Cabinet Budget Proposals 2014/15

Vicki PalazonFinancial Services Manager

We remain committed to:-• Growth, regeneration and economic development of the city

to bring new investment and jobs• Improved educational attainment and skills for our children

and young people including investing in the multi-university approach

• Safeguarding children and vulnerable adults• Environment Capital agenda including pursuing new income

streams from solar energy and wind farm developments• Supporting our Culture and Leisure Trust to continue to

deliver our culture, arts and sport in the city• Keeping our communities safe and cohesive

City achievements – just a sample

• GCSE results which were sixth most improved in the country

• National recognition for response to child sexual exploitation case

• attracting new investment into the city - creating 3,500 jobs

• one of the lowest shop vacancy rates in the country (9%) compared to a national average of 14%

Settlement 2014/15 and 2015/16• 2014/15

– Grant will be £9m less previous year– roughly £1m worse than expected when budget planning

started• 2015/16

– Grant will be £12.5m less previous year– roughly £11.5m worse than expected when budget planning

started– Local Welfare Reform grant £0.8m…..

• Overall reduction of nearly 40% (£44m) across 5 years

Pressures• Looked after children (£1m)• Government changes to provision for adults with learning

disabilities in residential care (£945k)• Homelessness B&B costs (£150k)• Special school transport (£164k)• Government changes to funding of long term Social care

(£319k from 2015/16)• Welfare reform – responding to loss of Disability Living

Allowance in adult social care (£108k)

Capital Investment on key projects• Extra care provision• Disabled Facilities Grant• Repairs Assistance• Roads, including junction 17 of A1m to junction 2 of

Fletton Parkway and Bourges Boulevard• Continuation of public realm, inc. Long Causeway• Affordable Housing - £12.8m over 2 years • Schools - £45m over 2 years for new places• Renewables – income built into future years budgets

Scale of the financial challenge• Summary position for 2014/15:

– Grant reduction of £9m– Financial pressures of £10m– Overall budget gap of nearly £19m

• Gap increases in 2015/16:– Grant reduction of £12.5m– Financial pressures of £4m– Budget gap increases by £16.5m

  2014/15 2015/16 2016/17 2017/18 2018/19£m £m £m £m £m

Budget Gap - cumulative -18.6 -35.1 -38.3 -40.0 -42.3

Budget Gap - annual change   -16.5 -3.2 -1.7 -2.3

Meeting the financial challenge

  2014/15 2015/16 2016/17 2017/18 2018/19£m £m £m £m £m

Revised Budget Gap -18.6 -35.1 -38.3 -40.0 -42.3Council Tax + Other funding 2.3 1.0 -0.6 -0.9 -1.2

Efficiency 12.8 12.1 11.7 11.7 11.1

Service Reductions 2.7 3.1 3.1 3.1 3.1

Additional Income 0.5 0.5 0.5 0.5 0.5

Terms and Conditions 0.3 0.6 1.1 1.7 2.3

 MTFS Position 0.0 -17.8 -22.5 -23.8 -26.5

Efficiencies• ASC transformation and personalisation (£637k)• Reduced costs of looked after children (£245k increasing to

£1.2m)• Public Health - Savings on drug treatment and benefits from

joining services to use grant more effectively (£1.1m)• Office accommodation and property (£673k)• Serco partnership and business support (£775k)• ICT projects and support (£602k)• Vivacity (£330k)• Youth offending (£50k)

Service Reductions (1) • Communities

– Childrens centres (£1.18m in a full year)• Adult Social Care

– Further savings from previously agreed policy changes (£200k)– Review ‘support cost estimate’ (personal budgets) - (£125k)– Review respite policy (£150k)– Review older peoples day services (£150k)– Service User transport (£175k)– Day opportunities for adults under 65 with learning disabilities

(£400k)• Education

– Special school transport (£60k)

Service Reductions (2)• Governance:

– Community Leadership Fund – reduce to £1k per councillor (£183k)• Resources

– Remove remaining discretionary funding from parish councils from 2015/16 (£101k)

– Sports club caretaker, grass cutting, shrub & flower bedding, play area inspection, WEEE facility (£262k)

– Introduce charge for garden waste collection (£804k)• Equalities Impact Assessments developed

Council Tax (1)• One of lowest council tax levels in the country• Previously approved Budget assumed 2% per annum

increase (i.e. at current referendum limit threshold)• Proposals put forward are on the following basis:

– 2014/15 - Council Tax frozen– 2015/16 - Council Tax frozen

• Lose freeze grant if we increase. Potential impact:– 2% increase costs taxpayers roughly £1.2m– Grant loss around £0.7m– Net benefit around £0.5m

Council Tax (2)• Council tax benefit scheme kept at 30% reduction

(approved by Council – not part of budget proposals).– Otherwise extra £2m of savings

Reserves, balances and risk

• £6 million working balance is maintained• Capacity building reserve – low• Tight financial control even more important• Key risks:

– Business rate retention – impact if Government growth targets are not hit, appeals etc

– Savings plans– Council tax benefit

ReservesEstimated balance at

31.04.14£k

Estimated balance at

31.04.15£k

Earmarked reservesDepartmental reserve – The majority of this reserve relates to City College Peterborough who operate on academic year funding and retain a reserve for potential claw back from awarding bodies 632 508

Schools capital expenditure reserve - Monies held on behalf of schools for capital spend 381 381

Insurance and other minor reserves – These reserves are held for a specific purpose and cannot therefore be used for budget setting purposes 3,350 3,259

TOTAL earmarked reserves for specific purposes 4,363 4,148General fund – Set aside to meet unforeseen issues and risks 6,000 6,000

Capacity building reserve – This enables us to implement saving proposals 2,746 1,483

Next steps• Monday 24th February - Cabinet (make recommendation

to Council on the budget) • Friday 28th February (10.00am) – Substantial budget

amendment / alternative budget• Wednesday 5th March (noon) – Minor budget amendment• Wednesday 5th March – Full Council agree budget