BUDGET CONSULTATION
2005-06
LOCAL GOVERNMENT FINANCE
CONTENTS
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•
•
•
•
•
2004/05 Revenue Budget Analysis
Council Tax
Future Developments in Local Government Finance
2005/06 Revenue Budget Initial Projection
Key points from the Quality of Life Survey
Your priorities and views
REVENUE BUDGET 2004-05
Service
Expenditure
Income
Net
Education & Leisure
168
23
145
Community & Social Services
125
50
75
Housing
169
168
1
Development Services
40
14
26
Environmental Services
16
4
12
Corporate Services
52
29
23
Chief Executive
15
8
7
Capital Financing
22
1
21
-29
1
-30
578
298
280
Accounting adjustments
Total
REVENUE BUDGET 2004-05
£m
Gross Expenditure on Services
578
Less Income
298
Net Expenditure
280
Funded from:
Revenue Support Grant
53.5%
150
Business Rates
21.5%
60
Council Tax
25.0%
70
Total
280
SALFORD’S REVENUE BUDGET 2004/05
Sources of Funding
• Revenue Support Grant (RSG) £149.9m (53.5%)
Direct grant from Government based on their Formula Spending Share
(FSS) for each local authority
FSS less Council Tax for FSS less Business Rates = RSG
• Business Rates £60.4m (21.5%)
Money collected from businesses which is recycled to local authorities
according to population - also known as National Non Domestic Rates
(NNDR)
• Council Tax £70.1m (25%)
Local tax on residential property
The ‘Gearing’ Effect - Impact on the level of Council
Tax at varying budget levels
% Increase in Council Tax
£M
£M
%
20
Increase
Current Budget
280.4 283.2
1
Funded by
10
Government
210.3
210.3
0
Council Tax
70.1
72.9
4
0
1%
3%
5%
Increase in Budget
COUNCIL TAX
Banding and Taxation Details
Band
Value
Tax
Proportion
2004/05
Proportion
Council Tax
of properties
£
%
A minus disabled < £40,000
5/9
714.03
0.08
A
< £40,000
6/9
856.84
54.79
B
£40,001 - £52,000
7/9
999.65
18.95
C
£52,001 - £68,000
8/9
1,142.45
14.41
D
£68,001 - £88,000
1
1,285.26
6.30
E
£88,001 - £120,000
11/9
1,570.87
3.12
F
£120,001 - £160,000
13/9
1,856.49
1.38
G
£160,001 - £320,000
15/9
2,142.10
0.90
H
> £320,000
2
2,570.52
0.07
Discounts : 25% single persons, 50% empty property, 100% students
Disabled reduction - next band down
Band D tax = 28th highest ; Average tax £832 = 307th of 354 LAs
Comparison of Council Tax Levels - GM Authorities
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£1,200
£1,000
£800
£600
£400
£200
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Average per Dwelling
Band D Council Tax
Future developments impacting on the City Council’s
Budget Strategy
Balance of Funding Review
• Reform of Council Tax
• providing LAs with increased flexibility to raise additional revenue
• options for other forms of LA revenue - local income tax, reform of NNDR
• implications for financing of possible elected regional assemblies
Governments Comprehensive Spending Review
• Anticipated increase in Local Government expenditure 5.8%, 5.5% &
5.1% 2005/06 to 2007/08
• Increase in Government support (RSG & NNDR) 5.4%, 5.5% & 5.1%
• Predicted Council Tax increases of 6.7%, 5.5% & 5.1%
• Local Authorities to identify 2.5% p.a.efficiency savings
Gershon Efficiency Review
• Identifies potential areas for public sector efficiency savings
• £6.45bn savings in Local Government - up to 15,000 jobs
BUDGET AND RSG PROJECTIONS 2005-06
£m
Projection of net expenditure on current level of service
298.7
Initial indication of Government Grants:
Revenue Support Grant
158.0
Business Rates
63.7
Amount to be met from Council Tax
76.9
2004-05 Council Tax increased by 3%
73.1
Funding Gap
3.8
Options to bridge the Funding Gap
• Efficiencies
• Cuts in service
• Increasing Council Tax
Other Considerations:
• RSG Settlement
• Service expenditure forecasts
• Service priorities
• Consultation outcomes
What residents said in 2003/04 Quality of Life Survey
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•
•
61% of respondents are satisfied with their neighbourhood as a place to
live (86% is the national average)
39% feel that their neighbourhood has got worse – mainly because of
crime issues.
Key Issues in making Salford a great place to live
–
–
–
–
•
•
53% crime reduction
34% cleaner environment
21% improved leisure facilities
19%better job opportunities
54% are satisfied with the way the City Council runs things
– 71% satisfied (highest) with bin emptying service
– 58% consumer protection
– 58% Education and Schools
What has got worse
– 40% increase in crime
– 22% more youth disturbance
What are your views and your options?
Stage 1 Consultation – November/December 2004
• What services matter most to you?
• Would you increase or reduce service levels - in what service areas ?
• Would an above inflation increase in Council Tax be acceptable with
increased service levels?
• Are you for tax cutting measures that impact on public services?
• Can you identify areas to improve the efficiency of Council services.
Stage 2 Consultation - January 2005
• Budget update e.g. resources, expenditure projection etc.
• Feedback
• Consideration of refined budget options