A Vision for the next 5 Years

Wes LumleyChief Executive Officer

BDC Financial Strategy

Projection to 2017/18

£3,142,215

£2,333,532

£1,555,688

£777,844

£0

£2,090,433 £2,167,121 £2,246,654 £2,329,106£2,414,584

£0

£500,000

£1,000,000

£1,500,000

£2,000,000

£2,500,000

£3,000,000

£3,500,000

2013/14 2014/15 2015/16 2016/17 2017/18

BDC Financial Strategy

Loss in Grant

£298,688

£831,995

£598,311£695,392 £692,366

£3,116,752

£0

£500,000

£1,000,000

£1,500,000

£2,000,000

£2,500,000

£3,000,000

£3,500,000

2013/14 2014/15 2015/16 2016/17 2017/18 Totals

BDC Financial Strategy

• Strategic approach– Recognise future loss of RSG and make plans to

address fully– Effectively aim to be self financing (Council Tax and

Business Rates) – Will need to aim for significant growth:

• Business rates (20% to be retained by Authority)• New Homes Bonus (£1,000 per property for 6

years)– Continue to do more of the same +– Consideration of priorities

• To verify strategic thinking agreed to invite a LGA Peer Review

• Peer Review Focus – “Development of a sustainable financial strategy, with particular emphasis on economic growth in each district”

• Key areas of focus were:– Economic growth– Achieving further efficiencies

through the Strategic Alliance– Service Prioritisation

Peer Review

• Findings of Peer Review Team in respect of economic growth were:

– Develop a Growth Strategy– Reflect The Growth Strategies of the two LEPs– The Local Plan needs to reflect and take forward the

Growth Strategy – Develop and promote development and engage with

businesses to create interest for investment– More proactive account management with local

businesses

Economic Growth

• An application has been made to the LGA Economic Advisory Programme to develop an Economic Growth Strategy and to help us:

– Maximise leverage with LEPs– Develop a business facing culture – Successfully package and source finance for local

infrastructure development– Sustain existing and new business growth– Create better quality jobs– Enable us to unlock stalled residential sites which

have planning approval

Response

Growth Prospects

• Local Plan 2011 - 2031– Housing

• 300 new dwellings per annum (6,000 in total)– Employment Space

• 185ha over life of the plan

Growth Prospects - New Homes Bonus

• After latest Govt consultation likely to be an average of £800 per property for 6 years

• If achieve Local Plan (300 pa) - 300 x £800 = £240,000 each year for 6 years, a total of £1,440,000

• Over 5 years to 2017/18 this would raise some £1.3m

• Also applies to bringing empty properties back into use – there are some 900 in the district

• Additional properties also raise additional council tax – in the region of extra £30,000 each year

Growth Prospects – Business Rates

• Potential developments:– Lang O’Rourke– Sports Direct– U.D.G.– Morrisons/Tesco– Co-op Distribution Centre– East Midlands Designer Outlet

• These have the potential to generate an extra £3.5m in business rates which at 20% would provide over £700,000 for the Council

• This has already led to an extra £155,000 for the Council for the current year

Achieving further efficiencies through the Strategic Alliance• Findings of Peer Review Team in respect of

achieving further efficiencies through the Strategic Alliance were:

oA clear direction for the Strategic Alliance should be agreed and communicated to staff

oNo clear route map or forward plan – impacts on confidence of managers, staff and partners

oOrganic rather than strategic approach

oProcesses not changed causing inefficient duplication and frustration

Achieving further efficiencies through the Strategic Alliance

oLack of harmonisation of terms and conditions will become major barrier to further integration

oLack of capacity and ownership to drive through change and transformation

oBoth councils need to champion SA

oDevelopment of common policies and procedures would make managers more effective, speeding up decision making and avoiding duplication

Achieving further efficiencies through the Strategic Alliance

oFurther opportunities for joint working need to be explored and developed to improve customer satisfaction and provide savings

oCelebrate success and share learning

oConsider more public-public partnerships to help reduce back office costs

o Important that Bolsover invests the Transition/Efficiency Support Grant to transform services and deliver long term savings

Achieving further efficiencies through the Strategic Alliance

oTransformational model put forward by peer team:

Values / HR / T&Cs / policies

ICT - enabling

Agile working

Accommodation

Process re-engineering

Project management

Communication

Transformation Programme

• Visioning session held with two Cabinets/Executives facilitated by LGA:

– Findings considered and Transformational Programme model initially discussed

– Requested that CEO draws up proposals including:

• Appropriate management structure to reflect peer review findings

• Management structure to reflect requirement to further reduce senior management

• To take forward Transformation agenda

Response

Strategic Alliance – Management structure to reflect Peer Review

• Three Directorates:

• Growth – reflect Economic Growth Strategy and consist of growth related services such as Economic Development, Housing strategy, Planning and Environmental Health

• Transformation – reflect peer review transformational opportunities such as customer services, but does not preclude other services being subject to transformation

• Operations – largely reflect front line services such as Street Scene and Housing

Transformation Agenda• High volume transactional services such as

Customer services and Revenues and Benefits• Use of External Support through East Midlands

Council to look to harmonise terms and conditions and internal policies

• Use of Joint Scrutiny to examine potential for joint external policies in part or in whole

• Investigation of possible use of a Special Purpose Vehicle (SPV) to facilitate speedier resolution

• Annual savings potential of some £1,200,000 (Alliance) based on outcome elsewhere

• Will be need for upfront investment in people and technology £100,000 to £200,000

BDC Overall 5 Year Financial Impact

• New Homes Bonus - £1,300,000• Increased Business Rates - £700,000• Transformation Agenda - £600,000• Other initiatives

– Management Restructure - £150,000– Outturn Review - £250,000– Property Rationalisation - £100,000– Revenue Strategy - £50,000– Vacancy Management - £50,000

• Overall £3,200,000

BDC Overall 5 Year Financial Impact• Caveats:

– Budget versus grant reduction– Economic conditions

• will we achieve New Homes Bonus levels?– Complex calculation– History of completions

• Will there be business failures?

– One-off costs will be incurred– Govt policy?– Is there the will to achieve?

• If don’t take up this strategic approach what is the alternative?– Prioritising services to determine which will be cut– The Peer team said – “Likely to have to revisit commitment to

maintaining frontline service provision – prioritising key services”

Growth• Monitoring (Residential)

– Steady decline in net completions:•2008/09 – 243•2009/10 – 199•2010/11 – 203•2011/12 – 124•2012/13 – 120

Thank You