Baffins Neighbourhood Forum

Responding to the £56m BudgetShortfall 2013/14 to 2015/16

Chris Ward

Head of Finance & S151Officer

Introduction

• Revenue Budget – Expenditure & Funding

• Financial Background

• Budget 2012/13 (Current Year)

• Approaches to finding £27m (£56m cumulative) savings

• Key Considerations

Revenue Budget – Expenditure & Funding

• Sets out the City Council’s day to day expenditure and how it is funded

• Total expenditure (£570m) is funded by a mixture of:-– General Government Grants (Incl. Business Rates)– Specific Grants & Subsidies (Schools, HBens etc.)– Council Tax– Income from fees and charges– Contribution from Revenue Reserves

• Government requires Local Authorities to set a balanced budget each year

• Aim is that In-Year Expenditure equals In-Year Income

Financial Background

• Difficult economic climate – flat economic growth, rising unemployment, high public debt, falling real incomes

• 2013/14 – 3rd Year of 4 year programme of Public Sector cuts (30% for Local Government)

• Anticipating further cuts beyond 2014/15

• In addition:– Significant demographic pressures – ageing population and

pressure on Adult Social Care

– Expectations and risks surrounding Safeguarding Children

– Increasing demands – Housing, Council Tax Benefits, Inflation (Pay, energy etc.)

Financial Background• Council financial forecasts – next 3 years £27m of ongoing

savings or £56m cumulatively

• Council resolution Feb 12:

– £19m over 2013/14 to 2014/15

– A further £8m in 2015/16

• Current Year £7.8m savings made (£30m cumulatively over 3yr period) – almost entirely through efficiencies (minimal impact on services)

• Scope for future efficiencies more limited and service cuts inevitable

Financial Year 2013/14£m

2014/15£m

2015/16£m

Total

Year 1 10 10 10 30

Year 2 9 9 18

Year 3 8 8

Total 10 19 27 56

Budget 2012/13Portfolio Savings Pressures Change

£’000 £’000 £’000 %

Children & Education (983) 1,048 65 0.2

Culture Leisure & Sport (389) 49 (340) (3.4)

Community Safety (362) - (362) (9.7)

Environment (481) 354 (127) (1.0)

Health & Social Care (2,103) 264 (1,839) (3.4)

Housing (179) - (179) (8.5)

Leader (12) - (12) (3.8)

PRED (276) - (276) (6.6)

Resources (2,719) 10 (2,709) (10.5)

Traffic & Transportation (287) 201 (86) (0.6)

Other Expenditure etc (35) - (35) (7.6)

TOTAL (7,826) 1,926 (5,900) (3.8)

Finding £27m (£56m cumulatively)

• Approaches to applying savings to Services could be:

– Proportionate savings across all Services

– Proportionate savings but with some protection of Services to the Vulnerable (but Adults & Children’s Social Care consume circa half of the available budget)

– An alternative prioritised method of determining the incidence of savings across Services

Proportionate Savings - £27m (£56m)Portfolio Base Budget

2012/13£m

Savings £19m2013/14 – 14/15

£m

% Savings £8m2015/16

£m

%

Children & Education 33.2 4.3 13.0% 1.8 5.5%

Community Safety 3.3 0.4 13.0% 0.2 5.5%

Culture, Leisure & Sport 9.0 1.2 13.0% 0.5 5.5%

Environment 12.4 1.6 13.0% 0.7 5.5%

Health & Social Care 46.7 6.1 13.0% 2.5 5.5%

Housing 9.2 1.2 13.0% 0.5 5.5%

Leader 0.3 0.04 13.0% 0.02 5.5%

Planning & Regeneration 1.7 0.2 13.0% 0.1 5.5%

Resources 24.7 3.2 13.0% 1.4 5.5%

Traffic & Transport 5.2 0.7 13.0% 0.3 5.5%

Other (Uncontrollable / “One Off”)

50.8 0.0 0.0

Total 196.5 19.0 8.0

Key Issues for the Council• Continue to deliver and accelerate the Council’s efficiency

programme (Transformation)

• Reducing dependency on Central Government Funding (Council Tax, Income generation and charging for discretionary services)

• Influencing demand for services (e.g. Regeneration – homes and jobs) – manage costs

• Contract re-negotiation / consolidation

• Integration with Health – managing Social Care Costs

• Delivery via the 3rd Sector – Voluntary Services, Trusts

• Property rationalisation – save property costs

• Deciding which Service areas to make savings

Questions?

Budget 2012/13

£mGross Expenditure 569.495

Less: Gross Income (380.576)

188.919

Less: Government Grants (120.068)

Required from Council Tax 68.851

Divide by: Council Tax Base 59,916.1

Council Tax at Band D 2012/13 £1,149.12

Total Tax 2012/13 (Band D) 2011/12 2012/13

Increase

£ £ %

Portsmouth City Council 1,149.12 1,149.12 0.00

Hampshire Police Authority 146.25 146.25 0.00

Hampshire Fire & Rescue 61.38 61.38 0.00

Band D Property – Total 1,356.75 1,356.75 0.00

Tax for All BandsBand 2012/13

A £ 904.50

B £1,055.25

C £1,206.00

D £1,356.75

E £1,658.25

F £1,959.75

G £2,261.25

H £2,713.50

53% of households in Portsmouth pay the full Council Tax

22% of all households in Portsmouth receive Council Tax Benefit

87% of all households in Portsmouth are in Council Tax Bands A-C