Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
Agenda Item No______9_______
Proposed Savings Report - 2012/13 BASE BUDGET
Summary:
Conclusions:
The recent update of the Corporate Plan which was presented to
Cabinet in October 2011 was accompanied by an appendix entitled
‘Financial Plan Update 2011/12 – 2014/15, Strategic Context and
Organisational Workstreams’. This paper identified a projected
funding gap of £0.9 million for 2012/13 and just under £1.1m for
2013/14. This report provides an update on the progression of two of
the Council’s workstreams and identifies a number of savings and
additional income streams that will help to address the funding deficit.
This report provides a summary of progress to date in relation to the
two workstreams and identifies a number of new savings and
additional sources of income for 2012/13 onwards. These are
summarised below and additional details can be found within the
appendices that accompany the report.
The Revised Budget report for 2011/12 is included elsewhere on this
agenda and detailed work is still ongoing on the 2012/13 budget which
will be reported to Members in the new year. The recommendation
from this report is to note the progress on the workstreams and to
approve the savings and additional income identified for inclusion
within the 2012/13 Base Budget report.
Recommendations:
That Members agree and recommend to Full Council:
•
The savings and additional income as identified within Table 1
of the report
•
Note the updated position in relation to the management
structures and prioritisation workstreams
•
To fund any ‘one-off’ costs in relation to staff restructuring
through the use of the Restructuring and Invest to Save
Proposals reserve
•
A new reserve is established for the ‘New Homes Bonus’ and
that the allocation for 2012/13, estimated to be £595,700 is
transferred to this reserve
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
Cabinet member(s):
Ward(s) affected:
All
All
Duncan Ellis, 01263 516330,
Duncan.Ellis@north-norfolk.gov.uk
Contact Officer, telephone number,
and e-mail:
1.
Introduction
1.1
This report provides an update in relation to two of the Council’s workstreams which are
currently being progressed to identify future year savings for 2012/13 and 2013/14.
1.2
The recent update of the Corporate Plan which was presented to Cabinet in October
2011 was accompanied by an appendix entitled ‘Financial Plan Update 2011/12 –
2014/15, Strategic Context and Organisational Workstreams’. This paper identified a
funding gap of £0.9 million for 2012/13 and just under £1.1m for 2013/14. This report
provides an update on the progression of two of the Council’s workstreams and identifies
a number of savings and additional income streams that will help to address the funding
deficit.
1.3
The Revised Budget report for 2011/12 is included elsewhere on this agenda and has
been used to inform the high level forecasts included within this report. However the
detailed budget for 2012/13 along with the future projections are still being worked on
and the position will be reported to Members in February 2012.
1.4
As reported within the Financial Plan Update 2011/12 – 2014/15, Strategic Context and
Organisational Workstreams paper, the following workstreams are in progress, although
the focus for this paper is workstreams 1 and 2, while workstreams 3 and 5 are the
subject of a separate report elsewhere on this agenda:
•
•
•
•
•
Workstream 1: Management Structures
Workstream 2: Prioritisation exercise
Workstream 3: Shared Services/Outsourcing
Workstream 4: Asset rationalisation
Workstream 5: Partnership Working
1.5
A forward financial forecast can be found within section 3 of this report. This has been
updated for the savings and additional income proposed below whilst taking account of
the revised budget movements and other known adjustments.
2.
Service Savings
2.1
Part of the focus for Workstream 2 is exploring by service further savings that can be
achieved and/or additional income that can be raised either through fees and charges or
possibly trading services. Papers were issued to senior managers during August
requesting savings bids, or packages of bids, equivalent to a 10% reduction on their net
budget. This provided a potential package of savings of £1.3million for consideration by
Cabinet and to inform the service proritisation exercise carried out with CMT on 10
October in accordance with the agreed corporate planning timetable.
2.2
It is now proposed that the following savings are accepted for inclusion within the
2012/13 base budget (further detail in relation to the bids can be found within appendix
F).
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
Table 1 – Proposed savings and additional income 2012/13 onwards
Service Area
Community
Building Control (C1)
Conservation and Design (C2,C3)
Development Management (C7)
Planning Policy (C10,C11)
Planning Management & Community
Support (C12,C13)
Housing Services (C14)
Homelessness (C15)
Economic Development & Tourism
(C17 b)
Environment
Environmental Sustainability (E1)
Taxi Licensing (E2)
Environmental Health
(E3,E4,E5,E6,E23)
Civil Contingencies (E7)
Drainage Grants (E8)
Arts & Entertainments (E10,E13)
Museums (E12)
Other Parks & Open Spaces (E11)
Waste Disposal & Recycling
(E17,E19,E21)
Information
Members Costs (I3)
Legal Services (I4)
Information & Communication
Technology (ICT) (I6)
Telephony (I8)
Geographic Information System (GIS)
(I9)
ICT Applications (I11)
Resources
Markets (R3)
Industrial Estates (R4)
Administrative Buildings (R7 – see
income below also)
Windmill Restaurant (R8)
Property Services (R9)
Coast Protection (R13)
Community Transport (R18)
Performance Management (R19)
Performance management (R20)
Personnel & Payroll (R23)
Treasury Management (R25)
Central Costs (R26)
Corporate Management (R27)
2012/13
£
2013/14
£
2014/15
£
2015/16
£
(6,000)
(14,500)
(3,000)
(16,100)
(36,900)
(6,000)
(14,500)
(3,000)
(16,100)
(36,900)
(6,000)
(14,500)
(3,000)
(16,100)
(36,900)
(6,000)
(14,500)
(3,000)
(16,100)
(36,900)
(34,980)
(24,000)
(5,000)
(34,980)
(24,000)
(5,000)
(34,980)
(24,000)
(5,000)
(34,980)
(24,000)
(5,000)
(18,000)
(10,000)
(76,000)
(18,000)
(10,000)
(89,045)
(18,000)
(10,000)
(88,769)
(18,000)
(10,000)
(88,769)
(8,000)
(9,865)
(7,720)
(5,550)
(7,397)
(26,772)
(8,000)
(9,865)
(12,720)
(5,550)
(7,397)
(26,772)
(8,000)
(9,865)
(17,720)
(5,550)
(7,397)
(26,772)
(8,000)
(9,865)
(17,720)
(5,550)
(7,397)
(26,772)
(17,000)
(4,000)
(26,000)
(17,000)
(4,000)
(26,000)
(17,000)
(4,000)
(26,000)
(17,000)
(4,000)
(26,000)
(6,000)
(10,000)
(6,000)
(10,000)
(6,000)
(10,000)
(6,000)
(10,000)
(33,661)
(33,661)
(33,661)
(33,661)
(23,698)
(15,655)
(2,000)
(23,698)
(15,655)
(2,000)
(23,698)
(15,655)
(2,000)
(23,698)
(15,655)
(2,000)
(12,500)
(10,000)
(22,000)
(23,955)
(3,000)
(3,364)
(13,796)
(4,000)
(3,260)
(6,560)
(25,286)
(10,000)
(22,000)
(23,955)
(3,000)
(3,364)
(13,796)
(4,000)
(3,260)
(6,560)
(25,286)
(10,000)
(22,000)
(23,955)
(3,000)
(3,364)
(13,796)
(4,000)
(3,260)
(6,560)
(25,286)
(10,000)
(22,000)
(23,955)
(3,000)
(3,364)
(13,796)
(4,000)
(3,260)
(6,560)
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
Service Area
Democratic Representation &
Management (R28)
Accountancy (R29)
Internal Audit (R30)
Sundry Debtors and Creditors
(R31,R32)
Sub Total Savings
Additional Income/Grant:
Development Management New Fees
(C5,C6)
Land Charges Fee Increase (C9)
Street Naming & Numbering New Fees
(C9)
Homelessness (C16) Net Increase in
Bed & Breakfast Recoverable Charges
(C16)
Taxi Licensing Full Cost Recovery (E2)
Waste Disposal & Recycling (E18,E20)
Legal Services Externally Generated
Income (I2)
Car Parks Increased Charges (R1)
Rental Properties – Parklands 10%
Increased Rental (R5)
Administrative Buildings Increased
Service Charge for North Walsham
Offices (R6)
Administrative Buildings (R7 – see
saving above also)
Beach Huts & Chalets Increased
Charges (R10)
Revenues & Benefits Review of
Recoverable Subsidy (R15)
Revenues & Benefits Increased Court
Costs (R16)
2012/13
£
(4,400)
2013/14
£
(4,400)
2014/15
£
(4,400)
2015/16
£
(4,400)
(19,375)
(5,500)
(1,750)
(19,375)
(5,500)
(1,750)
(19,375)
(5,500)
(1,750)
(19,375)
(5,500)
(1,750)
(581,258)
(612,089) (616,813) (616,813)
(15,000)
(15,000)
(15,000)
(15,000)
(18,000)
(2,000)
(18,000)
(3,000)
(18,000)
(5,000)
(18,000)
(5,000)
(7,380)
(7,380)
(7,380)
(7,380)
(10,000)
(43,200)
(40,000)
(10,000)
(43,200)
(40,000)
(10,000)
(31,200)
(40,000)
(10,000)
(31,200)
(40,000)
(100,000)
(5,108)
(100,000) (100,000) (100,000)
(5,108)
(5,108)
(5,108)
(3,900)
(4,500)
(7,000)
(7,000)
(6,250)
0
0
0
(10,000)
(10,000)
(10,000)
(10,000)
(15,000)
(15,000)
(15,000)
(15,000)
(40,000)
(40,000)
(40,000)
(40,000)
Sub Total Additional Income/Grant
(315,838)
(311,188) (303,688) (303,688)
Total Savings/ Income
(897,096)
(923,277) (920,501) (920,501)
Please note that the reference after each service line corresponds to the bid reference
contained within appendix F.
2.3
Table 2 below provides further information of the proposed savings and additional
income analysed according to CIPFA’s recommended subjective groupings.
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
Table 2 - Proposed savings and additional income (subjective analysis)
Subjective Analysis
Employees
Premises
Transport
Supplies and Services
Income
2012/13
£
(187,298)
(75,247)
(35,529)
(322,736)
(276,286)
2013/14
2014/15
2015/16
£
£
£
(199,930) (199,930) (199,930)
(75,247)
(75,247)
(75,247)
(35,942)
(35,666)
(35,666)
(327,736) (332,736) (332,736)
(284,422) (276,922) (276,922)
Total
(897,096)
(923,277) (920,501) (920,501)
2.4
Cabinet are considering the future of the production and distribution of the Council’s
Outlook magazine. The intention is therefore to undertake a survey to gauge public
opinion in conjunction with the distribution of the December issue. If production and
distribution were to be ceased there would be additional savings of £26,000 per annum.
3.
Summary Financial Position
3.1
The table below shows the current estimate for this and future years and shows the
impact of the savings proposed above upon the funding gap, whilst taking into account
other known movements. However the detailed budget for 2012/13 along with the future
projections are still being worked on and this will be considered by Members for approval
in February alongside the setting of the council tax for 2012/13.
Table 3 – Updated Forecast 2011/12 to 2014/15
Revised
Budget
2011/12
£’000
Budget
12,766
Service budget movements
Fees and charges (Waste)
Additional income from MRF profit
share anticipated
Fees and charges (Planning)
Fees and charges (Leisure)
Additional homelessness grant
Benefits admin grant reduction less
than anticipated
Community safety posts - loss of
external contribution
Investment income
Prioritisation - Proposed savings
(12/13 onwards)
Management Structures
Updated base budget
12,766
Forecast Forecast Forecast
2012/13
2013/14
2014/15
£’000
£’000
£’000
13,094
12,961
13,388
(80)
(50)
(80)
(50)
0
0
20
30
0
(80)
20
30
(71)
0
20
30
(71)
0
10
10
10
111
(594)
86
(612)
(2)
(617)
(150)
(150)
(150)
12,311
12,144
12,608
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
Income from Council Tax payers
Income from Government Grants
Council Tax freeze grant
New freeze grant announced 05/10/11
Prioritisation - Proposed additional
income (12/13 onwards)
Transfer of 'New Homes Bonus'
Total income
Budget Gap
5,736
7,059
143
0
0
5,736
6,225
143
145
316
5,736
5,903
143
0
311
5,736
5,451
143
0
304
0
(200)
0
0
12,938
12,365
12,093
11,634
(172)
(54)
51
974
3.2
The budget projection, subject to the savings being proposed, now shows that a
balanced budget position is achievable for 2012/13 and 2013/14. However the 2013/14
budget is still subject to change following the Chancellors budget update and Local
Government finance settlement for 2013/14 and 2014/15, which will be announced next
year.
3.3
Included within the forecast budget for 2012/13 are savings related to pay and grading
and additionally savings in relation to car allowances from 2013/14 totaling £444,000,
and one-off costs in relation to this are budgeted to be met from the Organisational
Development reserve.
3.4
A report to Council in October 2011 recommended a revised process be followed for the
implementation of the revised pay model following the pay and grading review. It is
recommended that the surplus forecast for 2011/12 be allocated to the Organisational
Development reserve to offset any reduced savings in 2012/13 as a consequence of the
revised approach, and this recommendation is covered within the 2011/12 revised
budget report.
3.5
The 2012/13 budget assumes no use of the New Homes Bonus for which we are
expecting an allocation of £597,500. Our original forecast assumed £200,000 to support
the base budget in that year but this has now been removed to an earmarked reserve
which has been established for supporting communities which will see future growth and
development.
3.6
The Chancellor of the Exchequer announced in early October that a further grant would
be offered to those Authorities which freeze the Council Tax for 2012/13 at 2011/12
levels, but this grant was to be a ‘one-off grant’. This means the grant will not be paid in
future years (i.e. 2013/14 and 2014/15), so it differs from the Council Tax Freeze Grant
for 2011/12 which will continue to be paid in 2012/13, 2013/14 and 2014/15.
3.7
The general reserve is held as a contingency to cushion the impact of unexpected
events or emergencies and uneven cashflows between financial years. The balance on
the General Fund reserve as at the 31 March 2012 is estimated to be £1,829,00. Current
budget projections assume a contribution from this reserve to help support the base
budget of £200,000 in 2012/13, £200,000 in 2013/14 and a further £100,000 in 2014/15
which will leave an anticipated balance of £1,329,000 as at 31 March 2015 against a
recommended minimum level of £950,000.
3.8
The updated capital programme is provided as an appendix to the 2011/12 Revised
Budget report which can be found elsewhere on this agenda. The housing capital
programme is to be updated in line with the new Housing Strategy which is being
prepared for adoption in February 2012. Any changes required to the housing capital
programme will therefore be reflected within the 2012/13 base budget report.
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
4.
Workstream Update
Workstream 1 - Management Structures
4.1
A consultation paper has been issued to the Corporate Management Team outlining a
proposed new structure to be operational from 2012/13 which will see the size of the
management team reduced from five to three. It is anticipated that this restructure,
combined with a reconfiguration of the Senior Management Team, will look to save an
estimated £150,000
4.2
The precise saving will be included once the restructure is complete however at this
stage a saving of £150,000orporated within the budget figures. A report on management
arrangements is being prepared for the Council meeting in December and follows a
period of consultation with those members of staff directly affected.
Workstream 2 – Prioritisation exercise
4.3
In reviewing the current base budget and identifying savings for 2012/13, Cabinet has
requested that further work is carried out in a number of areas with a view to identifying
savings or additional income for 2013/14 and beyond. The Council also awaits further
guidance from government in a number of areas which may assist future year budgets.
4.4
The following work is being carried out in support of future year budgets:
a)
Building Control Partnership – no savings are included within the 2012/13 budget
however the Council is in discussion with the CNC partnership which operates
across much of Norfolk and includes Norwich City Council, Broadland, South
Norfolk and latterly King’s Lynn and West Norfolk, with a view to possibly joining.
This is subject to a business case which will be considered by Cabinet early next
year.
b)
Planning fee income – The majority of fees and charges for the planning services
are set nationally by central government. A proposal by the coalition government
contained within the ‘Proposals for changes to planning application fees in
England’ consultation document recommended that planning fees should be set
at a level which enables the cost of the service to break even and therefore self
financing. Currently the net cost of development control is £638,000 and
therefore such a move could potentially generate a significant increase in fee
income. The initial consultation document was issued in November 2010 and the
Council awaits further detail as to how or whether this proposal is to be taken
forward.
c)
Shared Services – the Council is exploring a shared arrangement with King’s
Lynn and West Norfolk in two service areas, revenues and benefits and
environmental services. The revenues and benefits service shared arrangements
involves the procurement of a new ICT system and is forecast to deliver saving of
£0.5million between the two Councils from 2013/14. Irrespective of if the shared
arrangement goes ahead, the new back office system for processing revenues
and benefits will deliver savings to the service of approximately £75,000 per
annum. The Council is at early stages of discussing the potential benefits of a
shared management arrangement for environmental services.
d)
Recycling – the contract for recycling is due to be renewed during the next 2
years and it is anticipated, based upon current market knowledge, that there will
be additional income of at least £100,000 per annum.
Cabinet
28 November 2011
Overview & Scrutiny Committee
13 December 2011
e)
Asset Reviews – a reconstituted Asset Management Board has been established
to review existing asset holdings with a view to identifying both revenue and
capital savings from 2013/14 onwards. A revised strategy is being prepared
alongside the Council’s approach to Localism. Where appropriate different
governance arrangements will be considered for managing assets including the
establishment of Development Trusts.
f)
Grounds maintenance and Cleansing Contract – as this contract becomes
established the Council will continue to work with the contractor Kier to explore
further efficiencies and savings within the contract. This work is linked to the
review of assets above.
g)
Strategic Review of Customer Services and Tourist Information Centres – there is
an ongoing commitment to supporting tourist information services within North
Norfolk, however, Cabinet wish to explore different delivery models in partnership
with Town Councils and other interested bodies. The drive for improved access
and efficiency will be the key drivers for this piece of work which will be carried
out during 2012/13.
h)
CCTV – a fundamental review of this service has been requested. It currently
costs £173,000 per annum, net of contributions to run this operation. The gross
cost is £195,000. The aim would be to review its effectiveness and consider
different operational delivery models that would reduce the cost and increase
contributions.
4.5
Further work has also been requested in relation to elements of the property services
function including the cost of managing the beach huts, which will be the subject of a
more detailed report.
4.6
Together, these workstreams will support our approach to Localism as well as driving
forward our efficiency agenda. They complement other changes that Cabinet has
instigated including the review of the most senior management arrangements as outlined
above.
5.
Recommendations
5.1
That Members agree and recommend to Full Council:
•
The savings and additional income as identified within Table 1 of the report
•
Note the updated position in relation to the management structures and
prioritisation workstreams
•
To fund any ‘one-off’ costs in relation to staff restructuring through the use of the
Restructuring and Invest to Save Proposals reserve
•
A new reserve is established for the ‘New Homes Bonus’ and that the allocation
for 2012/13, estimated to be £595,700 is transferred to this reserve