings target has reduced by £10m

Council Tax• The Council is

proposing to increase Council Tax by 1.99% in 2017-18

• For Band D householders this equates to a 56 pence increase per week

Council Tax Band

2016-17£ p

2017-18£ p

Annual Increase

Weekly increase

Band A 970.69 990.01 19.32 0.37

Band B 1,132.48 1,155.01 22.53 0.43

Band C 1,294.26 1,320.01 25.75 0.50

Band D 1,456.04 1,485.01 28.97 0.56

Band E 1,779.60 1,815.01 35.41 0.68

Band F 2,103.17 2,145.01 41.84 0.80

Band G 2,426.73 2,475.02 48.29 0.93

Band H 2,912.08 2,970.02 57.94 1.11

Summary of EfficienciesEfficiency savings of £6 million are required in order to balance the budget in 2017-18. The proposals can be categorised as follows:

Savings proposals £000Back office savings 1,856Arch ‘dividend’ 1,000Local Services & Housing Review 939Increased income 707Leisure review 500Fire & Rescue review 500Street lighting savings 300Other efficiencies 207Total 6,009

Capital Programme

Capital Investment

New Proposals

• Schools in Morpeth and Ponteland• Leisure centres in Berwick, Blyth and

Morpeth• Multi Storey Car Parks to be built in

Cramlington, Hexham, and Morpeth

Treasury Management

Impact of Capital Investment on the Revenue Budget

Affordability

Core Achievements and Aspirations

Investments in People• £12m already invested in new schools –

Alnwick, Bedlington and Prudhoe• Further £105m due to be invested in new

schools at Morpeth and Ponteland• £31m five year improvement plan for

updating Council Housing Stock

• 1,000 affordable homes already provided, and a further 500 anticipated as part of Garden Village project near Ponteland

• Focus on improving health and well-being of communities, with investment in drug, alcohol and sexual health services

• Plus ever-closer integration with Northumbria Healthcare NHS Foundation

Vibrant, Prosperous County• (Anticipated) additional £12m capital

receipt from disposal of County Hall - to invested in county-wide developments as part of Market Towns initiative.

• Move to new HQ itself is anticipated to save residents £16m over 25 years

• Development partners Arch are proposing new retail complex at Bedlington

• Hexham House being reborn as £1.5m wedding venue and register office

Creative County• £30m investment in multi-storey car parks

at Cramlington, Hexham and Morpeth• Anticipated £20m ‘dividend’ from Arch

over next three years will help offset impact of cuts.

• 2016-17 Arch ‘dividend’ enough to pay for 160 social workers and repair 80,000 potholes

• New industrial properties and houses created by Arch will in turn provide additional business rates and Council tax income to support the revenue budget.

Friendly County• Tall Ships Regatta Blyth 2016 attracted

400,000 visitors and generated almost £13.5m financial benefit to Northumberland

Top priority is health and well-being of residents• £59m investment in new leisure

centres/library complexes for Berwick, Blyth and Morpeth

• £21m already spent on Ashington Leisure Centre.

• £3m on improving public parks at Amble, Ashington, Bedlington, Berwick, Blyth, Cramlington, Hexham and Morpeth

• Improvements in highways and infrastructure network, including £30m for the Morpeth Bypass and £5m on next stage of Ashington-Blyth-Tyne rail line.

• £27m Morpeth Flood Alleviation scheme completed

• £1m invested in new state-of-the–art gritting lorries

• £7m of Council funding to help deliver superfast broadband

• £25m in LED Street lighting which will save council tax payer £300k per year

Impact of the Savings

• Equalities– We have a legal duty to consider the impact the proposals might

have on people with protected characteristics. – We publish Equality Impact Assessments alongside the final

budget proposals.• Jobs

– We are the biggest employer in the county and wish to keep the number of compulsory redundancies to a minimum.

– Sadly, some of these proposals will result in a reduction in staff but we’ll do everything we can to keep these as low as possible; primarily through natural turnover.

Questions?

BUDGET 2017-18committeedocs.northumberland.gov.uk/MeetingDocs/25396_M... Copyright 2009...

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