Balancing the Budget ough Challenges Ahead

Below is a News Release from Huntingdonshire District Council about the coming cuts. We all pretty much knew that cuts to Council budgets were on there way after this weeks budget announcements by the Chancellor George Osborne. I have included the full news release and the accompanying statement as I didn't want to put my interpretation on it.

The first steps towards setting its budget for the coming yearare being taken by Huntingdonshire District Council, and there will be tough challenges ahead, members were told at last night’s meeting of the full council.

A day after the coalition government announced its emergency budget, which could mean a reduction in grant of up to 35 per cent, the council outlined its proposals and the need to identify savings. In order to balance its books over the coming three years the council has identified that it needs to find at least £5 millions, either in savings or by generating income.

A statement given to councillors last night by the leader of the council, Councillor Ian Bates, sets out ways in which the target may be reached, but over the coming weeks the council will be consulting widely with residents, partners, employees and local businesses to establish their views and suggestions on the level and type of services they require.

Councillor Bates told colleagues: “The coalition government is faced with the worst economic inheritance ever and we have to play our part and identify savings that can be met from within our own organisation.

“Our capital spending over the last few years has been remarkable and has benefited this district greatly. But we are now in a position whereby we will have to make tough decisions, although it is our aim to continue to provide good quality services for our district.”

 

Tough times: Tough decisions

Budget Proposals

Introduction

Huntingdonshire District Council has an enviable record of delivering high quality services while achieving value for money for its residents. A number of factors contribute to this success, including:-

• Sound Leadership

• Good financial management

• Dedicated staff who want to give the best possible service

• Partnership working for what is best for our community

Because of these and other good practices, we have been able to maintain a low level of Council Tax.

However we are not immune from the national pressures and, as I am sure that you are all well aware, the country is facing tremendously difficult financial decisions.

The Coalition Government is faced with the worst economic inheritance ever and £6.2 billion of cuts have been found immediately, £1.66 billion has to come from local government. Yesterday the government signalled its intention to make further significant cuts in government expenditure amounting to 73% of their deficit reductions. We will learn more about these on 20th October, but we are told to expect a real cut of 35% in our grant.

Signals from Whitehall tell us that grants and subsidies will feel the brunt of the first cuts.

It should be noted here that, at present, less than 10% of our funding is raised from council tax receipts.

We have already identified and implemented cost improvements in areas such as refuse collection and recycling (£381k), public conveniences, planning (£148k), community services (£219k), leisure services, Community Safety (£397k), and back office costs (£506k), amongst other savings.

But prudence tells us to plan for the worst case and identify savings that can be made within our own organisation.

Before we proceed with our proposed plans we would like to address one issue: our capital spending over the last few years for the benefit of Huntingdonshire has been remarkable. In total we have invested £143m over the last 11 years. This includes - £36m in housing; £18m in the environment, including refuse collection; £16m in health facilities; £12m in highways and transport; £13m in leisure centres; £5m in parks; and £5m in economic development projects. Which brings us on to the question of our Headquarters building ..

As you are aware, the old Pathfinder House didn’t have good facilities for customers – not DDA compliant - and would have been in a state of critical decay by 2010. A refurbishment programme would have cost in the region of £17m.

The new build has cost £18.375m and has a long lifespan. It provides top class customer facilities, excellent environmental standards, a flexible and marketable building, and a better working environment.

This was a sound financial and operational decision to spend in order to save in the longer term.

And so to our proposals: while our objectives are demanding, we believe we can achieve them and provide a successful outcome – continuing to provide good quality services for our District.

To help achieve our objectives we will undertake a broad and in-depth consultation exercise over the next 3 months with residents and employees of where they believe the areas for potential savings could be found.

And so on to our objectives

Our 3 year Objective is to achieve £5 million savings, to protect front line services wherever possible and to maintain statutory services with a level of commitment that is within our budgetary constraints.

These include -

• Council Tax - To help achieve our three year objective, we will seek to increase Council Tax, currently the 20th lowest of 201 Districts in the country, to the national average. The current Government proposals are for a one year freeze with an option for year 2. Therefore, this revenue stream may be available in years 2 and/or year 3.

Potential New Income - £2.6 million

• Capital Programmes – These, after a review, have been halted. We will consider reinstatement and new schemes as soon as possible when we are prudently able to do so. Capital schemes may be largely dependent upon government grant and, where self funding, an assessment of their likely economic viability.

Potential Saving £1 – 3m

• Rationalisation of Chief Officers & Senior Management – We would seek to achieve this by even more efficiencies.

Potential Saving £350,000

• Rationalisation of staff – A reduction of posts over 3 years by staff rationalisation on a voluntary basis. Most of this will be through natural wastage, such as a freeze on recruitment, early retirements and voluntary redundancies, but it may be necessary to make posts redundant at the end of the day.

Potential saving £1.5 million

• Remuneration - A comprehensive review of the Council’s pay system will be undertaken as soon as possible.

Potential Saving £250,000

• Shared Services – We want to build on recent successes in a number of areas of sharing services and costs with other Authorities.

Potential Saving £250,000

• Leisure – Leisure Centres in particular have made a significant contribution recently to our savings targets. We will look to achieve further savings in this area by improving attendances at Centres alongside establishing greater efficiencies and a realignment of services and facilities.

Potential Saving £500,000

• Sundry Efficiency Ideas – Council Officers already have a proven track record in bringing forward savings and efficiency ideas, and we are confident they can bring forward further savings.

Potential Saving £150,000

• Government Grants – We as an authority have been successful in obtaining reward grant funding in the past. We will look to continue with this. However, we anticipate that pot being significantly reduced.

Potential Income £200,000

• Increased charges – After public consultation on the level and type of services our residents require, charges will have to be reviewed. If by year 3 we are unable to gain further funding via Council Tax, these may be affected further.

Potential Income £250,000

• Reshaping of services – We have identified already a number of areas where reshaping of the services may result in savings. These are being worked on and will form part of our consultation

Potential Saving £950,000

Consultancy – Will be reviewed to ensure best value for money. In the past we have recruited specialist expertise where this has been in the best interests of the District. We will continue to do so, where justified, and particularly where these are under threat from development proposals, or to influence projects (such as the A14). Further, we now expect major projects to reduce substantially and therefore lessen the need for outside help.

Potential Saving £200,000

Localism – We share the view of the Coalition Government that working with service users and communities will provide better, and in many cases, cheaper services. We will seek dialogue with Town and Parish Councils, the voluntary sector and other groups and communities so as to extend partnership working and to transfer services that are best served at a more local level.

Potential Saving £50,000

In conclusion, as said previously, these objectives are challenging, but they are realistic and achievable. In common with all Councils in the country, reshaping, reorganisation and smarter ways of working will be necessary in these demanding financial times. These proposals will form the basis of an extensive consultation process. We are in a better position than many Councils, and have always provided value for money. The challenges will be tough, but we will rise to them and continue to provide good quality public services.