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BUDGET BOOK AND

FINANCIAL INFORMATION

2017/18

March 2017

WIRRAL COUNCIL

BUDGET BOOK AND FINANCIAL INFORMATION 2017/18 INTRODUCTION REVENUE BUDGET - BUDGET PAGES Council Wide Overall Revenue Budget Budgets (Income and Expense) by Wirral Plan Theme People Environment Business REVENUE BUDGET –FURTHER FINANCIAL INFORMATION Revenue Savings 2017/18 Revenue Budget Contingency 2017/18 Revenue Growth 2017/18 Government Funding 2017/18 Chief Financial Officer Statement for 2017/18 Level of General Fund Balances Level of Earmarked Reserves Council Tax Information Business Rate Information Collection Fund Support, Management and Buildings Recharge Basis 2017/18 Fees and Charges CAPITAL PROGRAMME 2017/18-2019/20 SCHOOLS BUDGET MEDIUM TERM FINANCIAL STRATEGY 2017/18-2021/22

INTRODUCTION The annual Council Budget is an integral part of the overall financial management of the Council. The budget has to be agreed, and Council Tax levels set for the following financial year by the 10 March each year. This document provides details of Wirral Council’s Revenue and Capital Budget for 2017/18. It contains a summary of the budget agreed by Cabinet on 20 February 2017 and Council 6 March 2017, further information regarding funding, general fund balances, earmarked reserves and how the Council Tax is set. The book comprises of a number of separate items including: • Revenue Budgets: Funding of day-to-day spend on Council Services

and the main components of each Wirral Plan theme. • Capital Programme: Planned expenditure and funding of the purchase,

upgrading or improvement of assets such as buildings and roads. • Schools Budget: Funding for Wirral schools. • Medium Term Financial Strategy: An overview of the Councils

Finances over the medium term.

BUDGET RESPONSIBILITIES The Assistant Director: Finance (Section 151) has a number of statutory responsibilities in relation to agreeing the Budget that can be summarised as: 1. Ensure that the Council has set a balanced budget under the Local

Government Finance Act 1992. 2. Produce a written report on the robustness of the estimates, adequacy

of reserves and impact upon future years budgets’ under the Local Government Act 2003.

3. Ensure that, as Assistant Director: Finance (Section 151), there are adequate resources for the proper administration of the financial affairs of the Council under the Local Government Act 1972.

4. Under the Prudential Code for Capital Finance in Local Authorities 2011 to ensure the funding of capital expenditure is affordable.

BUDGET BOOK AND FORECASTS This document provides details of the budget for 2017/18 together with the key supporting information used in setting the Budget. The information contained within this document is to help with understanding the Council’s Budget for the forthcoming year.

REVENUE BUDGET

BUDGET PAGES

Council Wide Overall Revenue Budget Budgets (Income and Expense) by Wirral Plan Theme People Environment Business The Budget Book 2017/18 shows the day-to-day spending by Council Wirral Plan Themes and service area.

Council Wide Overall Revenue Budget The Revenue Budgets have been compiled in accordance with the Budget 2017/18 agreed by Council on 6 March 2017 for which the Budget Resolution provides the detail and shows the integration with the Wirral Plan, the Medium Term Financial Strategy. Further Financial Information is contained in further section of this book. The Budgets are presented based upon the three Wirral Plan Themes which are then broken down into the supporting service areas. The details contained in this section of the budget book are presented in two ways. The first is subjectively; with expenses and income broken down by type of expenses or income. The categorisation is further explained below. Income

Expense

The second presentation of data is objectively which is based around Theme expenditure and then broken down into services that support the theme areas.

Government Grants Grants received from central government. Customer and Client Receipts Income from sales, fees and charges for services. Other Grants and Reimbursements Other grants and contributions received from external

organisations. Interest Interest received from investments. Other Sources Internal income from other entities such as schools and

pension fund. Recharge - Other Revenue Accounts/Support, Management and Buildings

An internal charge where one Directorate has performed a service and this is reimbursed by the receiving Directorate.

Recharge – Non Revenue Accounts Reimbursement from other funds.

Financing Income related to the capital programme and accounting for non-current assets.

Employees Pay related items such as salaries.

Premises Buildings related items such as fuel, repairs and maintenance and rates.

Transport Vehicle and travel costs such as transport contracts. Supplies and Services General expense such as printing, equipment.

Third Party Payments Payments made to other organisations for services carried out on behalf of the Council.

Transfer Payments Payments made on the behalf of others such as housing benefits.

Recharge - Other Revenue Accounts/Support, Management and Buildings

An internal charge where one Directorate has performed a service and this is reimbursed by the receiving Directorate.

Financing Expenses related to the capital programme and accounting for non-current assets.

COUNCIL WIDE BUDGET BY THEME

FORECAST INCOME 2017-18

Pilot Scheme Business Rates -67,941,000

Top Up -51,842,000

Business Rates Section 31 Grants -6,460,000

Council Tax Requirement -127,430,400

New Homes Bonus -2,264,100

Contribution to Business Rates Reserve 5,373,400

Contribution from balances & Reserves -15,718,300

FORECAST INCOME -266,282,400

FORECAST EXPENDITURE

Total

People

Adult Care 75,509,300

Children & Families 62,158,900

Children & Families - Schools 18,456,700

Public Health 0

People Total 156,124,900

Environment

Environmental Protection 27,828,200

Housing & Communities 15,877,150

Leisure & Culture 17,013,800

Environment Total 60,719,150

Business

Business & Tourism 2,832,700

Transformation & Improvement 1,729,600

Transport, Technology & Infrastructure 33,031,300

Business Total 37,593,600

Resources

Resources -155,250

Childrens Contingency 5,000,000

Adults Contingency 5,400,000

Other Contingency 1,600,000

Resources Total 11,844,750

Grand Total 266,282,400

Wirral Council Budget Book 2017-18

COUNCIL WIDE BUDGET BY INCOME AND EXPENSE

Total

Income

Government Grants -458,294,600

Customer and Client Receipts -52,049,200

Other Grants and Reimbursements -56,192,600

Interest -870,000

Other Sources -18,644,400

Recharge - Other Revenue Accounts -14,287,600

Recharge - Support, Management and Buildings -33,140,000

Recharge - Non Revenue Accounts -12,951,300

Financing -29,728,800

Income Total -676,158,500

Expense

Employees 136,081,700

Premises 17,858,400

Transport 6,897,800

Supplies and Services 159,804,600

Third Party Payments 357,078,900

Transfer Payments 160,317,900

Recharge - Other Revenue Accounts 14,268,600

Recharge - Support, Management and Buildings 33,140,000

Financing 56,993,000

Expense Total 942,440,900

Grand Total 266,282,400


TotalPeople

Adult CareIncome

Government Grants -2,378,500Customer and Client Receipts -20,911,800Recharge - Support, Management and Buildings 0Other Grants and Reimbursements -30,217,500Recharge - Other Revenue Accounts -267,900


ExpenseEmployees 17,606,400Premises 221,300Transport 306,400Supplies and Services 97,123,800Third Party Payments 9,409,500Transfer Payments 104,500Recharge - Support, Management and Buildings 2,645,400Recharge - Other Revenue Accounts 1,430,800Financing 436,900


Adult Care Total 75,509,300


TotalPeople

Adult CareBirkenhead / South Wirral Locality 16,113,700Commissioning & Transformation - Health & Care 964,100Day Services 5,389,000Delivery - Adult & Disability 497,000Independence 2,368,300Integrated Disability Service 26,040,700Integrated Health Provision 9,147,300Mental Health Services 51,000Professional Standards 77,600Residential and Short Breaks - Adult & Disability 774,700Social Enterprises 75,200Wallasey / West Wirral Locality 13,474,600Knowledge Management 63,500Market Transformation & Contracts 472,600

Adult Care Total 75,509,300


Total


Children & FamiliesIncome

Government Grants -2,960,600Customer and Client Receipts -185,400Recharge - Support, Management and Buildings 0Other Grants and Reimbursements -881,100Other Sources -1,337,300Recharge - Other Revenue Accounts -1,566,200Recharge - Non Revenue Accounts -10,000,000


ExpenseEmployees 39,718,300Premises 630,300Transport 4,140,900Supplies and Services 23,080,800Third Party Payments 3,844,500Transfer Payments 90,600Recharge - Support, Management and Buildings 6,178,500Recharge - Other Revenue Accounts 1,348,000Financing 57,600


Children & Families Total 62,158,900

Total


Children & FamiliesAdolescent Support Team 501,500Adoption & Permanence Service 736,600Adults Safeguarding 456,300Careers Education Information and Guidance 1,336,700Childrens Centres 2,777,900Childrens Safeguarding and Local Safeguarding Children's Board 1,738,300Children's Social Work Services 10,397,500Children's Trust, Partnership & Commissioning 2,002,700Department Management and Support 1,161,200Educational Psychologists 832,300Family Intervention 1,016,500Fostering Service 1,125,800Gateway 218,600Integrated Transport 5,247,800LAC Commissioned Services 19,416,800Looked after Children's Education Service 164,100Multi Cultural Centre 43,100Post 16 Allowances 310,400Quality, Performance & Improvement 1,804,800Regulation - Childrens 2,723,900Safer Communities 422,900School Attendance Management 363,300School Improvement 256,800School Traded Services -368,500SEN Assessments 386,700Services for Children with Disabilities 3,297,200Wirral Lifelong Learning & Family Service -24,800Youth & Play - Targeted 1,467,800Youth & Play - Universal 761,800Youth Offending 1,582,900

Children & Families Total 62,158,900

Total


Children & Families - SchoolsIncome

Government Grants -274,046,700Customer and Client Receipts 0Other Grants and Reimbursements -5,400,200Other Sources -6,838,400Interest 0Recharge - Other Revenue Accounts 0


ExpenseEmployees 5,809,500Premises 1,953,300Transport 43,800Supplies and Services 13,055,200Third Party Payments 249,608,700Transfer Payments 18,586,600Recharge - Support, Management and Buildings 319,000Recharge - Other Revenue Accounts 309,200Financing 15,056,700


Children & Families - Schools Total 18,456,700

Total


Children & Families - SchoolsAdmissions 341,800Bases 2,398,300Behaviour Support 84,200Capitalised Expenditure From Revenue 736,500City Learning Centres 68,500Contributions to Combined Budgets 671,100Debt Management - Childrens 14,591,700Dedicated School Grant -251,364,100Early Years 518,700Early Years Funding 18,888,200Insurances 29,200Library Service 191,700Licences & Subscriptions 226,100Milk & Meals - Schools 19,700Minority Ethnic Achievement Service 0Primary Schools 99,437,300School Intervention 136,000School Specific Contingencies 160,500Schools Forum 10,600Secondary Schools 93,570,400Special Education Needs Top Ups 13,608,500Special School Transport 58,200Special Schools 9,998,500Special Staff Costs 676,400Statements 4,174,800Support For Special Education Needs 1,971,500Teacher Retirement Costs 3,101,500Wirral Hospitals School 1,359,100Emslie Morgan Alternative Provision School (EMAPS) 926,700Further Education 992,000Education Services Grant 730,000School Improvement (Dedelegation) 143,100

Children & Families - Schools Total 18,456,700

Total


Public HealthIncome

Government Grants -30,371,000Customer and Client Receipts -305,000Other Grants and Reimbursements -629,500Recharge - Other Revenue Accounts -14,500


ExpenseEmployees 2,470,700Premises 85,000Transport 19,300Supplies and Services 65,100Third Party Payments 22,818,200Recharge - Support, Management and Buildings 262,000Recharge - Other Revenue Accounts 5,599,700


Public Health Total 0

Total


Public HealthAlcohol Misuse - Adults-prevention 1,881,100Children 0-5 Programmes mandatory 4,890,900Children 0-5 Programmes non mandatory 19,900Children 5-19 Programmes 1,936,800Collaborative Service -134,900Drug Misuse - Adults Treatment 6,299,000Health at Work 195,600Health Protection 393,600Miscellaneous Public Health 4,641,600National Child Measurement Programme 112,600NHS Healthcheck Programme 340,000Obesity - Adults 261,300Obesity - Children 166,400Physical Activity - Adults 0Physical Activity - Children 166,400Public Health Grant -30,371,000Public Health Running Costs 4,995,100Sexual Health Services - Advice, Prevention, Promotion 286,400Sexual Health Services - Contraception 1,700,000Sexual Health STI Testing and Treatment 1,245,200Stop Smoking Services and Interventions 764,400Substance Misuse - Youth Services 209,600

Public Health Total 0

Total


EnvironmentEnvironmental Protection

IncomeGovernment Grants -17,300Customer and Client Receipts -4,055,000Recharge - Support, Management and Buildings 0Other Grants and Reimbursements -10,600Other Sources -240,700Recharge - Other Revenue Accounts -175,300Recharge - Non Revenue Accounts -1,183,400


ExpenseEmployees 3,776,300Premises 47,000Transport 161,900Supplies and Services 550,200Third Party Payments 27,347,900Recharge - Support, Management and Buildings 1,347,600Financing 279,600


Environmental Protection Total 27,828,200

Total


EnvironmentEnvironmental Protection

Business Support - Environmental Services 123,200Environmental Health 1,684,400Environmental Services Management 890,300Homelessness 0Housing Standards & Renewal 0Licensing 54,400Strategic Commissioner Environment 147,300Supported Housing 0Trading Standards 453,300Waste & Environment 9,102,000Waste Levy 15,373,300

Environmental Protection Total 27,828,200

Total


Housing & CommunitiesIncome

Government Grants -143,050,700Customer and Client Receipts -928,300Recharge - Support, Management and Buildings -3,068,300Other Grants and Reimbursements -1,366,800Other Sources -217,700Recharge - Other Revenue Accounts -47,400Recharge - Non Revenue Accounts -177,400


ExpenseEmployees 10,846,950Premises 177,500Transport 196,300Supplies and Services 1,040,500Third Party Payments 6,352,700Transfer Payments 138,098,400Recharge - Support, Management and Buildings 4,363,000Financing 3,658,400


Housing & Communities Total 15,877,150

Total


Housing & CommunitiesAnti Social Behaviour 401,400Assessment 3,385,100Assistant Director-Community Services 0Community Safety 910,200Community Services 350,900Constituency Committee 429,800Customer Services 154,000Customer Transaction 0Estate Management Commercial 0Homelessness 538,400Housing Standards & Renewal 1,025,600Housing Strategy 1,224,000One Stop Shops 0Property Pool Plus 307,100Registration & Coroner 359,600Revenue / Benefits 29,400Supported Housing 6,671,900Community Engagement 89,750

Housing & Communities Total 15,877,150

Total


Leisure & CultureIncome

Customer and Client Receipts -14,522,200Recharge - Support, Management and Buildings -6,151,500Other Grants and Reimbursements -9,400Other Sources -295,800Recharge - Other Revenue Accounts -3,157,800


ExpenseEmployees 16,769,000Premises 4,557,400Transport 823,800Supplies and Services 3,167,000Third Party Payments 109,900Recharge - Support, Management and Buildings 8,572,600Recharge - Other Revenue Accounts 3,210,200Financing 3,940,600


Leisure & Culture Total 17,013,800

Total


Leisure & CultureCultural Services 1,510,700Libraries 4,450,500Parks & Countryside 5,998,100Sport & Recreation 5,040,500Sports & Culture 14,000

Leisure & Culture Total 17,013,800

Total


BusinessBusiness & Tourism

IncomeCustomer and Client Receipts -1,311,100


ExpenseEmployees 2,744,200Premises 5,000Transport 47,600Supplies and Services 346,200Third Party Payments 520,400Recharge - Support, Management and Buildings 476,200Financing 4,200


Business & Tourism Total 2,832,700

Total


BusinessBusiness & Tourism

Building Control 205,100Investment Strategy 1,398,600Planning 272,900Tourism 216,600Regeneration & Economic Development 739,500

Business & Tourism Total 2,832,700

Total


Transformation & ImprovementIncome

Customer and Client Receipts -324,900Recharge - Support, Management and Buildings -209,600Other Grants and Reimbursements -844,200


ExpenseEmployees 2,654,600Transport 7,600Supplies and Services 219,600Third Party Payments 30,500Recharge - Support, Management and Buildings 196,000


Transformation & Improvement Total 1,729,600

Total


Transformation & ImprovementChange Management 247,300Comms, Marketing, Press & PR 586,200Director For Strategic Hub 0Intelligence, Performance and Scrutiny - Intelligence 495,500Policy & Strategy 364,800Strategic Commissioner Growth 35,800

Transformation & Improvement Total 1,729,600

Total


Transport, Technology & InfrastructureIncome

Government Grants -2,560,000Customer and Client Receipts -4,017,500Recharge - Support, Management and Buildings -142,200Other Grants and Reimbursements 0Other Sources -1,405,500Recharge - Other Revenue Accounts 0Recharge - Non Revenue Accounts -567,000


ExpenseEmployees 4,021,900Premises 4,543,700Transport 839,900Supplies and Services 1,634,400Third Party Payments 22,095,200Recharge - Support, Management and Buildings 574,800Recharge - Other Revenue Accounts 103,500Financing 7,910,100


Transport, Technology & Infrastructure Total 33,031,300

Total


Transport, Technology & InfrastructureDirector for Business Services 0Health, Safety & Resilience 0Merseytravel Levy 21,888,000Traffic & Transport -138,300Transport Depot 142,600Highways Management 11,213,800Regeneration & Economic Development -74,800

Transport, Technology & Infrastructure Total 33,031,300

Total


ResourcesResources

IncomeGovernment Grants -2,909,800Customer and Client Receipts -5,488,000Recharge - Support, Management and Buildings -23,568,400Other Grants and Reimbursements -16,833,300Other Sources -8,309,000Interest -870,000Recharge - Other Revenue Accounts -9,058,500Financing -29,728,800Recharge - Non Revenue Accounts -1,023,500


ExpenseEmployees 29,663,850Premises 5,637,900Transport 310,300Supplies and Services 19,521,800Third Party Payments 14,941,400Transfer Payments 3,437,800Recharge - Support, Management and Buildings 8,204,900Recharge - Other Revenue Accounts 2,267,200Financing 25,648,900



Total


ResourcesResources

Admin Buildings 652,800Audit 0Business Support - Customer Services 0Chief Executive 258,900Cleaning -11,100Community Cohesion HR & OD 162,750Corporate & Democratic Services 4,458,600Corporate Growth and Savings -8,152,400Design Consultancy 757,700Director for Delivery 0Estate Management Commercial -618,200Financial Services 0H R -58,200Halls 480,800Health, Safety & Resilience 568,200Income and Debt 1,188,100IT Printing Services -275,600IT Services - Core 0IT Services - Phones 0IT Services - Schools -8,800Legal Services 560,300Libraries 0Merseyside Pension Fund 0Organisational Development -55,900Payments 0PFI 155,200Procurement 0Property Maintenance 1,699,700Records Management & Archives 571,000Treasury Management & Financing -2,489,100Contingency 12,000,000


REVENUE BUDGET

FURTHER FINANCIAL INFORMATION This section contains further financial information that formed part of the Revenue Budget and Council Tax Levels 2017/18 report to Cabinet 20 February 2017 and

updated for decisions taken by Council on 6 March 2017.

• Revenue Savings 2017/18 • Revenue Budget Contingency 2017/18 • Revenue Growth 2017/18 • Government Funding 2017/18 • Chief Financial Officer Statement for 2017/18 • Level of General Fund Balances • Level of Earmarked Reserves • Council Tax Information • Business Rate Information • Collection Fund • Support, Management and Buildings Recharge Basis 2017/18 • Fees and Charges • Resolution Cabinet 20 February 2017

REVENUE SAVINGS 2017/18 Process Cabinet on 8 December 2016 considered £132 million of budget reductions and proposals for the period 2017/21. Officers were authorised to complete any required consultation and engagement with residents, partners and other stakeholders where required on the budget proposals in advance of Budget decisions in February 2017. A schedule of all the savings proposals agreed by the Council on 6 March is detailed in this section. They are set out on the basis of the three savings themes being:- Delivering Differently The Wirral Plan sets out how public services will work together to deliver our ambitions for Wirral. In recent years the range of opportunities to either improve service delivery directly, or to reduce costs/increase income have increased. These forms of public service reform include a range of potential areas including ensuring the Council can derive the maximum benefit from any devolution of powers; and exploring areas of commercialisation, integration and collaboration with partners to share best practice and increase efficiency. The Council will continue to explore which of these opportunities could work and the Transformation Programme is a fundamental redesign of what services are provided and importantly how the services are provided. It will cover almost all of the directly-provided services to re-focus their delivery on the outcomes agreed in the Wirral Plan. This Programme is critical to the achievement of a balanced budget across the MTFS period. It is an ongoing programme to both transform our services and achieve significant savings. While not sufficient to cover the total funding gap Transformation forms a key part of the budget strategy for 2017/18 and beyond. Income and resource management The Council must do all it can to build its way to a sound financial position. Government proposals will result in local authorities receiving no general Revenue Support Grant from 2020 and being increasingly reliant upon the income generated locally from Council Tax, Business Rates and Fees and Charges. Maximising our income to offset the requirement for cuts is important to our Strategy as every £ generated is a £ that can be invested in securing services people require. This will not be achieved through charging more for services. The Wirral Plan sets out aims to increase investment, jobs and housing in the borough. This involves making better use of the assets available to ourselves and partners and translates into higher levels of Business Rates, Council Tax and people in work. As part of the effective and efficient management of resources the assumptions regarding future trends and indications from Government are kept under review. This also involves ensuring we get the best value for money from any contracts and that the services we purchase are those that best meet the needs of Wirral people.

Service Changes The scale of the financial reductions makes it impossible to avoid changing or reducing some services. The Budget Strategy mitigates to a large degree the impact of Service Changes through the prioritisation of the first two themes which have few service specific impacts. The Council will continue to work with partners to ensure reductions are managed in a strategic, planned way to ensure we retain a focus on the overall vision for the borough.

For 2017/18 the Council considered proposals and also planned for future years to provide assurance for the services the Wirral residents need. The issues the Council is facing have been monitored and the proposals for 2017/18 and future years follow the same budget themes as for 2016/17. The agreement of the four year funding settlement with the Government supports this longer term view and approach. The MTFS will further develop the indicative financial proposal for 2018/19-2020/21. The table below shows how over the period the budget gap can be closed. This is anticipated to happen in the later years with the use of balances required in 2017/18.

Summary of Savings 2017/18/Indicative proposals 2018/19-2020/21 As reported to Cabinet 20 February 2017

SAVINGS THEME 17/18 £m

18/19 £m

19/20 £m

20/21 £m

TOTAL £m

Delivering Differently 5.4 8.2 9.7 19.7 43.0 Income and Resources 29.2 25.2 22.6 18.1 95.1 Service Changes 1.6 +0.6 - - 1.0 TOTAL PROPOSALS 36.2 32.8 32.3 37.8 139.1 Summary of BUDGET PROPOSALS 2017/18 SAVINGS THEME £m Delivering Differently 5.4 Income and Resources 29.2 Service Changes 1.6 TOTAL PROPOSALS 36.2 WIRRAL PLAN THEME £m Business 19.5 Environment 5.3 People 11.4 TOTAL PROPOSALS 36.2

DETAILS: SAVINGS THEME

DELIVERING DIFFERENTLY 17/18 £m NARRATIVE OF PROPOSAL

Leisure and Cultural Services 0.80 Increased income following capital investment plus changes to operations at Woodchurch

Access Wirral 0.30 Removal of vacant posts

Adult Social Care Integration 2.90

The NHS & Social Care integration transformation projects and including learning disabilities. Linked to increased income from the Precept, Improved Better Care Fund and Adult Social Care Grant

Children’s Services Managing Demand 1.40

Funding from the Revenue Budget Contingency and the Transformation Programme.

DELIVERING DIFFERENTLY 5.40 INCOME AND RESOURCES: REVISED ASSUMPTIONS

17/18 £m NARRATIVE OF PROPOSAL

Revised Pay Assumptions (now 1%) 1.00 Reductions in the sums originally

identified based on updated assessments with no impact on services

Removed General Prices Inflation 0.50 Removed Unallocated Growth 2.30 Reduced Treasury Management costs 2.00

Commercial approach over the use of finance related opportunities with no impact on services

Re-profiled Pension payments 2.20 Capitalised Transformation Team 0.50 Community Fund (2017/18 only) 0.75 REVISED ASSUMPTIONS 9.25

INCOME AND RESOURCES: COMMISSIONING / CONTRACTS


Estates and Assets Management 0.70 Office closures and disposals

Range of Efficiencies 0.60 Small contracts / procurement – no impact

Digital (IT Savings) 0.20 Contracts and procurement Supported Housing Contracts 0.75 Contract for housing / homelessness

Public Health (Renegotiated Contracts) 3.00

Revised contracts and new commissioning approaches on public health services.

Changes in Waste Contract 0.50 Reduction in value of Biffa contract LCR Integration of Adult Safeguarding 0.20 Integrated adult safeguarding hub

Waste Levy 0.60 Levy agreed with 0% increase Transport Levy 2.50 Levy agreed with 10% reduction COMMISSIONING / CONTRACTS 9.05

INCOME AND RESOURCES: INCREASING INCOME


Council Tax Increase 2.46 Tax increase of 1.99%

Adult Social Care Precept 3.60 Must be allocated to Adult Social Care. Profile now changed to 3% in 2017/18.

Housing Growth 1.10 Growth reflected in Council Tax Base Improved Better Care Fund 1.40 Must be allocated to Adult Social Care New Adult Social Care Grant (2017/18 only) 1.80 Must be allocated to Adult Social Care

Adult Social Care Integration -2.90 Increased income linked to the Delivering Differently transformation projects.

Business Rates 2.10 Projected growth which has increased New Homes Bonus (phasing out) -0.91 Reduction in Bonus now revised

Litter and Dog fouling Fines 0.40 Including the fines income in the Budget

INCREASING INCOME 9.05

INCOME AND RESOURCES: FEES & CHARGES


Fees & Charges – general 0.65 Review and increase of charges which includes court costs, advertising and others

Car Parking 0.37

Encompasses three proposals regarding existing tariffs and new charges at country parks and New Brighton and town centres

Leisure Centres 0.50 10% price increase on Membership products and pay & play at leisure centres

Garden Waste Collection 0.20 Removal of £5 on-line discount

Business Rates Discretionary Relief 0.15

Policy retained with proposal based on organisations eligible for Small Businesses Rate Relief and a Schools contribution

FEES & CHARGES 1.87 INCOME AND RESOURCES 29.22

SERVICE CHANGES 17/18 £m NARRATIVE OF PROPOSAL

Senior Management Reduction 0.50 Staff reductions, targeted at upper management Voluntary Redundancy

Programme 0.50

Training Budgets 0.30 One year pause in spending on car park maintenance, constituency committees and staff training (excluding children’s services)

Car Park Maintenance 0.08 Constituency Committees 0.20 Total SERVICE CHANGES 1.58

DETAILS: WIRRAL PLAN THEME

PEOPLE 17/18 £m NARRATIVE OF PROPOSAL

Adult Social Care Integration 2.90

The NHS & Social Care integration transformation projects and including learning disabilities. Linked to increased income from the Precept, Improved Better Care Fund and Adult Social Care Grant

Adult Social Care Precept 3.60 Must be allocated to Adult Social Care. Profile now changed to 3% in 2017/18.

Improved Better Care Fund 1.40 Must be allocated to Adult Social Care

New Adult Social Care Grant (2017/18 only) 1.80 Must be allocated to Adult Social Care

Adult Social Care Integration -2.90 Increased income linked to the Delivering Differently transformation projects.

Public Health (Renegotiated Contracts) 3.00

Revised contracts and new commissioning approaches on public health services.

LCR Integration of Adult Safeguarding 0.20 Integrated adult safeguarding hub

Children’s Services Managing Demand 1.40

Funding from the Revenue Budget Contingency and the Transformation Programme.

PEOPLE 11.40

ENVIRONMENT 17/18 £m NARRATIVE OF PROPOSAL

Leisure and Cultural Services 0.80 Increased income following capital investment plus changes to operations at Woodchurch

Leisure Centres 0.50 10% price increase on Membership products and pay & play at leisure centres

Car Parking 0.37 Encompasses two proposals regarding existing tariffs and new charges at country parks.

Garden Waste Collection 0.20 Removal of £5 on-line discount

Housing Growth 1.10 Growth reflected in Council Tax Base

New Homes Bonus (phasing out) -0.91 Reduction in Bonus now revised

Litter and Dog fouling Fines 0.40 Including the fines income in the Budget

Community Fund (2017/18 only) 0.75 Funding available for 2017/18

Supported Housing Contracts 0.75 Contract for housing / homelessness

Changes in Waste Contract 0.50 Reduction in value of Biffa contract

Waste Levy 0.60 Levy agreed with 0% increase

Car Park Maintenance 0.08 One year pause in spending on car park maintenance.

Constituency Committees 0.20 One year pause in spending on constituency committees.

ENVIRONMENT 5.34

BUSINESS 17/18 £m NARRATIVE OF PROPOSAL

Council Tax Increase 2.46 Tax increase of 1.99% Access Wirral 0.30 Removal of vacant posts Revised Pay Assumptions (now 1%) 1.00 Reductions in the sums originally

identified based on updated assessments with no impact on services

Removed General Prices Inflation 0.50 Removed Unallocated Growth 2.30 Reduced Treasury Management costs 2.00 Commercial approach over the use of

finance related opportunities with no impact on services

Re-profiled Pension payments 2.20 Capitalised Transformation Team 0.50 Estates and Assets Management 0.70 Office closures and disposals

Range of Efficiencies 0.60 Small contracts / procurement – no impact

Digital (IT Savings) 0.20 Contracts and procurement Business Rates 2.10 Projected growth which has increased Transport Levy 2.50 Levy agreed with 10% reduction

Fees & Charges – general 0.65 Review and increase of charges which includes court costs, advertising and others

Business Rates Discretionary Relief 0.15

Policy retained with proposal based on organisations eligible for Small Businesses Rate Relief and a Schools contribution

Training Budgets 0.30 One year pause in staff training (excluding children’s services).

Senior Management Reduction 0.50 Staff reductions, targeted at upper management Voluntary Redundancy

Programme 0.50

BUSINESS 19.46

REVENUE BUDGET CONTINGENCY 2017/18 The Revenue Budget Contingency established in 2016/17 will continue in the 2017/18 budget. Funded by General Fund Balances it has been supplemented by the distribution of the Collection Fund Surplus and the release of Reserves. This source of funding within the Revenue Budget is to mitigate a number of financial risks which while not all definitive could occur in 2017/18 and to bridge the implementation of transformational savings in Social Care in future years. Risk / Pressures in the Budget 2017/18 Summary of Risks / Pressures 2017/18 £m Adult Social Services The relates to the overspend and increased costs identified in 2016/17 for which funding is reflected in the Contingency

5.4

Children’s Services Looked After Children The forecast overspend in 2016/17 within Children’s Social Work and Looked After children Commissioned Services is reflected in this element of the contingency.

5.0

Delivery of 2017/18 Proposals The delivery within Budget and within year the proposed savings

1.6

Total risks / pressures 12.0 Adult Social Services - In 2016/17 the service has faced increasing numbers of clients and increase care fees. £5.4 million was included in the budget for the service to cover these costs from the Contingency and General Fund balances in 2016/17.With the transformation of services and integration with health partners to deliver future efficiencies together with the increasing sums from the Improved Better Care Fund to bridge the budget before additional funding resources are received from 2018/19. An inclusion in the contingency of £5.4 million has therefore been made in 2017/18. Adult Social Services latest monitoring at December 2016 indicates that the services will overspend in the current year by £4.5 million. This is over and above the £5.4 million. This overspend is not being incorporated into the contingency for 2017/18 as the additional funding due from the new Adult Social Care Grant and the additional increase in the Adult Social Care Precept will be allocated to fund these pressures. Children’s Social Care – The forecast overspend for 2016/17 for Children’s Services is £4.6 million. The pressures for 2016/17 are attributable to the increased Social work service costs due to agency staff and an increase in the number of packages of care for Looked after Children. This is over and above the £5 million allocation of the 2016/17 Revenue Budget Contingency to the services budget in 2017/18

The implementation of the recommendations from the Ofsted inspection in 2016 is anticipated to take time to transform Children’s Services and will not be completed until at least 2019. It is due to this that it is prudent at this stage to assume that the focus will be on implementation and that the reduction in the number of Looked after Children is unlikely to change significantly before April 2017. Therefore it is proposed to include in the contingency a sum to reflect the potential that numbers will not change early in 2017 but that the service transformation will begin to be realised during the next financial year. An inclusion in the contingency of £5 million has therefore been made in 2017/18. Savings Contingency – An assessment of the financial proposals for 2017/18 has indicated that the majority will be achieved. However a number of proposals involve income generation or further staff consultations which bring risks so a sum has been included for the potential that not all savings will be implemented in full in 2017/18. The use of this contingency will be monitored during 2017/18 and within the Financial Monitoring reports to Cabinet, prior to any potential continuation across the MTFS period. This allows sufficient time to implement the savings proposals and required transformation whilst avoiding risk associated with the high level of savings the Council is required to make. Revenue Budget Contingency Elements Revenue Contingency 2017/18 – Elements £m Revenue Budget 2016/17 – Continuation Comprising of £5.4 million for Adult Social Services and £0.6 million from the unallocated contingency from 2016/17 Revenue Budget 2017/18- New Amount Comprising for £5 million for Children’s Social Care and £1 million to take the Savings Contingency to a total of £1.6 million

6.0

6.0

Total 12.0

REVENUE GROWTH 2017/18

The Budget Projections for 2017/18 included an assessment of growth of £33.9 million arising from investment in services due to demographic changes, inflationary rises and financial pressures that have occurred and been reported as part of the Revenue Monitoring reports. All potential growth areas were reviewed by internal challenge as to their validity and justification. This included items of a corporate nature such as future pay awards. Revenue Budget Contingency The Budget 2017/18 includes £13.5 million for the financial pressures that have occurred in 2015/16 and reoccurred in 2016/17. Reported through the regular Revenue Monitoring updates these have been in the main in the areas of Adult and Children’s Social Care where increased demands plus slippage of savings have led to overspends. In 2016/17 this was covered by the allocation of the Revenue Budget Contingency, funded from balances. The £7.5 million of growth reflects in the inclusion in service budgets of amounts for children’s social care and the non-achievement of savings in other areas. This investment provides a planned and robust approach to the budgetary pressures that the Council continues to face in a number of specific areas. A further amount of £6 million has been included in the Revenue Budget Contingency for 2017/18. Inflation and Pay Awards A 1% annual pay award (rather than the original 2%) has been included with contractual inflation of £3.3 million assumed for 2017/18. The provision for general price increases was assumed in the projections but was removed as a financial proposal for 2017/18 so any inflationary pressures will be accommodated within existing budgets. Investment in services to meet demand pressures A number of assumptions have been made in growth to cover demand led pressure within Adult Social Care and Children’s Care. The former mitigated by the increased funding from the Adult Social Care Grant and the phasing of the Adult Social Care Precept. Increases in the National Living Wage will impact upon a number of organisations that provide care and who are contracted to carry out functions on behalf of the Council. An amount has been included in projections to fund the increase in costs expected as a result of announced rises from April 2017. Within the proposals presented in December 2016 under Income and Resources Management there are proposals which have removed projected growth assumptions including price increases, capital financing, unallocated growth and a reduction in the pay rise. The final revisions are presented in the Table below with reduced growth requirements including in the budget for 2017/18. These changes include levies, the reduction in Education Services Grant and the deferring of the ending of support from the Community Fund of a number of Council housing related services.

Summary of the Growth Projection Actual 2017/18 2017/18 By Change £m £m Revenue Budget Contingency 2016/17 (in service budgets)

7.5 7.5

Revenue Budget Contingency 2017/18 (additional amount)

6.0 6.0

Inflation and pay awards 8.4 4.2 Investment in Services for increased demands 4.6 4.6 Other (levy, grant changes) 5.1 2.9 Unallocated Growth (legislative) 2.3 0 Original Growth 33.9 25.2 Proposals to reduce growth -8.7 - Revised Growth 25.2 25.2

GOVERNMENT FUNDING 2017/18 LOCAL GOVERNMENT FINANCE SETTLEMENT (LGFS) The Provisional LGFS was announced on 15 December 2016 and the consultation closed on 13 January 2017. The final settlement was announced on 20th February 2017. The Settlement announced no new general grant funding in total. It sees Wirral’s main Revenue Support Grant reducing by £14 million in 2017/18. In 2016/17 Wirral received £51 million and for 2017/18 the announced amount is £37 million. The Government in the 2016/17 Settlement made a four year funding offer to all local authorities. This covered: Revenue Support Grant, Business Rate Tariff and Top-up payments, Rural Support Delivery Grant and Transition Grant. Wirral does not receive the last two grants. The 2017/18 Settlement announced that 97% of Councils had accepted the offer. As a consequence of accepting the offer Wirral’s grant amounts will be the same as those contained in the December 2016 budget projections. The Settlement announced the 100% Business Rate Retention (BRR) pilots for 2017/18 including the Liverpool City Region. Wirral as part of the pilot will not receive a direct payment of RSG in 2017/18. Funding to the same amount of RSG will come from the direct receipt to the Council of 99% of all business rates raised (1% is due to Merseyside Fire and Rescue Service) and Top-up grant that the Council receives. The pilot has been agreed with Government on the basis that the Council suffers no detriment to its funding when compared to the funding, announced in the LGFS that would have been received without the pilot being operational. The Memorandum of Understanding has been confirmed in the final settlement. The Government announced that it will allow the Adult Social Care Precept to increase from 2% to 3% on condition the total increase to 2019/20 does not exceed 6% over the three years. The total allowable Precept rise over the period is unchanged but the earlier implementation is a cash benefit. The Precept element of the Council Tax has to be separately identified on the Council Tax bill and its purpose is to help meet the pressures for adult care services. The details of this have to be reported by the S151 Officer to Government demonstrating that the additional financial resources from Council Tax have been allocated to Adult Social Care budgets in the year that it is levied. The Referendum threshold for general Council Tax increases remains at 2%. The Government confirmed previously announced plans to transfer £800 million to the Improved Better Care Fund. The changes announced divert a further £241 million to the new Adult Social Care Grant for 2017/18 to fund social care services in areas identified as being of higher relative need. As part of the Settlement the Council lost a further £0.7 million (above the projected £0.2 million) of Bonus in 2017/18 rather than 2018/19.

The Council is to receive £1.8 million in new Adult Social Care Grant in 2017/18. This is additional funding but must be allocated to Adult Social Care. Additional funding from the Improved Better Care Fund was announced being made available from the £800 million transferring from New Homes Bonus. It has also been allocated to areas deemed of higher need with lower ability to raise resources through the Precept. The Council is due to receive the £1.407 million (2017/18) rising to £8.3 million (2018/19) and £14.3 million (2019/20) of Improved Better Care Fund. This will be paid direct to the Council as part of the Rates Top Up Grant and must be spent on Social Care. Since April 2015 a Better Care Fund (BCF) pooled budget arrangement has been in place with Wirral Clinical Commissioning Group (CCG) and operates under Section 75 joint governance arrangements being hosted by the Council. A condition of accessing the money in the Fund is that spend must be in line with the jointly agreed spending plans and these plans must meet certain requirements. The Wirral Fund comprises existing CCG and Council funding with the Council funding including Disabled Facilities Grant, Social Care Capital Grant and the NHS Social Care Transfer Grant. The Government confirmed Public Health Grant for 2017/18 at £29.8 million which is as expected. The reduced Education Services Grant announced was £0.9 million higher than the projected loss.

GOVERNMENT FUNDING TO WIRRAL COUNCIL 2017/18 GENERAL GRANT START UP FUNDING

Revenue Grant

Baseline Funding

Start-Up Funding

£ £ £ Formula Funding 94,850,342 94,850,342 General Grants Early Intervention 7,890,374 7,890,374 Homelessness Prevention 65,121 65,121 Learning Disability / Health 7,412,839 7,412,839 Local Flood Authority 156,323 156,323 Local Welfare Support 1,209,667 1,209,667 Care Act Funding 2,861,691 2,861,691 Total Start-Up Funding 114,446,357 *114,446,357

*Business Rates Rates Baseline 62,604,661 Top-Up 51,841,696 Baseline Funding 114,446,357 Safety Net 105,862,881 OTHER GRANTS £ New Homes Bonus 2,264,181 Discretionary Housing Payments Subsidy Outstanding Housing Benefit Subsidy 140,000,000 Housing Benefit Administration Subsidy 1,399,070 Private Finance Initiative 5,471,500 Public Health 29,847,000 Education Services Grant 943,211 Former Independent Living Fund Grant 1,622,333 Adult Social Care Support Grant 1,808,415 Additional Funding for Adult Social Care : Budget 2017 *note 8,307,042 Total 191,662,752 £ Schools Dedicated Schools Grant 250,795,200 Total Schools 250,795,200 *Note re Additional Funding for Adult Social Care This funding was announced in the National Budget on March 8th and has not been incorporated into the details of the Council’s budget as ratified on March 6th.

CHIEF FINANCIAL OFFICER STATEMENT FOR 2017/18 SUMMARY Under Section 25 of the Local Government Act 2003, the Authority’s Chief Financial Officer (presently the Section 151 Officer) is required to report on the robustness of the estimates made for the purposes of the Council’s Budget calculations and the adequacy of the General Fund balances and reserves. Section 25 also requires Members to have regard to this report in making their decisions. BACKGROUND Local Authorities decide every year how much they are going to raise from Council Tax. Decisions are based on a budget that sets out estimates of what the Council plans to spend on each of its services in the forthcoming year. The decision on the level of the Council Tax is taken before the financial year begins and it cannot be changed during the year, so allowance for risks and uncertainties that might increase service expenditure above that planned, must be made by: a) making prudent allowance in the estimates for each of the services; b) ensuring that there are adequate reserves to draw on if the service estimates turn out to be insufficient. This Statement is intended to give Members assurance that the Budget has been based on the best available information and reasonable assumptions. In order to meet the robustness requirement a number of key processes have been in place, including: • Review by finance staff involved in preparing the base budget and

supporting information. • Revenue and capital expenditure is differentiated along with appropriate

sources of funding, including revenue implications of capital expenditure. • Existing and future expenditure pressures are identified by reference to

financial monitoring reports for 2016/17. • Ownership by the Senior Leadership Team of proposed savings and their

achievability. • Identification of financial risks. • The Section 151 Officer provided advice throughout the process. • Consultation with the Members, public and groups as required. • Accountable Managers identifying issues, projecting demand and

considering value for money and efficiency. • Ongoing development, and refinement, of data and information to monitor

service volume and unit costs and track changes in both.

RELEVANT RISKS A formal Risk Review of the Revenue Budget is undertaken to reflect local circumstances and from this it is proposed that Balances be set at a level appropriate to the identified risks. Risks in relation to the Revenue Budget and Capital Programme flow in part from the assumptions in the Annex and will be kept under review as part of the Financial Monitoring Reports to Cabinet throughout the 2017/18 financial year. ROBUSTNESS OF THE REVENUE ESTIMATES The 2017/18 budget built on the process followed in 2016/17 including a robust process to identify, review and assess both growth and savings proposals. This saw the production of proposals which were subject to public consultation and review by Elected Members. Cabinet agreed proposals in December 2016 to assist in the production of a balanced Revenue Budget for 2017/18 under the headings of: • Delivering Differently • Income and Resource Management • Service Changes These are formally concluded with the setting of Council Tax levels for 2017/18. In assessing the robustness of Revenue Budgets the key risks remaining are: • The actual delivery of the approved savings and efficiencies. • The impact of increasing demand for services, particularly care services, and

reducing grant funding outlined in Government announcements. • The confirmation of Government grants, of which a number remain unknown. • Changes to the Capital Programme and associated revenue costs. • The possibility of legal challenge including judicial review. • On-going review of the risks relating to Council Tax and Business Rates

collection levels and appeals. These assumptions and changing circumstances require forecasts to be regularly reviewed. This includes the identification of options for consultation and to more detailed budgets being prepared for the next financial year, and the medium term, during the autumn. The Council continues to face a challenging future while needing to achieve the Wirral Plan, to Deliver Services Differently and to increase Income. If proposals are delayed or not delivered in a way that produces the benefits anticipated there will be a need to make up the shortfall from other additional reductions elsewhere.

Changes to the business rate system. The Council is participating from April 2017 in a no detriment pilot of 100% retention across the Liverpool City Region. This is to test how the full implementation planned for 2020 will work. It is currently therefore difficult to evaluate what the changes will mean for the Council as the full details of how the full operation of Local Government Funding, including the ending of Revenue Support Grant and the transfer of new responsibilities to local authorities will operate. Further details, such as updating the relative needs formulae (determining how resources are initially distributed between councils) and the impact of business rate appeals, have yet to be determined. In order to mitigate the financial risks associated with the implementation of savings and to improve the robustness of the estimates, a Revenue Budget Contingency is to be maintained drawn from General Fund balances that have been supplemented by the release of Earmarked reserves. ROBUSTNESS OF THE CAPITAL PROGRAMME The agreed Capital Programme includes projects costed at current year prices with many subject to a subsequent tender process which lead to variance in the final cost. In some areas, the design brief may not yet be finalised, again giving rise to potential price variance. This is a known risk and can be managed through phasing or reduction in specification. In assessing the robustness of the Capital Programme the risk of being unable to fund variations outside of the Programme is minimal mainly due to the phasing of projects. If necessary, the Council can choose to freeze parts of the Programme throughout the year to ensure spend is kept within the agreed budget. The main risks of the Capital Programme are:- • The ability to deliver the Programme within the agreed timescales. The

re-profiling and slippage from previous years is fully funded but increases the pressure to deliver the anticipated 2017/18 Programme.

• The future Programme includes new starts based on the availability of resources. There is a number of significant asset disposals planned and in today’s climate; the capital receipts may be higher / lower than expected. The Programme includes the Transformation Programme funded from capital receipts placing increasing reliance upon timely delivery of receipts. A failure to materialise will have consequences on the availability of revenue funding.

ADEQUACY OF THE GENERAL FUND BALANCES AND RESERVES The recommended approach to determining the level of General Fund balances and reserves follows the guidance issued by Grant Thornton (the Council’s External Auditor) and CIPFA (the professional organisation responsible for the Accounting Code). The Level of General Fund Balances for 2017/18 is referred to in the main report.

RESOURCE IMPLICATIONS In the Medium Term Financial Strategy and Council Budget 2017/18 report to Cabinet on 8 December 2016 the Budget Projection for 2017/18 indicated a shortfall between spend and resources of £45 million and a projected budget funding gap for the period 2017/21 of £132 million. Cabinet considered savings options totalling £33.9 million for 2017/18 on 8 December 2016. This met the Forecast Funding Gap for 2017/18. These included a Council Tax increase of 1.99% and the 2% Adult Social Care Precept costs which are now subject to further consideration by Cabinet following the receipt of the Provisional Local Government Finance Settlement. Further information has been received about the Settlement and Council Tax setting arrangements as well as the Liverpool City Region 100% Business Rates Retention Pilot Scheme. The detail in the body of the Cabinet report reflect a revised position, where necessary to ensure best use of public funds and a Budget set within the constraints of central government parameters. COUNCIL AGREEMENT OF STATEMENT

The above Statement of the Chief Finance Officer was noted by Cabinet on 20 February 2017.

LEVEL OF GENERAL FUND BALANCES SUMMARY This section sets out the level of General Fund balances the Council maintains and the approach that has been used to determine this level. BACKGROUND AND KEY ISSUES INTRODUCTION Sound financial management principles require that sufficient funds are retained by the Council to provide a stable financial base at all times. To retain this stable financial base the Council needs to maintain a General Fund balance that is sufficient to provide a financial reserve for unanticipated expenditure and/or expenditure that is of an unforeseen, emergency nature. The Chartered Institute of Public Finance and Accountancy (CIPFA) has issued guidance to Councils on the assessment of the adequacy of unallocated general reserves. This recommends that an assessment of risks both external and internal should take place when the Council is setting its annual budget. The Council needs to have in place arrangements to ensure its’ sustainable financial health and have measures in place to mitigate against financial risks. One aspect of this is the maintenance of sufficient General Fund balances. LOCALLY DETERMINED LEVEL OF GENERAL FUND BALANCES The level should be based on the Council’s own specific circumstances. Grant Thornton in their report of December 2014, “Rising to the Challenge: the evolution of local government” identified best practice as follows: • The Council operates within a locally determined appropriate level of

reserves and balances. • The General Fund balance is maintained at or above the locally agreed

minimum level. The setting and justification of General Fund balances is part of the Council Medium Term Financial Strategy. It is crucial the Council has sufficient balances, and earmarked reserves, to maintain financial standing and resilience. For local authorities there is no statutory minimum level and it is for each Council to take a view on the required level having regard to matters relevant to its local circumstances. CIPFA guidance issued in 2014 states that in order to assess the adequacy of unallocated general reserves the Chief Financial Officer should take account of the strategic, operational and financial risks facing their authority. The assessment of risks should include external risks, such as natural disasters as well as internal risks such as the achievement of savings. The Local Government Finance Act 1992 required Councils to consider their level of reserves at least once a year.

CIPFA state that the financial risks should be assessed in the context of the Council’s overall approach to risk management. In its paper “Local Authority Reserves and Balances” the following factors are relevant to determining the level of balances. • The treatment of inflation and interest rates. • The treatment of demand led pressures. • The treatment of planned efficiency savings/productivity gains. • The financial risks inherent in any significant new funding partnerships, major

outsourcing arrangements or major capital developments. • The availability of reserves, government grants and other funds to deal with

major contingencies and the adequacy of provisions. • The general financial climate to which the authority is subject. In determining the appropriate level of balances the Council takes account of the strategic, operational and financial risks facing the Council. In planning the financial future and the level of reserves the Council takes into account of the main risks and uncertainties including:- • Legislative changes • Inflation • Grants and Partnerships • Volume and Demand Changes • Budget Savings • Insurance and Claims • Energy Security and Resilience This has been Wirral Councils approach since November 2012 and is reviewed in line with CIPFA guidance. A consideration of the risks and the financial circumstances that might be faced by Wirral for 2017/18 has been made. The risk factors used in the Councils assessment are similar to those recommended by CIPFA guidance. This results in a minimum level which the Council must maintain and updates the previous assessment of February 2016. FINANCIAL RESILIENCE: REDUCTIONS TO RISK AND MITIGATION The Revenue Monitoring throughout 2016/17 has shown that the Council has been overspending in specific areas with an overall positive position predicted at the year end. Work continues for this financial year so that it continues to be delivered within the resources available. At December 2016 (Quarter 3) the projected underspend was £0.4 million. The process for the 2017/18 Budget has included a risk assessment of all savings. Based upon the approach set out above and having regard to both the current financial position and the Budget for 2017/18 and beyond the calculation has been updated and is detailed in the Annex to this summary.

SUMMARY OF THE ASSESSED GENERAL FUND BALANCES 2016/17 2017/18

£m £m Assessed at February 2017 11.5 10.0

The February 2017 assessment for 2017/18 is a reduction on the assessed amount for 2016/17. The main change has been a reduction in the risk associated with the adult social care demand-led budgets which reflects the mitigation provided by the additional funding due in 2017/18. This additional funding comes from the increase in the Adult Social Care Precept, the Adult Social Care Grant and the Improved Better Care Funding. In addition, the integration with Health will commence in 2017/18 reducing the risk factor further as this is seen as an improved way to manage demand. The inflation risk has been revised upwards for supplies and service costs to reflected potential general rises that may occur and have been forecast by the Bank of England. A risk amount to cover the deliverability of the savings, in line with the practice for 2016/17, has been included in the Revenue Budget Contingency for 2017/18. The 2016/17 General Fund balance risk calculation was for a minimum of £11.5 million at 31 March 2017. The latest Monitoring Report December 2016 (Quarter 3) showed that the projected position was £11.8 million. This is based on a projected underspend of £0.4 million. The projected amount is £1.8 million above the target amount of £10 million for 2017/18 and can support the General Fund Budget. Any further underspending in 2016/17 and reduced call on balances will be allocated in the same away. This will be detailed in the financial outturn for the year. RELEVANT RISKS The Council needs to have good financial resilience at a time of increasing financial pressures and in difficult economic times. The holding of sufficient funds is to support resilience. The locally and risk based approach to the level of General Fund balance is in line with the achievement of this approach. The calculation of the level of General Fund balances is based upon an assessment of risk against a series of key areas which takes into consideration the specific issues as they affect Wirral. Setting General Fund balances to a % of the net budget or at a level of balances based on the level of regular Council expenditure and income e.g. two months of regular expenditure and income do not assess the specific circumstances that the Council faces. COUNCIL AGREEMENT ON GENERAL FUND BALANCES The level of General Fund balances recommended continues to be based on a locally determined approach to the assessment of the financial risks that the Council may face in the future. The Council maintains its level of balances at, or above, the locally determined level of General Fund balances.

ASSESSMENT OF GENERAL FUND BALANCES 2017/18 ANNEX Area of Risk 2017/18

Budget Risk

Levels Value

£000's £000's

Legislative Changes Local Business Rates Income 30,975 4.00% 1,239.0

Investments – Bank Bail in Arrangements 1,000 9.00% 90.0 Single Status 3,000 3.00% 90.0

58,775.0

1,419.0

Inflation Employees 119,609 0.10% 119.6

Premises 15,349 0.75% 115.1 Transport 5,870 1.50% 88.1 Supplies 112,000 1.50% 1,680.0 Services 136,000 1.00% 1,360.0

529,597.0

3,362.8

Grants and Partnerships Housing Benefits incl Admin Grant 140,769 0.50% 703.8

Better Care Fund 30,000 1.00% 300.0 Alternative Delivery operation 0 0.00% 500.0

170,769.0

1,503.8

Volume / Demand Changes Capital Receipts 10,000 9.00% 900.0

Customer and Client Receipts 48,030 1.00% 480.3 Demand Led Budgets (Social Care) 92,000 1.00% 920.0 Collection Fund 127,430 0.25% 318.6 Winter Pressures 400 0.00% 0.0

277,860.0

2,618.9

Budget Savings Budget Reductions (held in the Contingency) 0 0.00% 0.0

Insurance/Public Liability Third Party Claims MMI Liabilities 380 5.00% 19.0

Legal Liabilities 9,723 2.00% 194.5 Self-Insured Liabilities 2,977 2.00% 59.5

13,198.0

273.1

Energy Security and Resilience Infrastructure failure 3,000 25.00% 750.0

Carbon Tax Legislation 400 20.00% 80.0

TOTAL

10,007.5

LEVEL OF EARMARKED RESERVES SUMMARY As part of the process for setting the budget a mid-year review of the amounts held in reserves is undertaken. The setting and justification of provisions and reserves is a key element of the Councils financial process. At the start of 2016/17 the Council held over £73.9 million in earmarked reserves. The review recommended the release of £9.2 million of reserves which are no longer required and are to be added to General Fund Balances to support the Revenue Budget. BACKGROUND AND KEY ISSUES Integral to the effective use of resources is an understanding of the overall financial position of the Authority. The Chartered Institute of Public Finance and Accountancy (CIPFA) have issued guidance on the establishment and maintenance of local authority reserves which makes it clear that Councils when reviewing their Medium Term Financial Strategies should consider the establishment and maintenance of reserves. Resources set-aside for specific purposes reserves should be established and used in accordance with the purposes intended. The minimum level of new reserves and provisions is set at £20,000 unless these relate to amounts held in trust all reserves are reviewed at least twice a year. The Constitution and Financial Regulations require that any reserves which are established are monitored and used in accordance with statutory financial guidelines. For each reserve there needs to be a reason for / purpose of the reserve and details of how and when the reserve can be used. RESERVES Reserves are set aside by the Council to meet future expenditure such as decisions causing anticipated expenditure to be delayed. As such they are only available to be spent on specific purposes. The categories of earmarked reserves are as follows:

Category and Description INSURANCE AND TAXATION Assessed liabilities including potential cost of meeting outstanding Insurance Fund claims, Business Rates appeals, etc. TRANSFORMATION Support the development and transformation of the Council which includes the investment to deliver future savings and one-off workforce reduction costs SCHOOLS RELATED Balances and sums for school-related services which can only be used by schools and not available to pay for Council services SUPPORT SERVICE ACTIVITIES AND PROJECTS Includes Government Grant funded schemes when the grant is received and spend incurred in the following year such as Public Health and the sums held are earmarked for the completion of Council programmes such as Community Asset Transfer, planned maintenance and parks improvements

The Annex to this statement provides details of the reserves which are no longer required and can be released. RELEVANT RISKS Regular Balance Sheet management is required to ensure that the authority has a sufficient level of funds to cover any future liabilities whilst being able to release any funding not required back to the General Fund for use in funding services and/or reducing Council Tax levels.

The setting and justification of provisions and reserves is a key element of the Councils financial process. At the start of 2016/17 the Council held over £73.9 million in earmarked reserves, prior to any release or use of reserves. COUNCIL AGREEMENT ON THE LEVEL OF EARMARKED RESERVES The release of £9.2 million of Reserves was agreed. That the released Reserves be added to General Fund Balances to support the Revenue Budget.

REVIEW OF RESERVES AS AT FEBRUARY 2017 Annex 1 Summary of Reserves

Reserve Category 2015/16 Balance Predicted Use Amount to be

released £ £ £ Insurance & Taxation 26,375,520 18,175,520 8,200,000 Transformation 11,657,256 11,657,256 0 Schools 14,858,824 14,858,824 0 Support 21,024,565 19,984,039 1,040,526 Total 73,916,165 64,675,639 9,240,526

Reserves to be Released

Reserve Category Brief Description 2015/16 Balance

Predicted Use

Amount to be

released Comments on released reserves

£ £ £

Insurance & Tax Insurance Fund 10,867,459 8,367,459 2,500,000 Release based on assessment of demands on the Fund.

Insurance & Tax Housing Benefits 5,204,350 4,204,350 1,000,000 Release of sums held pending Audit as claims now completed.

Insurance & Tax Business Rates Equalisation 10,303,711 5,603,711 4,700,000

Release following latest review of income for 2017/18. Risk that insufficient resources to meet loss of Rates income.

Insurance & Tax Total 26,375,520 18,175,520 8,200,000

Reserve Category Brief Description 2016/17 Balance

Predicted Use

Amount to be

released Comments on released reserves

£ £ £ Support Children's Centre Income Reserve 6,548 - 6,548 Cover by Bad Debts Provision. Support Housing Renovation Loan

Repayments (Home Improvement Fees)

308,806 186,000 122,806 Cover by alternative funding in the Capital programme.

Support Environmental Health 21,601 - 21,601 Surplus to requirements. Support

Grounds Maintenance and Utilities 124,658 74,658 50,000 Minor use and service agreed to release of amount.

Support Wirral Home Improvement Agency 295,269 150,000 145,269 Amount reserved for service pilot with the balance released.

Support Neptune, New Brighton 18,333 - 18,333 Works completed, balance released. Support Challenge Fund Properties 205,418 100,000 105,418 Element offered after review. Support Housing Stock Surveys 17,900 - 17,900 Future requirements to be funded from

capital programme. Support Planned Preventative Maintenance 311,000 155,000 156,000 Expected to be spent in 2016/17.

Element released in 2016/17. Support Environmental Health – Backfills 46,000 - 46,000 Surplus to requirements. Support Trading Standards – Backfills 17,000 9,000 8,000 Surplus to requirements. Support Coroner’s Office 38,177 - 38,177 Reserve not used in 2015/16 or 2016/17

so released. Support Asset Management - Asset Review 210,629 40,000 170,629 Element offered after review. Support Asset Management - Planned

Maintenance 219,355 100,000 119,355 Element offered after review.

Support Wirral Emergency Volunteers 29,490 15,000 14,490 Element offered after review. Support Total 1,870,184 829,658 1,040,526

COUNCIL TAX INFORMATION For 2017/18 Wirral Council set a Council Tax requirement of 127,430,400. This is the amount of money required to be collected from council taxpayers to support planned spending on Council services after taking account of all Government support and all other forms of income. From 2017/18 onwards the Government will no longer pay Revenue Support Grant to the councils of the Liverpool City Region, including Wirral; these councils will retain most of the business rates, together with a Rates Top-up grant and other direct funding from the Government. These changes have been incorporated into the calculation of Wirral’s Basic Council Tax for 2017/18. Wirral Council Referendum Calculation The Government required Councils to hold a Referendum with local residents if they proposed to increase Council Tax by 4.99% or more in 2017/18. The calculation used to determine this % rise is set by the Government and includes a 3% element to fund increasing costs of adult social care. Because Wirral Council proposed an increase of 4.99% compared to the 2016/17 level on its share of Council Tax, a Referendum was not required. Wirral – Basic Amount of Council Tax 2016/17 2017/18 Change £ £ £ Band D 1,329.26 1,395.59 66.33

Wirral Council Tax by Valuation Band 2017/18 Valuation Band

Wirral Services

Police & Crime Commissioner

Fire & Rescue Services

Total

£ £ £ £ A 930.40 110.65 49.56 1,090.61 B 1,085.46 129.09 57.82 1,272.37 C 1,240.53 147.53 66.08 1,454.14 D 1,395.59 165.97 74.34 1,635.90 E 1,705.72 202.85 90.86 1,999.43 F 2,015.85 239.73 107.38 2,362.96 G 2,325.99 276.62 123.90 2,726.51 H 2,791.18 331.94 148.68 3,271.80

Council Tax Precepts Demand on Collection Fund Services 2016/17 2017/18 £ £ Wirral Council 120,274,332 127,430,400 Police Commissioner 14,730,450 15,154,640 Fire & Rescue Services 6,595,226 6,787,948 Total 141,600,008 149,372,988

Comparison of Wirral’s Band D Equivalent Council Tax (England) Year WIRRAL ENGLAND Band D Increase Band D Increase £ % change £ % change 1993/94 690.15 - 567.95 - 1994/95 683.54 -0.96 580.11 2.14 1995/96 747.35 9.34 609.00 4.98 1996/97 792.18 6.00 646.00 6.08 1997/98 857.93 8.30 688.00 6.50 1998/99 913.99 6.53 747.00 8.58 1999/00 977.00 6.89 798.00 6.83 2000/01 1,030.72 5.50 847.00 6.14 2001/02 1,077.24 4.51 901.33 6.41 2002/03 1,077.24 0.00 975.56 8.24 2003/04 1,151.46 6.89 1,101.75 12.94 2004/05 1,175.16 2.06 1,166.56 5.88 2005/06 1,221.96 3.98 1,213.81 4.05 2006/07 1,276.60 4.47 1,267.91 4.46 2007/08 1,329.94 4.18 1,321.32 4.21 2008/09 1,378.65 3.66 1,373.08 3.92 2009/10 1,440.16 4.46 1,413.84 2.97 2010/11 1,464.20 1.67 1,439.22 1.80 2011/12 1,464.20 0.00 1,439.33 0.01 2012/13 1,471.18 0.48 1,444.13 0.33 2013/14 1,500.59 2.00 1,455.62 0.80 2014/15 1,504.96 0.29 1,467.94 0.85 2015/16 1,509.41 0.30 1,483.92 1.10 2016/17 1,564.95 3.68 1,529.52 3.07 2017/18 1,635.90 4.53 1,590.51 3.40

Comparison of Wirral’s Band D Equivalent Council Tax (Liverpool City Region) 2016/17 2017/18

Excluding

Precepts Including Precepts

Excluding Precepts

Including Precepts

£ £ £ £ Halton 1,250.97 1,484.06 1,312.27 1,550.00 Knowsley 1,295.80 1,531.49 1,360.46 1,600.77 Liverpool 1,439.77 1,675.46 1,511.61 1,751.92 Sefton 1,370.17 1,605.86 1,438.54 1,678.85 St Helens 1,261.76 1,497.45 1,324.72 1,565.03 Wirral 1,329.26 1,564.95 1,395.59 1,635.90

Council Tax Base 2017/18 The Authority is required to annually (by 31 January) determine its Council Tax Base for the following financial year. This is in order to determine the appropriate levels for Wirral, the Precepting Authorities (Police Commissioner and Fire and Rescue) and the Environment Agency (Flood Defence). Wirral’s Council Tax Base was reported to Cabinet on 8 December 2016 and agreed by Council on 6 March 2017. The table shows the actual number of properties which are converted to the Band D equivalent and adjusted for the Local Council Tax Support Scheme and other Council Tax Discount, Exemptions and Disabled Relief and then by the Collection Rate to give the Council Tax-Base:-

Band Properties 2016

Changes due to C Tax Support, discounts, exemptions

Revised property equivalent

Ratio to Band D

Net Band D

equivalent

A 60,062 -25,687.4 34,374.6 6/9 22,916.4 B 32,275 -7,543.0 24,732.0 7/9 19,236.0 C 27,124 -4,209.6 22,914.4 8/9 20,368.4 D 13,290 -1,492.4 11,797.6 9/9 11,797.6 E 8,121 -707.1 7,413.9 11/9 9,061.4 F 4,254 -321.1 3,932.9 13/9 5,680.9 G 3,099 -207.9 2,891.1 15/9 4,818.5 H 262 -33.1 228.9 18/9 457.8 Band A Disabled

(1/9th of Band A) 71.5 71.5 5/9 39.7

Total 148,487 40,130.1 108,356.9 94,376.7 Collection Rate x 96.75% Adjusted Council Tax-Base 91,309.5

The Collection Rate for 2017/18 takes into consideration previous experience and current collection rates. The Collection Rate of 96.75% reflects actual projections for the current year. The Collection Rate reflects collection over more than just the current year and will therefore take longer than the financial year to achieve. All previous year collections have ultimately met or exceeded projections and this rate should be achieved for 2017/18. The Council Tax base for 2017/18 is 91,309.50. This compares to a 2016/17 figure of 90,481.90 and is an increase of 827.6.

BUSINESS RATES INFORMATION Business Rates are payable by businesses based on the rateable value of the premises they occupy, which is calculated according to how much rent the premises would achieve if rented out. Valuations are carried out by the Valuation Office Agency on a five year cycle; the latest valuation list will apply from 2017. The Council is responsible for calculating actual rates bills and for collecting rates and use the rateable value in working out how much a business will have to pay. The actual rates bill is calculated by applying the rate multiplier (a rate in the pound) to the rateable value and then deducting any reliefs that are applicable. From 2020 all councils in England will retain all Business Rates as General Government funding of local government will cease with the ending of Revenue Support Grant. Differences in the ability to raise funding from local taxation and the need to fund services in a local area are being addressed by a series of working groups by the Department for Communities and Local Government and the Local Government Association. Wirral along with other Councils in the Liverpool City Region are participating in a pilot of the 100% retention of Business Rates from 2017/18. Wirral, and the other councils in the region, will cease to receive any Revenue Support Grant from central government in 2017/18 with the loss of grant being compensated by the retention of Business Rates raised in 2017/18 plus a Rates Top Up grant to ensure that there is no detriment to Wirral’s funding resulting from the pilot scheme. Whilst presenting opportunities the localisation of Business Rates brings additional risks to the Council’s financial position because of its complexity and volatility. The forecast income to the Council has to be reflected in the Council Budget. The amount received may fluctuate due to a number of reasons including:

• Appeals against rating decisions. Dealt with by the Valuation Office Agency and can be large and backdated a number of years.

• Changes in liability relating to changes in occupancy. • Changes in building use. • Alterations to buildings size and layout. • Demolitions and new builds. • Actions to avoid full liability including empty property / charitable reliefs. • Assessment of bad and doubtful debts.

Business Rates are managed through the Collection Fund with any surplus / deficit in 2016/17 being allocated to Central Government 50%, to Wirral Council 49% and to Merseyside Fire and Rescue Service 1%. .From 2017/18 Wirral will retain 99% with Merseyside Fire and Rescue Service receiving 1%. A declaration of an estimated surplus or deficit for the 2016/17 financial year together with a forecast for 2017/18 had to be submitted to the Government by 31 January 2017. The forecast Business Rates income for 2017/18 shows that the receipts to the Council will increase by £2.1 million from the 2016/17 levels.

COLLECTION FUND SUMMARY The Collection Fund is administered by the Council to record all income from local taxpayers and business ratepayers. The following shows how this is passed to other public bodies on Merseyside. A decision on the distribution of the Collection Fund surplus was notified to the precepting bodies at the end of January 2017. BACKGROUND The Council is required to maintain a Collection Fund to record the Council Tax and National Non-Domestic Rates collected and paid to the precepting authorities. Council Tax Council Tax collected is paid to the precepting authorities based upon their initial precepts, with any surplus / deficit after the end of each financial year paid to / recovered from the precepting bodies. Council Tax income (including transferred from the General Fund) currently exceeds £146 million per annum. In January 2016 the forecast Collection Fund 2015/16 resulted in a surplus of £3.6 million, which was distributed to the precepting bodies. The actual Council Tax Collection Fund position at 31 March 2016 was better than this with a surplus of £5.1 million, of which Wirral is entitled to 85% of the total distribution. The in-year surplus is primarily due to additional Council Tax receipts from increases in the Council Tax Tax Base through additional chargeable property (including less properties receiving discount or exemptions), increasing beyond previous forecasts. Any shortfall against predicted income will impact upon the Collection Fund balance and subsequent surplus/deficit position. In it’s forecasting of Council Tax income the authority must take account of likely payment levels and any issues arising from the Local Council Tax Support Scheme or other policies. Any surplus or deficit on the Fund must be shared pro-rata to the existing precepts on the Fund. Based upon the 2016/17 precepts and taking the above factors into account the Collection Fund balance for the year ending 31 March 2017 in respect of Council Tax is estimated to be a surplus of £4.62 million. This will be allocated to precepting bodies as follows:-

Precepting Body % share £m Wirral Council 84.94 3.92 Police & Crime Commissioner for Merseyside 10.40 0.48 Merseyside Fire and Rescue Service 4.66 0.22 Total 100.00 4.62 National Non-Domestic Rates (NNDR) Under the Local Government Finance System arrangements introduced from 1 April 2013, billing authorities retain a proportion of locally raised business rates and either pay a tariff or, as in Wirral’s case, receive a top-up to ensure a comparable starting position with the previous funding system. From 1 April 2017 the Liverpool City Region authorities (including Wirral) are to take part in a DCLG pilot 100% rate retention scheme. A declaration of an estimated surplus or deficit for the 2016/17 financial year must be submitted to the DCLG by 31 January 2017. Any surplus or deficit will be allocated in the proportions in the following table. Under the rules in place for 2016/17 Wirral receives 49% of the surplus. In future years under the 100% Business Rates Retention Pilot Scheme arrangements Wirral will receive or be liable for 99% of any surplus or deficit. Recipient Body % share Wirral Council 99 Central Government 0 Merseyside Fire and Rescue Service 1 Total 100 The NNDR Collection Fund position as at 31 March 2016 was a deficit of £5.3 million. This figure was higher than anticipated due to the substantial increase in the provision for refunds from appeals. Wirral, like most billing authorities, received an unprecedented number of appeals immediately prior to the deadline of 31 March 2015 for submitting backdated claims to April 2010. The Valuation Office Agency which is responsible for rating and subsequent appeals has a large backlog of appeals to process and in terms of outstanding amounts there has been little movement since March 2016. Although many appeals are likely to be speculative, this has resulted in the requirement to maintain a provision for the possible cost of settled appeals. There has been a sizeable increase in the amount of NNDR billable by the Authority in 2016/17. A budgeted contribution has also been made in 2016/17 to settle the forecast element of the 2015/16 deficit. Taking these factors into account it is currently estimated that the NNDR Collection Fund at 31 March 2016 will be in a surplus position by approximately £1.4 million. The forecast is still being finalised as explained below.

NNDR is a particularly complex and volatile tax area that can fluctuate due to a number of reasons including:-

• Appeals against rating decisions which are dealt with by the Valuation Office Agency and which can be large and backdated for a number of years.

• Changes in liability relating to changes in occupancy. • Changes in building use. • Alterations to buildings size and layout. • Demolitions and new builds. • Actions to avoid full liability including empty property and charitable reliefs. • Assessment of bad and doubtful debts.

The Authority has provided to the DCLG by 31 January 2017 the forecast surplus/deficit position for 2016/17 and a forecast of predicted income for 2017/18. Besides the issues highlighted there are two significant changes applicable from April 2017 being the national revaluation which includes transitional relief arrangements and that Wirral is part of the Liverpool City Region 100% Business Rates Retention Pilot Scheme. It was recommended that the final NNDR surplus/deficit forecast for 2016/17 and the 2017/18 initial estimate be made via a delegated decision of the Leader in conjunction with the Assistant Director: Finance (Section 151 Officer). This is because of a number of factors. FINANCIAL IMPLICATIONS Based on the estimated Collection Fund Council Tax position at 31 March 2017 Wirral Council will receive a payment of £3.92 million in 2017/18. The Police & Crime Commissioner for Merseyside will receive £0.48 million and Merseyside Fire & Rescue Service £0.22 million. Based on the current Collection Fund NNDR forecasts Wirral will receive payment of £0.7 million in respect of its share of a 2016/17 surplus position. LEGAL IMPLICATIONS Under the Local Authority (Funds) (England) Regulations 1992, the Authority must annually estimate the likely surplus or deficit on its Collection Fund for 2016/17 and notify the precepting Authorities of the Fund by 22 January 2017. The Non-Domestic Rating (Rates Retention) Regulations 2013 (SI 452) requires the billing authority to estimate the surplus or deficit for business rates and notify the Secretary of State and precepting authorities on or before 31 January each year.

RELEVANT RISKS In estimating the end of year position on the Collection Fund the actual position could be either a deficit position, requiring recovery from the precepting authorities in 2017/18, or a larger surplus requiring to be distributed during 2017/18. To mitigate the risks, the estimate takes account of past performance and current known collection levels. The introduction of Business Rates Retention has passed increased risk to local authorities as outlined in the report. Reductions in income including those arising from appeals relating to past years will now partially fall on the authority (and almost entirely from April 2017). There may also be opportunity to share in any increased income where collection is above forecast amounts. ENGAGEMENT / CONSULTATION The Merseyside Police and Crime Commissioner for Merseyside and Merseyside Fire and Rescue Service were informed of their share of the declared surplus by 22 January 2017. COUNCIL AGREEMENT ON THE COLLECTION FUND The declaration of an estimated £4.62 million surplus balance position for the Council Tax proportion of the Collection Fund for the year ending 31 March 2017 was notified to the precepting bodies. Wirral’s share is £3.9 million. The declaration of the 2016/17 National Non-Domestic Rates (Business Rates) position and 2017/18 initial forecast was made by the Leader in conjunction with the Assistant Director: Finance (Section 151 Officer) before, 31 January 2017. This was a £1.4 million surplus in 2016/17 of which Wirral’s share would be £0.7 million. That the Council share of the ‘one-off’ distribution from the Collection Fund, of £4.6 million be added to the General Fund balances for use in supporting the General Fund budget.

SUPPORT, MANAGEMENT AND BUILDINGS RECHARGE BASES 2017/18 The Council in 2016/17 has reviewed and revised its approach to support services recharges. The main revisions have been an updating and revision to the basis on which recharges are calculated (see below) and a review of service recharges including the development of relevant basis of apportionment. Charge Basis of Apportionment Support Service Charges Financial Services – Core

Staffing time/cost per accountancy team plus equivalent proportion of central/reconciliation team. This recharge is split over all cost centres that receive the service based on Gross Budget.

Financial Services – Children’s

Split budget based on Children’s Gross Budgets (Excluding Schools)

Audit

Recharge on days as % of total days in the Audit Plan.

Human Resources/OD/Trade Union

Split over cost centres based on staff head count as at September 2016.

Procurement Split over cost centres based on number of PO Transactions over 12 months from October 2015 to September 2016.

Legal Services

Analysis of what each employee on the team does to establish percentage for each service. Then split down to cost centre based on Gross Budget. Notionally based on timesheets.

ITS Infrastructure Line of Business

Split over cost centres based on APT&C Staff FTE Numbers at September 2016.

ITS Business Change

Split over cost centres based on APT&C Staff FTE Numbers at September 2016.

One Stop Shops Analysis of time spent on dealing with different types of queries over a 12 month period from October 2015 to September 2016.

Transaction Centre Business Support Business Support Secretarial & Admin Scanning & Post

Split over cost centres across the Authority based on Gross Budget

Payments Out Creditors

Split over cost centres based on number of Accounts Payable Transactions over 12 months from October 2015 to September 2016.

Payroll Split over cost centres based on staff head count as at September 2016.

Income & Debt Debtors

Split over cost centres based on number of Accounts Receivable Transactions over 12 months from October 2015 to September 2016.

Income

Split over cost centres based on number of Income Transactions over 12 months from October 2015 to September 2016.

Customer Transaction Call Centre

Analysis of time spent on dealing with different types of queries over a 12 month period from October 2015 to September 2016.

Admin Buildings Admin Buildings

Split over cost centres based on APT&C Staff FTE Numbers at September 2016, provided by Phil Ashley.

Other Interdepartmental Recharges Grant Adaptation Team Recharge to Adult Social Services based on Budget. Architect's Recharges Hourly rate plus percentage on cost.

FEES AND CHARGES SUMMARY As part of the budget fees and charges have been reviewed. The Council maintains and publishes a comprehensive Directory of Fees and Charges. Link to Directory: https://www.wirral.gov.uk/about-council/performance-and-spending/fees-and-charges BACKGROUND INFORMATION REVIEW OF CHARGES FOR 2017/18 Wirral receives income to pay for its services from a number of different sources including: • Grants from central government • Grants from other public bodies • Council Tax and Business Rates • Fees and Charges Wirral provides a wide range of services; some free to users and some charged for. The income from the charged-for services is a key resource to support the funding of services and generates over £40 million per year. Charges are set with the framework of the Medium Term Financial Strategy, the charging policy and legal requirements. Fees and charges for statutory services are often set subject to national guidelines. There may be circumstances where the charge is set to manage demand or deter certain behaviour, such as litter fines. The remaining charges for services are discretionary in nature, covering a wide range of services such as Pest Control and Leisure Centres. The Budget proposals included recommendations for fees and charges for 2017/18 following reviews by all service managers. Whilst many fees and charges are unchanged from 2016/17 a number have changed resulting from new legislation or from savings already agreed and have been included in the Directory. A comprehensive Directory of Fees and Charges containing a description of the charge, VAT status and the level of charge in 2017/18 and previous years is held on the Council web-site and updated annually. See the link above for full details. In general the Council is seeking to cover the full cost of providing services and where it is possible to do so, and in line with the Council’s service priorities, the aim has been to move to full cost recovery.

https://www.wirral.gov.uk/about-council/performance-and-spending/fees-and-charges

https://www.wirral.gov.uk/about-council/performance-and-spending/fees-and-charges

To enable changes to be implemented as soon as possible to maximise income generation delegated authority has been agreed for the relevant Director in consultation with the relevant Portfolio Holder and Assistant Director: Finance (Section 151 Officer) to vary existing fees and charges. Whilst there is an annual review as part of the budget setting process this delegated authority enables a more timely response to changes in the commercial climate and maximises the benefit to the Council financial position. RELEVANT RISKS Whilst budgets for income from fees and charges are set with regard to whether they are statutory or discretionary, the achievement of income targets can be influenced by a number of factors including the local economic situation. These factors are mitigated by keeping charges under constant review and amending budgets where required to reflect what is deemed achievable. EQUALITY IMPLICATIONS Increases in fees and charges may impact upon certain groups such as those on lower incomes. Policies to offer discounts or apply means tests will help to mitigate these impacts. The implications of specific charges will be addressed by the relevant Directors when implementing any changes. COUNCIL AGREEMENT ON FEES AND CHARGES Delegated Authority was given to the Section 151 Officer to update the Council’s Fees and Charges Directory prior to publication before 1 April 2017. Agreed to delegated authority to the relevant Director in consultation with the relevant Portfolio Holder and Assistant Director: Finance (Section 151 Officer) to vary existing fees and charges. Approval of the policy for fees and charges as detailed in Annex 1.

Annex 1 Pricing and Charging Policy Introduction The setting of fees and charges is important as it determines who pays for what and what services the Council will subsidise. The aim of this policy is to provide guidance on the setting of fees and charges. This policy is a framework as well as it gives details of what needs to be considered when reviewing charges. The purpose of this document is to:

• Give a consistency and cost effective approach to charging. • Set out the factors that need to be considered i.e. factors to be considered

when reviewing. This document covers the following

• Scope of Charging • Reviewing Charges • Factors to consider in an annual review • Concessions

Scope of Charging The Council will charge for services except where there is a clear and formal decision not to do so. Overriding Principles when setting Charges

• To set charges at a level that achieves both optimum take-up and maximisation of income to the Council.

• Charges raised should be sufficient to cover the full cost of providing the service in question. The total cost should be based on the direct costs of service provision including staff, supplies and services etc. plus support service costs.

• Where this is not possible the reason for not doing so the subsidy to the service by the Council Taxpayer should be justified in terms of how this will achieve the Wirral Plan and the 20 Pledges.

Reviewing Charges For all services a review of charges should be undertaken at least annually. This can be as part of the budget setting /process. This should fit in with service objectives, changes in markets that services operate in, changes in customer inclinations and budgetary pressures.

A record of all services reviews should be maintained i.e. records, supporting evidence to justify the decisions made. Factors to consider in an annual review The review of charges should consider the following:

• Inflation – All charges should increase at least in line with inflation. The reasons for doing so should be known, specified and recorded.

• Competition – The actual or potential consequences of any service

competitors on service use of any change in prices should be assessed.

• Take up of the Service- The trend in the use of the service i.e. current take up and potential take up of the services may be affected by changes in charges.

• Budget requirements- The requirements of the Medium Term Financial

Strategy and the need to make budgetary changes.

• Costs – Services are expected to cover costs wherever possible. A potential change in charges should assess how far a service has reached this objective.

• The use of Alternative/Flexible Charging Structures - The use of alternative

charging structures should be considered especially if they are more effective in delivering income. This may include an assessment of the effectiveness of the use of alternative charging in the past. For certain services differential charging, promotional charging, flexible charging (i.e. charges for a standard/premium service, fast/high quality service), frequent user discounts should be considered.

• The method and the cost of income collection - How much is the costs of

collection when assessed against the income generated. Concessions Concessions should only be offered to help achieve specific Wirral Plan objectives and 20 Pledges.

CABINET 20 FEBRUARY 2017 BUDGET RESOLUTION 2017/18 NATIONAL CONTEXT This Budget is being prepared in the most difficult financial position this Council has ever found itself in. We believe Local Government, and the services residents rely on, has been under attack from the Conservative Government’s austerity agenda for almost seven years. We believe their vision is of a country where residents are left to fend for themselves. The removal of the Revenue Support Grant is, in the opinion of this Cabinet, a shameful and dangerous dereliction of duty which hits the young, the elderly and the most vulnerable the hardest. This alternative Tory reality is one where local services are only funded by Council Tax, business rates and fees and charges Council can generate. This is great for the wealthier boroughs, but terrible for those who – in the words of the Prime Minister – are Just About Managing. The City of Westminster Council, for example, will do very nicely from these policies. Collecting business rates from the HQ’s of multinational companies and raising Council Tax on multi-million pound homes and apartments, they are surely counting down the days until they are able to retain all of this income for themselves – a move which adds £1.8 BILLION every year to their bank balance. Wirral, on the other hand, with an ageing population and areas of real deprivation and need, will lose £6 million a year, money which could have funded improvements to highways and street lighting, added extra social workers, and supported efforts to clampdown on antisocial behaviour. We will continue to lobby the Government to address this imbalance through a fairer distribution of funding. Even Conservative Council leaders warned the government about failing local services – but, predictably, they received a very different response from Whitehall. Upon learning of Surrey County Council’s plans to prop up services through a 15% Council Tax hike the Government intervened with a secret sweetheart deal for their friends in the South. Where is Wirral’s deal? Where is Wirral’s support? Where are we to find the money to tackle anti-social behaviour, improve skills and training for our young people, and support vital services?

This Administration has lobbied Government for Wirral and the rest of our region to be treated fairly. It cannot be right that while Westminster is counting their billions, Wirral and our City Region colleagues are left to pinch the pennies. Either we are in this together, or we are not. Cabinet proposes that we continue to lobby the government to introduce a fair system of local government funding which recognises the needs of authorities such as Wirral. It is absolutely worth noting, that while this Cabinet has been fighting for Wirral - calling on Government to fund local services - Wirral’s Conservative Party remained silent. For a party so quick to call special meetings and adopt posture politics, no petition or lobby from them to secure a fair deal for Wirral. SOCIAL CARE IN CRISIS Nowhere is the Tory’s failure more apparent than the crisis in social care and health. We are seeing huge waiting lists for hospital and GP appointments, people being treated on trolleys in corridors, and councils across the UK struggling to afford even basic support for the most vulnerable. This is not acceptable in a modern Britain. Cabinet believes the Government failed to address the social care crisis in the recent Autumn Statement. The Local Government Association reported that adult social care faces a funding gap of £2.6 billion by 2020, a deficit of £60 million across health and social care here in Wirral. Locally, social care providers, charities and the NHS have united to call for more investment. The Government’s response was to pass the problem on to council taxpayers. We have little choice other than to implement the Government’s 3% Care Tax levy, even while knowing this places the burden at the feet of those people least able to pay. The crisis in social care can no longer be ignored. Council has called for an urgent meeting with the Secretary of State for Health to put Wirral’s case forward. THE WIRRAL CHALLENGE Wirral is forced to reduce its spending, or generate more income, by at least £130 million by 2021. Our immediate challenge is to meet a £45 million funding shortfall for 2017/18. This is happening at a time of increased need - an ageing population, deprived communities with complex needs - and rising costs of the services and support which people rely on.

Cabinet believes these reductions to be unfair and unsustainable. However, as residents know, we refuse to allow this Government to break the services our residents rely on. We will make these difficult decisions but will deliver the 20 Pledges we committed to in our Wirral Plan. A COLLABORATIVE BUDGET We will never set a budget in isolation. Consultation, engagement, and conversations with residents will always underpin every decision we take. Cabinet thanks Elected Members – of all parties – who took part in the comprehensive scrutiny process to look in detail at the budget proposals. The feedback from that process has been provided to Cabinet and has proved extremely helpful in making these difficult decisions. DELIVERING OUR PLEDGES Regardless of the scale of Conservative Government cuts to this Council’s budget, we are a Labour Administration and our budget will be legal and sustainable, with social justice and fairness at its heart. Our ethos as an Administration is underpinned by three core principles. These principles help inform our budget and makes sure we can deliver the savings imposed on us while still meeting our promises to Wirral residents. The vulnerable are safe and protected and we tackle inequality. Wirral is a place where employers want to invest and businesses thrive. We have an attractive and sustainable environment, where good health and

an excellent quality of life is enjoyed by everyone who lives here. We are now almost two years into our five-year Wirral Plan. There is still more to be done, but we have made a good start towards meeting our 20 Pledges to improve the health, wealth and quality of life enjoyed by Wirral residents. I am proud of our achievements so far. These include:- More than 200 new jobs have been created through our work to support local

businesses, with new developments such as the Contact Company HQ and the new Wirral Metropolitan College Campus opening their doors this year.

The state-of-the-art, £6 million new Wirral Youth Zone – the Hive – will soon open its doors, providing our young people with youth services of the very highest quality.

We have safeguarded jobs and enabled new, innovative services to be developed for schools and people with disabilities, through our two new companies – Edsential and Wirral Evolutions.

Our Zero-Tolerance policy towards litter and dog fouling is paying huge dividends, with more than £250,000 in fines being issued to the irresponsible people who vandalise our environment.

We have improved almost 2,000 homes to help older people live more independently and safely, and have brought more than 500 empty properties back into use.

Next year, we will invest more than £260 million into improving residents’ lives – protecting the vulnerable, improving our environment and driving economic growth. Safeguarding Vulnerable Children We reaffirm that safeguarding vulnerable children remains this Administration’s top priority. Our improvement work following the OFSTED inspection continues at pace. We received encouraging feedback from Ofsted following their first monitoring visit since the report was published. We will be investing to transform children’s services, in addition to the £2 million invested in the current year to recruit more social workers, improve management and strengthen the service at all levels. Growing our economy We will be relentless in our drive to grow Wirral’s economy. The International Golf Resort in Hoylake, our plans to transform Birkenhead, the support we will continue to provide to local high streets and employers through our partnership with Wirral Chamber of Commerce will help create thousands of jobs for local people in the coming years. Wirral Apprenticeship Programme As part of this drive, it is vitally important residents have the skills to excel in their careers. I am therefore delighted to announce a new investment of £150,000 in creating a Wirral Apprenticeship programme with starting salaries at the level of the Living Wage, and ask officers to immediately commence work on creating these opportunities. Improving the environment It is also important we enable local communities to direct resources at those things most important in their neighbourhood. Often, communities take direct action, coming together to clean up and improve their areas. To help, this budget will allocate £50,000 to support communities to enable this work, to be allocated through

our constituency committees. These initiatives can therefore continue pending the review of the role of constituency committees. Cabinet also expects any underspends within Constituency Committee budgets to be used in 2017/18. Investing in Street Lighting We will continue to invest in local infrastructure. I am pleased we are investing more than £4 million to improve our highways and make our roads safer. Following our multi-million investment in installing LED lights in key locations throughout the borough, I am pleased this new infrastructure investment also allocates a further £500,000 to improve our street lights. Tackling Anti-Social Behaviour In some parts of the borough, anti-social behaviour remains a blight on people’s lives. As part of our Transformation Programme, we have been innovative and imaginative in adopting approaches to tackle this issue; creating the first integrated community safety hub in the region where council and police staff work hand-in-hand to keep residents safe. DIFFICULT DECISIONS Having made cuts of almost £200 million from our budget since 2010, and losing the Revenue Support Grant by 2020, we are inevitably faced with difficult decisions about how to provide services now and in the future. We have to look at the services and outcomes residents need, but also think about how we will be able to deliver them going forward. To minimise impacts on residents, we are proposing rolling out savings across four years. Even to do this, we had to seek Government approval first and, of course, they set conditions. To keep our income at current levels we must implement Annual Council Tax rises of 1.99%, add the additional 3% Care Tax levy towards the cost of adult social care. Our Budget proposals for the next 4 years will be based on 3 key themes: Delivering Differently: Whilst setting an annual Budget planning over four years buys time, and allows us to develop a major, fundamental redesign of how the council works and which services it provides. Achieving change of this scale is complex and takes time, but I am committing Wirral Council to deliver a complete redesign of every service by 2020. Detailed proposals for each area will be produced throughout the year as we seek to create modern, fit for purpose, sustainable services which meet the needs of our residents. A key element of this work will involve us looking at a range of alternative delivery models.

Income & Resources: We will focus on doing better with the money we have, becoming more commercial and increasing the revenue we receive from Council Tax, Business Rates and general fees and charges. Service Changes & Reductions: This will be the last resort, with very minimal direct service cuts and instead reductions in senior management and higher paid staff. CAR PARKING This Cabinet talked to residents and businesses throughout Wirral. It is clear the proposals originally put forward underestimated the potential impact on local businesses. For clarity, the original proposals regarding car park charges have been removed in their entirety. They have been replaced with a 20p increase in standard car park tariffs and a 50p charge at country parks for parking one-hour, £1 for 2 hours, or £2 all day. We will continue to work with residents and businesses to make sure our country parks, and the organisations within them and associated with them, are able to thrive. The income generated through parking will be used to maintain the parks and ensure they remain a source of huge pride for residents. We listened to local people, and I am pleased our new proposals have been welcomed by residents and business alike. COUNCIL TAX Councils in the UK are being forced to contemplate huge Council Tax rises, forcing residents to pay more for services. Cabinet believes it is unacceptable for the Government to simply pass the bill for the growing pressures in adult social care back to the most needy and say: “If you want the services, you will have to pay for them.” Often the very reason they need social care support from the local authority is because they are unable to pay for it themselves. We want to secure the best outcomes for residents, so Cabinet therefore proposes to increase Council Tax by 1.99% for the coming financial year, and to implement the Adult Social Care Precept of 3%. Overall, this works out at an increase of just over £1 per week for the average Band D property. CONCLUSION Once again, this budget has been extremely difficult. Seemingly endless cuts in funding and a lack of support from Central Government require this Council to make

tough decisions. This Government, and their colleagues in the Local Conservative Party, are letting down the residents in this borough. I am proud this Labour Administration has once again delivered on its promises to the people of Wirral – taking tough decisions in setting its budget, identifying innovative solutions and getting on with the job of delivering our 20 Pledges to create a better Wirral for all of our residents. Finally, Cabinet wishes to recognise the excellent work of our staff who, in spite of the savage cuts in our budget, have continued to deliver high quality public services for the people of Wirral. RECOMMENDATIONS 1 Cabinet, having had regard to the responses to the proposals announced at

the 8 December 2016 meeting recommends to Budget Council for approval:- Revenue Budget (Agenda Item 6A)

a) The proposals for 2017/18, detailed in Appendix 1, be agreed with the change to the car parking proposals which reduce the projected income by £460,000.

b) The Growth 2017/18, detailed in section 3.29 to 3.35, be agreed with

the addition of £150,000 for Apprentices and a fund of £50,000 to provide for community clean-ups.

c) The fees and charges, as in Appendix 2, with delegated authority being

(i) given to the Section 151 Officer to update the Council’s Fees and Charges Directory prior to publication before 1 April 2017; (ii) given to the relevant Director in consultation with the relevant Portfolio Holder and Section 151 Officer to vary existing fees and charges and (iii) approval of the Pricing and Charging Policy as set out in Annex 1.

d) The level of General Fund Balances being recommended, as set out in

Appendix 3, as continuing to be based on a locally determined approach based on an assessment of the financial risks that the Council may face in the future and that the Council maintains balances at, or above, this level.

e) The use of General Fund Balances, if required, to fund the financial

consequences of the finalisation of the Local Government Finance Settlement.

f) The release of reserves, as set out in Appendix 4, to General Fund

Balances to support the Revenue Budget.

g) The Chief Financial Officer Statement regarding the robustness of the

estimates made for the purpose of the Budget and the adequacy of the General Fund balances and reserves at Appendix 6.

h) Endorsement of Wirral being part of the Liverpool City Region 100%

Business Rates Retention Pilot Scheme as set out in the Memorandum of Understanding at Appendix 7.

Capital Programme and Financing (Agenda Item 6B)

a) The new bids as detailed in Appendix 2.

b) That any new bids supported by grant funding do not commence until

written confirmation has been received from the granting authority.

c) The Capital Programme 2017/20 (as detailed in Appendix 3).

d) That progress on delivering the Capital Programme is presented in accordance with the agreed Capital Monitoring arrangement.

Medium Term Financial Strategy (Agenda Item 6C)

The Medium Term Financial Strategy 2017/21 including the:-

a) Development of indicative proposals for the years 2018/19-2020/21as

part of the implementation of the Strategy as set out in Annex 1.

b) Flexible Use of Capital Receipts Strategy 2017/18 as set out in Annex 2.

c) Regular updates being presented to Cabinet on the progress of the

implementation of the Medium Term Financial Strategy.

The Treasury Management Strategy 2017/20 including the:-

a) Adoption of the Prudential Indicators.

b) Minimum Revenue Provision Policy for 2017/18

c) Council Officers listed in Annex G to approve payments from the Council’s bank account for all treasury management activities.

Schools Budget (Agenda Item 6D)

The Schools Budget of £252,127,600 having taken account of the views and formula proposals from the Schools Forum that: i) The delegation of Private Finance Initiative (PFI) costs to schools are

approved, subject to finalising amended schools agreements and confirmation from the Education Funding Agency (EFA).

ii) The continuing Contributions to Combined Budgets should be £875,600

iii) Dedicated Schools Grant (DSG) reserves totalling £568,900 should be

used to set the Schools Budget.

iv) There is a contribution to the cost of Education Services Grant (ESG) retained duties of £730,000.

v) The funding for Education Services Grant (ESG) General Duties and

School Improvement is agreed.

vi) There is a transfer of £106,000 from the Schools Block to the High Needs Block following the transfer of central budgets to schools

vii) The amendments to High Needs places and to the High Needs Formula

are implemented from September 2017.

viii) The Schools Forum review budgets and demands for High Needs alongside plans to undertake a review of High Needs provision following receipt of a national grant allocation of £132,000 for that purpose.

ix) The changes to the Early Years Funding formula resulting from the

receipt of additional funding are agreed with effect from the 1 April.

The Cabinet in making these recommendations has had regard to the Chief Financial Officer Statement regarding the robustness of the estimates made for the purpose of the Budget and the adequacy of the General Fund balances and reserves.

2 Cabinet recommends to Budget Council that a separate vote be taken in

respect of Council Tax levels for 2017/18 and that :-

a) For Wirral Council Services the Council Tax be increased by 4.99% for 2017/18 which includes the Adult Social Care Precept of 3%.

b) The Wirral Council Tax will include the precepts from the Police & Crime Commissioner for Merseyside and from the Merseyside Fire & Rescue Service.

The Statutory Calculations and Resolution

It be noted that in accordance with Section 31B of the Local Government Finance Act 1992 (as amended), that Cabinet on 8 December 2016 calculated the Council Tax Base 2017/18 for the whole of the properties in its area as 91,309.5 (Item T in the statutory formula). That the following amounts be calculated and approved by the Council for the year 2017/18 in accordance with Sections 32-36 of the Local Government Finance Act 1992 (as amended) (“the Act”); a) £127,430,400 being the amount calculated in accordance with Section 31A

(4) of the Act (amended) as the Council Tax Requirement for 2017/18 (item R in the statutory formula). This amount (D) is determined as being the difference between:

i) £808,854,400 this being the aggregate of the amounts calculated in

accordance with Section 31A (2) of the Act (as amended), i.e. the aggregate of the amounts that the Council estimates that will be charged to a revenue account for the year in performing its functions, that are required to be set aside for contingencies and reserves and required to be transferred from its General Fund to its Collection Fund in the year and

ii) £681,424,000 this being the amount calculated in accordance with Section

31A (3) of the Act (as amended), i.e. the aggregate of the amounts of income that the Council estimates will be credited to a revenue account for the year in accordance with proper practices, the amount of reserves that are estimated to be used to provide for the items referred to in paragraph (a) above, and required to be transferred from its Collection Fund to its General Fund in the year.

b) £1,395.59 being the amount calculated in accordance with Section 31B (1) of

the Act (amended) as the Basic Amount of Council Tax for 2017/18. This amount being calculated as item R divided by item T (as above).

c) That in accordance with section 36(1) of the Act that the following amounts

are calculated for each valuation band in the area:

Wirral – Basic Amount of Council Tax per Valuation Band

A B C D £930.40 £1,085.46 £1,240.53 £1,395.59

E F G H £1,705.72 £2,015.85 £2,325.99 £2,791.18

These amounts being the amounts given by multiplying the amount calculated as the Basic Amount of Council Tax by the number which in the proportion set out in Section 5(1) of the Act is applicable to dwellings in a particular valuation band which is applicable to dwellings listed in valuation Band D.

It be determined that the amount set in (c) above as the Council’s Basic Amount of Council Tax for 2017/18 is not excessive in accordance with the principles determined by the Secretary of State under section 52ZC of the Act (as amended) and that no Referendum to approve the Basic Amount of Council Tax is required. The principles require a Referendum to be held for any increases of 5% or above for those authorities with Adult Social Care responsibilities.

Wirral – Basic Amount of Council Tax Comparison for Referendum

2016/17 2017/18 Change Change £ £ £ % Band D 1,329.26 1,395.59 66.33 4.99

To note that the Police and Crime Commissioner for Merseyside and the Merseyside Fire and Rescue Service issue precepts to the Council in accordance with Section 40 of the Local Government Finance Act 1992 for each category of dwellings in the Council’s area. These have been notified as follows:-

Police and Crime Commissioner for Merseyside

A B C D £110.65 £129.09 £147.53 £165.97

E F G H £202.85 £239.73 £276.62 £331.94

Merseyside Fire and Rescue Service

A B C D £49.56 £57.82 £66.08 £74.34

E F G H £90.86 £107.38 £123.90 £148.68

That having calculated the amounts for Wirral together with the Police and Fire the Council in accordance with Section 30 (2) of the Act hereby sets the following amounts as the total amount of Council Tax for the year 2017/18 for each of the categories of dwellings.

Total Council Tax for Wirral

A B C D £1,090.61 £1,272.37 £1,454.14 £1,635.90

E F G H £1,999.43 £2,362.96 £2,726.51 £3,271.80

CAPITAL PROGRAMME

2017/18 – 2019/20

This covers the Council’s Capital Programme covering the years 2017 to 2020. This consists of a number of projects financed from a range of sources. The following is a copy of the report agreed by Council 6 March 2016. A full list of approved schemes for 2017-20 can be found at Appendix 3. This will be revised as grants are received and updated through monitoring reports.

COUNCILLOR PHIL DAVIES

CABINET

20 FEBRUARY 2017

CAPITAL PROGRAMME

AND FINANCING 2017/20

Councillor Phil Davies (Leader of the Council) said: “Our Capital Programme is about investing in Wirral’s future – improving the infrastructure in the borough, helping residents enjoy better flood protection, transport and highways and improving our schools. The Capital Programme will also help us meet our financial challenge by generating additional income through seeking investment opportunities and realising major savings by supporting transformation projects to redesign how services are delivered.” REPORT SUMMARY This report provides Cabinet with the draft Capital Programme 2017/20 for consideration and referral to Council for approval. It also includes information regarding the revenue implications of this Programme and an update on the latest forecast for capital receipts. The 2017/20 Capital Programme therefore represents a combination of Schemes originally approved as part of the 2016/19 Programme and updated through the Capital Monitoring reports in 2016/17 and new bids for inclusion as detailed in this report. This also includes the new themes around the Transformation Programme and the acquisition of investment properties. This matter affects all Wards within the Borough. The decisions in this report are key decisions.

RECOMMENDATIONS 1. That the new bids as detailed in Appendix 2 be approved. 2. That any new bids supported by grant funding do not commence until written confirmation has been received from the granting authority. 3. That Cabinet recommend to Council for approval the Capital Programme 2017/20 (as detailed in Appendix 3. 4. That progress on delivering the Capital Programme is presented in accordance with the agreed Capital Monitoring arrangement.

SUPPORTING INFORMATION

1.0 REASON/S FOR RECOMMENDATION/S 1.1 The purpose of the Capital Programme is to enable the Council to prioritise and effectively deliver capital investment that contributes to the achievement of Council objectives. 1.2 Links to the revenue budget ensure that revenue funding is provided to meet the financing costs, and any running costs, as a result of the Capital Programme investment. 2.0 OTHER OPTIONS CONSIDERED 2.1 For a scheme to be included in the Capital Programme it must be supported by a Business Case which includes consideration of alternative options and has been reviewed by the Assets and Capital Group. 3.0 BACKGROUND INFORMATION CAPITAL STRATEGY 3.1 The Capital Strategy provides the framework that enables the Council to work with partners and stakeholders to prioritise and effectively deliver the capital investment that contributes to the achievement of Council objectives. ASSETS AND CAPITAL GROUP (ACG) 3.2 This Officer Group was re-established during 2013 to improve the co-ordination and management of the Capital Programme with its remit extended to include the Council’s asset portfolio. The Group includes representatives from all Directorates and the Terms of Reference include:-

• Review of the Capital Strategy and policies relating to capital. • Review and recommend new schemes for inclusion in the Programme. • Manage the delivery of the approved Capital Programme.

CAPITAL PROGRAMME 3.3 The Capital Programme details the schemes being undertaken over the medium term which help the Council achieve its objectives. It is aligned to the Wirral Plan and Medium Term Financial Strategy. It is reviewed, updated and considered by Council each year as part of the annual budget setting process.

3.4 Government announcements may include grant support for specific themes but other investment is based upon affordability. When determining previous programmes, where possible, schemes have been funded through generating capital receipts to minimise the need for borrowing. The Autumn Statement 2015 introduced an additional flexibility as receipts generated between 1 April 2016 and 31 March 2019 can now be used to fund Transformation Programmes. This is fundamental if the Council is to deliver the changes and required savings having first call on those allowable capital receipts. Any new schemes not funded by grant will be funded from borrowing which does generate a revenue cost. NEW SUBMISSIONS 3.5 In order to manage demand within the financial constraints there has to be a means to prioritise investment. Criteria have been developed to provide an initial assessment of any capital bids to ensure the Programme is either targeted to Council priority areas or fulfils statutory obligations. Individual bids are scrutinised by the ACG and form the basis for making recommendations to Cabinet as to which could be included in the Capital Programme. 3.6 The ACG challenged the justification and deliverability of the submissions (with the aim of reducing significant re-profiling of schemes and minimising the level of new borrowing required) prior to reviewing against the prioritisation criteria. 3.7 There were a number of bids relating to sports centres, libraries and the Williamson Art Gallery. Pending the outcome of the current review of leisure and cultural services these schemes are not included in the proposed Programme in Table 3. However, details can be found in the Appendix 2. TRANSFORMATION PROGRAMME 3.8 The Programme contains projects which are key to successfully delivering services differently over the coming years in the areas of Assets, Customers and Children’s Services. This encompasses schemes which reduce demand and costs to the Council and public sector partners and / or generate savings in the delivery of public services. These can be achieved through such as service re-configuration or re-structuring or establishing Alternative Delivery Models. The Programme is funded through the flexibilities regarding Capital Receipts with the projects delivering future financial benefits which have been incorporated into the Budget 207/18 and Medium Term Financial Strategy. 3.9 Within Children’s Services this is to transform the quality of social work provision, leadership and performance for which additional capacity is required in order to safely manage the change and also ensure that intervention is at an earlier stage. This investment will decline in future years whilst delivering benefits through the management of future demand.

COMMERCIAL OPPORTUNITIES 3.10 The Council presently has a number of investment properties such as industrial units which generate an income stream. Like other local authorities the Council is identifying opportunities to increase income and the acquisition of properties can meet this aim as well as enhancing the progression of strategic developments across the borough. The expectation is that the revenue from the acquired assets will provide income is excess of the running costs, including any borrowing costs. 3.11 The Council is working with partners to provide access to funding to provide the investment that will deliver future savings. The initiative for 2017/18 relates to an arrangement with the waste contractor whereby the Council sources the investment for the acquisition of waste vehicles. This then delivers both a return on the investment and a reduction in the contract. WIRRAL WATERS INVESTMENT FUND 3.12 Regulations allow for any business rates growth within the Enterprise Zone (EZ) to be re-invested to stimulate further development. This growth can be used to access and fund borrowing to increase investment within the Wirral Waters element of the Merseywaters EZ in order to bring forward development more quickly and to promote further growth. The borrowing costs are funded from the increase in Business Rates that will be generated. 2017/20 CAPITAL PROGRAMME 3.13 The 2017/20 Capital Programme therefore represents a combination of:- a) Schemes approved as part of the 2016/19 Programme and updated through the Capital Monitoring reports in 2016/17. The latest position updates the Quarter 3 position to include the indicative Highway Structural Maintenance funding for each of the three years. Table 1: Capital Programme (per previous monitoring reports)

Analysis of Capital Programme 2017/18 2018/19 2019/20 £000 £000 £000 Business 14,963 300 0 Environment 11,021 2,470 470 People 12,250 4,000 0 Total Expenditure 38,234 6,770 470 Financing Unsupported borrowing 17,006 3,770 470 Capital receipts 1,937 0 0 Grants 19,141 0 0 Revenue/reserves 150 3,000 0 Total Financing 38,234 6,770 470

b) New bids for consideration at this meeting. The emphasis has been to ensure that these support the delivery of the Wirral Plan and the 20 Pledges. Appendix 1 details the criteria against which schemes were scored and Appendix 2 provides a summary of each scheme. Table 2: New bids for inclusion in the Programme

New Bids by Theme 2017/18 2018/19 2019/20 £000 £000 £000 Business 17,797 18,200 18,200 Environment 5,748 0 0 Transformation Programme 15,740 TBC TBC Total 39,285 18,200 18,200

3.14 The proposed Capital Programme combines Tables 1 and 2 together with an estimate for grant to be received for Schools Modernisation and Basic Needs of £3.3 million in 2018/19 and 2019/20. The detail can be found in Appendix 3. Table 3: Proposed Capital Programme 2017/20

Proposed Capital Programmer 2017/18 2018/19 2019/20 £000 £000 £000

Business 32,760 18,500 18,200 Environment 16,769 2,470 470 People 12,250 7,300 3,300 Transformation Programme 15,740 TBC TBC Total Expenditure 77,519 28,270 21,970 Financing Unsupported Borrowing 35,121 13,770 10,470 Capital Receipts 17,677 0 0 Grants 20,571 9,500 6,500 Business Rates 4,000 5,000 5,000 Revenue/Reserves 150 0 0 Total Funding 77,519 28,270 21,970

Note: Unsupported Borrowing includes the Investment in Properties for which the borrowing costs will be met from the resulting income stream. 3.15 In forecasting a 3 year Programme it is recognised that there are many variables and factors that will impact on future requirements. The Programme will be subject to regular review to ensure the most effective use of resources whilst providing the opportunity to update agreed schemes and add any new schemes which will arise as new funding is identified and delivery plans are developed along with Council partners.

CAPITAL RECEIPTS 3.16 Available capital receipts at 1 April 2016 were £8.047 million. Table 4 assumes the proposed spend in Table 3 is agreed. 3.17 Additional flexibilities regarding the use of receipts were confirmed following the Chancellor’s Autumn Statement 2015. Receipts generated between 1 April 2016 and 31 March 2019, excluding Right-To-Buy receipts, can be used to fund Transformation provided the Council has agreed a Transformation Programme setting out the projects, costs and deliverable benefits / savings 3.18 A fundamental review of the Council’s asset portfolio is currently being undertaken. It is intended that this will highlight those assets that Members may wish to consider for disposal, a critical decision given the funding of the Transformation Programme is reliant upon the generation of capital receipts. Tables 4 and 5 split the Receipts based upon the Flexibility arrangements. Table 4: Projected Capital Receipts for traditional capital schemes

2016/17 2017/18 2018/19 2019/20 £000 £000 £000 £000 Capital Receipts Reserve 8,047 1,937 400 800 In - Receipts Assumption 454 400 400 3,900 Out - Funding (Capital) -6,564 -1,937 TBC TBC Closing Balance 1,937 400 800 4,700

3.19 In respect of the major receipts. For Manor Drive the Council should receive £2.2 million in 2017/18 with a similar amount in 2018/19. The sale of Acre Lane is now likely to occur in summer 2017 and the first receipt of £3.5 million received with similar amounts for 2018/19 and 2019/20. No account has been taken for any potential receipt from the former Rock Ferry High School. 3.20 The in-year receipts are based on the latest known projections which accord to £7.085 million. The required target for 2017/18 is in the region of £15.3 million with 2018/19 subject to review as the Transformation Programme requirements have still to be confirmed for 2018/19. Table 5: Projected Capital Receipts for the Transformation Programme

2016/17 2017/18 2018/19 £000 £000 £000 Capital Receipts Reserve 0 500 60 In - Receipts Assumption 500 15,300 5,700 Out - Funding Transformation 0 -15,740 TBC Closing Balance 500 60 5,760

4.0 FINANCIAL IMPLICATIONS 4.1 The proposed 2017/20 Capital Programme is a combination of the currently approved Capital Programme and New Bids. As the Programme stands this will require a maximum of £29.3 million unsupported borrowing from 2017/18 to 2019/20. 4.2 The revenue borrowing costs associated with any re-profiled schemes had already been included in the 2016/17 and subsequent revenue budgets and therefore do not represent an additional requirement. 4.3 The spend and funding of the Capital Programme are linked to Treasury Management. With the low interest available for investments the policy of temporary borrowing from positive internal cash flows has been continued. This policy, and the re-profiling of the Programme, defers the need for external borrowing delivering in-year savings but is not sustainable in the medium term. 4.4 As Capital Receipts will be used to fund the Transformation Programme and the investment in properties is assumed to be self-funding the net cumulative revenue impact of additional borrowing required to fund new bids is: Table 6 : Additional borrowing requirement to fund new bids

2017/18 2018/19 2019/20 2020/21 £000 £000 £000 £000 Additional Revenue cost 140 610 610 610

4.5 The Budget 2017/18 includes a reduction of £2 million in capital financing costs. The Budget projections reflect the additional revenue costs resulting from the proposed Programme for 2017/18 as well as covering costs associated with the probability that the process of internal borrowing will have to be reversed as reserves are reduced or when there are likely significant increases to interest rates. As these projections might change during the year the Programme and related Prudential Indicators will be updated. 5.0 LEGAL IMPLICATIONS 5.1 There are none arising directly from this report as they will be identified as each scheme is progressed. 6.0 RESOURCE IMPLICATIONS: ICT, STAFFING AND ASSETS 6.1 The Programme is about investment into the Council assets so does include schemes relating to IT and assets.

7.0 RELEVANT RISKS 7.1 The Programme will not be delivered as projected. This could see individual schemes progressing ahead of, or being behind, the projected timetable. The regular monitoring and reporting of the Programme allows actions to be taken to manage the financial position. 7.2 Capital receipts are below the level estimated. Regular reporting to ACG on progress of asset disposals allows the Capital Programme to be reviewed should this eventuality arise. 7.3 Interest rates increase to a level greater than budgeted for. Regular monitoring of economic forecasts should assist in determining the best time to borrow to fund the Programme. 8.0 ENGAGEMENT/CONSULTATION 8.1 There has been no specific consultation with regards to this report. In terms of the delivery of schemes consultation will take place as part of the scheme development and implementation. 9.0 EQUALITY IMPLICATIONS 9.1 There are none arising directly from this report as they will be identified as each scheme is progressed. Individual schemes within the Programme will have a direct impact upon groups for example the Aids and Adaptations investment within Regeneration. REPORT AUTHOR: Reg Huyton Principal Accountant Telephone 0151 666 3415 Email [email protected] APPENDICES Appendix 1 – Scoring mechanism for assessing capital bids. Appendix 2 – Summary of new capital bids 2017/20. Appendix 3 – Proposed Capital Programme 2017/18 to 2019/20. SUBJECT HISTORY Council Meeting Date

Cabinet - Capital Programme 2016/19 Council – Capital Programme 2016/19 Cabinet / Council - Capital Monitoring 2016/17

22 February 2016 3 March 2016

Quarterly reports

mailto:[email protected]

APPENDIX 1 CAPITAL PROGRAMME 2017/20

SCORING MECHANISM FOR ASSESSING CAPITAL BIDS

Scheme Title

Score

1-10

Multiplier Weighted

Score

Essential Health & Safety Is there a clearly identifiable requirement to meet essential health and safety or DDA obligations?

10

20

Objectives and outputs Are the stated objectives specific, measurable, achievable and realistic? Have any outputs been quantified? Have any project constraints been assessed and full consideration given to addressing these? Will not doing the scheme result in a significant drop in the level of service the Council provides?

10

10

10

10

5

5

5

5

Identification of Alternative Options Have alternative options been fully considered with detailed reasons for rejection evidenced?

10

5

Finance Business case demonstrates achievable/realistic revenue savings OR generates additional income If yes, score by comparing to the cost of borrowing In which year are revenue savings first anticipate? The scheme requires additional revenue resources over and above capital financing costs Does the scheme receive specific funding from external sources?

10

10

20

10

10

10

10

10

10

10

Risk Have risks been properly identified and scored?

10

10

Overall Weighted Score xxxx

Scoring Summary and Scheme estimates New Capital Bids 2017-20 for inclusion Total Scheme

EstimateSCHEME Comments £000Waste vehicles Invest to save and increased efficiency. 5,686Sailing craft purchase - Wirral Sailing Centre Income generation 62Thermal mapping Invest to save/reduce running costs 42Transformation Programme Relates to the flexible use of capital receipts. Inward 15,740Wirral Waters Investment Fund investment. Borrowing costs funded from Business Rates 14,000Acquisition of Property Assets Investment in Assets to provide income return 30,000Car parking pay and display machines Income generation - subject to proposed saving being agreed 900Integrated Transport Grant funded - no financing costs 1,160Pothole Action Fund Grant funded - no financing costs 270Structural Maintenance Programme Grant funded - no financing costs 9,600Street lighting column replacement Health and safety essential replacement/maintenance 500Dock bridges replacement To ensure success of the existing replacement scheme 700Webcasting/audio/electronic voting replacement Webcasting for committee meetings. Transparency agenda 225

Total Capital Cost of New Bids 78,885New Capital Bids 2017-20 relating to the leisure and cultural reviewEuropa Pools refurbishment Income generation 2,500Arrowe Park golf improvements Income generation 650Tennis Centre refurbishment Income generation 1,340Williamson Art Gallery refresh and repair Maintain Accredited Museum Status, small income increase 350Beechwood Leisure Centre remedial works Upgrade to ensure sustainability 500Bebington Central Library refurbishment and repair Improvements to the building fabric 1,219Birkenhead Central Library redevelopment and refurbishment Improvements to the building fabric 467Wallasey Central Library redevelopment and refurbishment Improvements to the building fabric 196

Total Capital Cost of New Bids 7,222

PROPOSED CAPITAL PROGRAMME 2017/18 TO 2019/20 APPENDIX 3 2017/18 2018/19 2019/20 SUMMARY £000 £000 £000 Overall Programme Business Environment People Transformation Programme Total Programme Funding Unsupported borrowing Capital Receipts Grants Business Rates (Wirral Waters only - ringfenced) Revenue/reserves Total Resources

32,760 16,769 12,250 15,740 77,519 35,121 17,677 20,571 4,000 150 77,519

18,500 2,470 7,300 TBC 28,270 13,770 - 9,500 5,000 - 28,270

18,200 470 3,300 TBC 21,970 10,470 - 6,500 5,000 - 21,970

2017/18 2018/19 2019/20

Business £000 £000 £000

Building refurbishment to increase occupancy

Fund to assist land assembly and resale

Cleveland Street Transport Depot

Demolish Bebington Town Hall

Demolish former Rock Ferry High School

Treasury Building

Industrial estates

Millennium Centre remodelling

Structural maintenance

Transport for Growth

Coast protection

East Float access

Dock Bridges replacement

Preventative maintenance to unclassified/residential streets

1,320

470

492

316

213

510

150

555

3,200

565

230

295

5,510

500

-

-

-

-

-

-

-

-

3,200

-

-

-

-

-

-

-

-

-

-

-

-

-

3,200

-

-

-

-

-

Replace highways grass cutting machinery

Business Investment Grants

Growth Fund

Webcasting

Thermal mapping/weather station upgrade

Integrated Transport

Pothole Action Fund

Street Lighting column replacement

Parking machines (subject to decision on savings proposal)

Investment in Properties

Wirral Waters Investment Fund

Total Programme

300

737

300

225

42

1,160

270

500

900

10,000

4,000

32,760

-

-

300

-

-

-

-

-

10,000

5,000

18,500

-

-

-

-

-

-

-

-

10,000

5,000

18,200

2017/18 2018/19 2019/20

Environment £000 £000 £000

Park depot rationalisation

Transport Museum

Flaybrick Cemetery

Soft play areas- leisure centres

West Kirby Marine Lake integrated accommodation

Leasowe leisure centre outdoor 3G pitches

The Oval redevelopment

West Kirby flood alleviation

Aids/adaptations and DFG

Housing renewal

Restore empty homes

Clearance

Home Improvement

New house building programme

Housing infrastructure fund

350

190

100

300

875

820

179

1,850

2,269

470

374

1,241

531

472

1,000

-

-

-

-

-

-

-

-

2,000

470

-

-

-

-

-

-

-

-

-

-

-

-

-

-

470

-

-

-

-

-

Wirral Sailing Centre sailing craft

Waste vehicles acquisition

Total Programme

62

5,686

16,769

-

-

2,470

-

-

470

2017/18 2018/19 2019/20

People £000 £000 £000

Pensby Wood day service remodelling/additional classrooms

Family support scheme

Stanley Special additional classrooms etc.

School condition allocation ****

Basic Needs ****

Primary Places

Community Intermediate Care

Extra Care housing

Extra Care housing (learning disabilities)

Total Programme

1,532

191

132

3,583

2,135

2,877

400

1,400

-

12,250

-

-

-

2,500

800

-

-

1,000

3,000

7,300

-

-

-

2,500

800

-

-

-

-

3,300

**** Grant allocation for 2018/19 and 2019/20 will be announced during 2017/18. Estimated figures used. 2017/18 2018/19 2019/20 Transformation Programme £000 £000 £000 Transformation Programme – Assets and Customers Transformation Programme – Children’s’ Services Total Programme (funded from capital receipts)

5,740 10,000 15,740

TBC TBC

-

TBC TBC

-

SCHOOLS BUDGET 2017/18

This section details the schools budget 2017/18. The Schools Budget is separate from the Council Budget for General Fund services. It represents the use of the Government Grant provided for Schools which is known as the Dedicated Schools Grant. Schools Forum met on the 18 January 2017 and agreed the Schools Budget. The report to the Forum as subsequently agreed by Cabinet 22 February and Council 6 March 2016. Details are given below: CABINET 20 FEBRUARY 2017/COUNCIL 6 MARCH 2017 Minute 145 Schools' Budget 2016/17 RESOLVED Cabinet recommends the Schools Budget of £252,127,600 to Budget Council having taken account of the views and formula proposals from the Schools Forum that:

i) That the delegation of Private Finance Initiative (PFI) costs to schools are approved, subject to finalising amended schools agreements and confirmation from the Education Funding Agency (EFA).

ii) That the in continuing Contributions to Combined Budgets should be £875,600.

iii) Dedicated Schools Grant (DSG) reserves totalling £568,900 should be used to set the Schools Budget.

iv) There is a contribution to the cost of Education Services Grant (ESG) retained duties of £730,000.

v) The funding for Education Services Grant (ESG) General Duties and School Improvement is agreed.

vi) There is a transfer of £106,000 from the Schools Block to the High Needs Block following the transfer of central budgets to schools

vii) The amendments to High Needs places and to the High Needs Formula are implemented from September 2017.

viii)The Schools Forum review budgets and demands for High Needs alongside plans to undertake a review of High Needs provision following receipt of a national grant allocation of £132,000 for that purpose.

ix) The changes to the Early Years Funding formula resulting from the receipt of additional funding are agreed with effect from the 1 April.

COUNCILLOR TONY SMITH

CABINET

20 FEBRUARY 2017

SCHOOLS BUDGET AND

FORMULA FUNDING CHANGES 2017/18

Councillor Tony Smith, Cabinet Member - Children and Family Services, said: “The performance of Wirral schools continues to go from strength to strength. We committed in our Wirral Plan to do all we could to continue to support our schools and ensure that every child in the borough has the opportunity of a good education, and good career. Ensuring our schools have the resources in place to continue to improve and provide our young people with an excellent education is vital to the future of our borough.” REPORT SUMMARY This report sets out the Schools Budget for 2017/18 having previously been considered by the Schools Forum at their meeting on 18 January 2017 The Schools Budget covers education provision for all Wirral Pupils aged up to 16 in Early Years, Primary, Secondary and academy schools and for some pupils up to the age of 25 in Special Schools and High Needs providers. Most budgets are delegated to schools with some central provision for support services including school admissions, PFI and High Needs. The report proposes a number of changes to the funding formula for Early Years to take account of national changes and increased resources. There are also changes proposed to High Needs places and funding. The Schools Budget provides resources to support all children and young people pledges. The budget affects all Wards and is a Key Decision.

RECOMMENDATIONS Cabinet recommends the Schools Budget of £252,127,600 to Budget Council having taken account of the views and formula proposals from the Schools Forum that:

i) That the delegation of Private Finance Initiative (PFI) costs to schools

are approved, subject to finalising amended schools agreements and confirmation from the Education Funding Agency (EFA).

ii) That the in continuing Contributions to Combined Budgets should be

£875,600

iii) Dedicated Schools Grant (DSG) reserves totalling £568,900 should be used to set the Schools Budget.

iv) There is a contribution to the cost of Education Services Grant (ESG)

retained duties of £730,000.

v) The funding for Education Services Grant (ESG) General Duties and School Improvement is agreed.

vi) There is a transfer of £106,000 from the Schools Block to the High

Needs Block following the transfer of central budgets to schools

vii) The amendments to High Needs places and to the High Needs Formula are implemented from September 2017.

viii) The Schools Forum review budgets and demands for High Needs

alongside plans to undertake a review of High Needs provision following receipt of a national grant allocation of £132,000 for that purpose.

ix) The changes to the Early Years Funding formula resulting from the

receipt of additional funding are agreed with effect from the 1 April.

SUPPORTING INFORMATION 1.0 REASON FOR RECOMMENDATIONS 1.1 The Council has a legal requirement to set a schools budget for the following

financial year. 2.0 OTHER OPTIONS CONSIDERED 2.1 The Forum considered a number of options when considering the Schools

Budget with regard to the continuation of funding for services previously funded by the Education Services Grant and proposals for School Improvement, Early Years and High Needs funding. These are described in more detail in the report

3.0 BACKGROUND INFORMATION 3.1 The Schools Forum were asked for their views on and approval of the

Schools Budget for 2017/18 on 18 January 2017. The budget of £252,127,600 is for early years, maintained schools, academies, colleges and providers and is based on Dedicated Schools Grant allocations issued by the Department for Education on 20 December 2016, DSG reserves and a Council contribution to PFI costs of £763,500.

3.2 The format of the Dedicated Schools Grant (DSG) is changing following

lengthy discussion and more recent consultation. In 2017/18 there will be a new national formula for Early Years, whilst changes for the Schools and High Needs have been deferred for 12 months, therefore allocations are broadly similar to previous years.

In summary the main changes to DSG in 2017/18 are:

- A new Early Years block increasing hourly rates paid to providers (by £1.4 million).

- Additional grant to cover the 15 hour extension of Early Years for working parents from September 2017 (£2.4 million).

- The transfer of funding for Education Services Grant Retained Duties of £730,000.

- The transfer of High Needs funding for post 16 FE places of £780,000. - Additional High Needs funding (growth) of £550,000.

3.2.1 Within DSG the 3 unringfenced spending blocks indicate the level of

expenditure anticipated in each budget area. At present local spending decisions can reallocate resources according to needs and priorities eg from Schools areas to High Needs or vice versa. Locally a small movement has been made to take account of the distribution of budgets to special schools that were previously held centrally (School Improvement, CLC’s etc.). This has resulted in a transfer of £106,000. Taking account of the National Funding Formula some of this adjustment may only be possible for 1 year.

3.2.2 The allocations for the Schools funding block have been updated for changes in pupil numbers and include academies. Pupil numbers are from the October 2016 census.

3.2.3 Early Years funding is based on a combination of the census in January

2017 and January 2018. The dates for the Early Years Census mean that the exact DSG will not be finalised until June 2018. The grant used for the budget is based on current indicative figures (using the January 2016 census) and any known or anticipated changes after this date eg for the 15 hour extension in September 2017.

3.2.4 The High Needs Block provides resources to fund high needs students aged

0 – 24, including the Hospital School. Funding has been transferred for baseline place numbers at Wirral Met College (72) and Birkenhead 6th Form College (60) and additional funding has been provided to meet growing needs across all authorities. For Wirral an additional £550,000 has been included for this. Growth can be used flexibly to make adjustments locally to high needs places as well as to the top ups provided and a number of changes are described in this report.

3.2.5 The Blocks in their current format can be summarised as follows: Block Pupil Numbers Funding Per Allocation Pupil £ £ 1. Schools Block 43,024 4,552.86 195,882,200 2. Early Years Block 3,116 4,094.50 12,757,600 Early Years Extension(7/12) 1,014 4,094.50 2,423,600 2 Year Old funding 782 4,959.00 3,877,900 Nursery Protection 517,900 Disability Access Fund 100,000 Early Years Pupil Premium 180,000 3. High Needs Block 35,056,000 Total 250,795,200 3.2.6 Schools Block £196 million

This funding covers the delegated budgets to mainstream schools and academies. In addition the block funds a number of budgets that are managed centrally on behalf of schools: • Admissions. • Schools Forum. • Capital Expenditure from Revenue (PPM and PFI costs). • Contributions to combined budgets. • Schools budget retirement costs (school closure). • School Licences. The treatment of these budgets is in accordance with national guidance. The changes tto a number of areas are considered later in this report.

3.2.7 Early Years Block £20 million

This Block funds the costs of Early Years Education for 2, 3 and 4 year old children in schools, nurseries and private voluntary and independent providers for both the universal and targeted entitlement. Most of this funding is directed through the Early Years Single Funding Formula (EYSFF). There are small elements covering SEN costs and some central Early Years support costs. Amounts held centrally are within the new nationally defined limits.

3.2.8 High Needs Block £35 million

The make up of this block is complex. It is based on the “place plus” funding system introduced by the DfE in April 2013 and includes: • Special schools (pre and post 16), school bases and non-maintained

special schools. All receive a base level funding of £10,000 per place. • Alternative Provision Bases and Emslie Morgan Academy funding of

£10,000 per place. • Place funding in Wirral’s FE provision at Wirral Met College and

Birkenhead 6th Form College of £6,000 per place. • Additional funding over and above that provided for places in the form of

“top ups” provided on a per pupil basis. The top up, or “plus” element of funding, takes account of the agreed assessed needs of pupils and is paid by the “commissioner” responsible; this may be Wirral Children’s Services, a school or another Local Authority. Wirral’s top up system uses 5 bands to allocate funding across special schools, resourced bases and alternative provision. Non-maintained Special Schools also receive a top up.

• The costs of Top Ups for all education and training for post 16 specialist provision for Learners with Learning Difficulties or Disabilities (LLDD) in colleges and private providers.

• The Hospital Schools budget. • The cost of placements in Independent Special Schools. • The costs of Education, Health and Care Plans / Statements. • The provision centrally of SEN support.

3.3 Academies

Currently there are 16 secondary academies, 2 primary academies and 1 Alternative Provision Academy – Emslie Morgan. Academies are independent from the local authority and are funded directly from the EFA, however Regulations still require Wirral to calculate their budgets in order to determine the total grant reduction; for Wirral this is estimated to be £76 million in 2017/18.

3.4 2017/18 Schools Budget savings

There are no specific budget savings proposed within the Schools Budget report.

3.5 2017-18 School Budget Changes 3.5.1 Primary, Secondary and Academy Budgets £195 million The significant changes within this area are:

• The net increase in school rolls, resulting in an overall budget increase of £2 million. There are 508 more pupils on roll in October 2016 compared to October 2015. The estimated secondary numbers for pupils aged 11-15 have risen from 17,031 to 17,183 an increase of 132 (1%). Primary numbers have also increased from 25,486 to 25,842 (a 1.4% increase)

• An increase in rates payable of £44,800. There is an overall increase reflecting inflation, rates revaluation and transitional relief.

• A number of budgets that were previously held at the centre totalling £4 million have now been delegated to schools. These changes take account of the proposals for services supported by ESG and the EFA’s updated guidance on Historic Commitments and Combined Budgets.

• Delegation includes: Remaining CLC budgets (excluding PFI), Wellbeing and Staff Surveys of £206,000. School Improvement £27,000 and School Intervention £485,000. PPlanned Programmed Maintenance £224,000. The PFI Affordability Gap of £3,036,500, which has been increased by the estimated cost of inflation - £150,000.

• There is a small amount of Headroom within the budget. This arises from a difference between the pupil funding received in DSG for rising primary rolls and the primary funding allocated within the ISB. Allowing for a small increase in B

• School budgets continue to be supported by reserves; £380,000 will be used in 2016/17. These are one-off balances and are not likely to continue beyond 2017/18 or be included with the new National Funding Formula.

3.5.2 6th Form Funding

The Schools Budget includes funding for High Needs students in 6th Forms. All other post 16 funding is through the National Formula.

3.5.3 High Needs Places £16.0 million

From 2017/18 the place funding for students in Further Education (Wirral Met College and Birkenhead 6th Form) has been transferred into this budget and all future changes to provision will be made from the within this budget and the overall resources available.

Places in specialist provision within Local Authority areas continue to be determined by each LA in consultation with schools and providers. There is flexibility to make adjustments so that places broadly reflected take up by pupils and a number of place changes have been proposed by Wirral. These have been reported to the EFA where necessary and have been reflected in the Schools Budget as follows:

FYE of changes made in 2016/17 Elleray Park increase by 11 places to 110 Stanley increase by 21 places to 120 Lyndale closure and reduction of 40 places Claremount increase by 10 to 204 Bebington ERP reduce by 5 to 20 Birkenhead Park ERP reduce by 10 to 10 Kingsway Academy ERP reduce by 10 to 20 Birkenhead 6th Form reduce by 5 to 60 Wirral Met College increase by 12 to 72 Changes from September 2017 Claremount increase by 12 to 216 Townfield ERP increase by 1 from 11 to 12 Hilbre ERP increase by 15 to 30 Kingsway Academy ERP closure and reduce by 20 Birkenhead Park closure and reduce by 10 Emslie Morgan AP increase by 20 to 100 Birkenhead 6th Form increase by 5 to 65 Wirral Met College increase by 45 to 117 There are no changes proposed to the Hospital School

The place value changes have an additional cost of £165,600 in 2017/18 and a further £199,000 (FYE) in 2018/19..

3.5.4 Early Years £18.9 million

The provision for 3 and 4 year olds is based on 5,193 children (3,116 FTE) and will roll over at its current level. The EFA have estimated that 1,690 (1/3rd) will take up the extended offer in September 2017 and provision for this has been included within the budget.

The budget reflects the changes to the Early Years Funding Formula which is reported elsewhere on the agenda. The average hourly rate (including supplements) has increased from £3.68 to £4.00, a 9% increase.

Take up of the 2 year old offer has increased during the year and is currently at 80% of those children where eligibility is indicated (1,303 children = 782 FTE). The overall funding has also increased and in 2017/18 it is planned that the hourly rate should increase from £4.85 to £5.12, a 6% increase.

The estimated value of the Early Years Pupil Premium is £180,000, reflecting a take up of about 11%.

3.5.5 SEN Top Ups £17.8 million

The proposed budget for SEN Top Ups is £17.8 million. There is an increase / growth within the High Needs DSG Block of £550,000. Some further information is needed from the EFA to confirm the final adjustments that will be made. Growth has been allocated to increased places in maintained and Independent Special Schools and to increased top ups as follows.

SEN Top Ups 2017/18 2016/17 2017/18 Statements (£4,174,800) £ £ Early Years 292,200 450,000 Primary 1,460,000 1,585,000 Secondary (including 6th Forms) 1,827,000 1,920,000 Personal Budgets 108,500 108,500 Other 111,300 111,300 Top Ups (£13,608,500) Special Schools (and 6th Forms) 6,406,300 6,527,400 SEN units - resourced and alternative provision 602,000 704,000 EMAP 243,800 367,000 Further Education, 6th Form College and providers 728,000 946,000 Exceptional Need 645,000 504,100 Nursing support 127,100 127,100 Contingency 434,000 314,000 Independent Non Maintained Special Schools 3,689,000 3,770,000 Home Teaching 308,900 348,900 Total 16,983,100 17,783,300 Changes which have been identified as part of the budget review are:

Special Schools. The top up budgets have been increased by £121,100, reflecting additional numbers and also the delegation of central budgets for School Improvement etc. Statements. A net increase of £375,800, increasing provision within Early Years by 50% and a greater number / cost of IPFA’s / EHCP’s. Independent Special Schools. An increase of £81,000. There are currently 89 places,over half of which are at West Kirby Residential School. The proposed budget takes account of these numbers and makes provision for 19 leavers at the end of the summer term and 7 new placements. Further Education and 6th Form College. An increase of £218,000, mainly in respect of the additional numbers identified in FE college provision.

Exceptional Need a reduction of £141,000. This budget was increased temporarily in 2016-17 to fund the increasing numbers and cost of support of complex and challenging children with high needs. Some pressures have been contained during the year, further work is needed and will be the subject of ongoing reviews. Contingency. The contingency of £314,000 covers the potential costs of: • The 90% guarantee to maintained schools to limit the demands on low

cost high incidence SEN budgets used to support statements. • Any unforeseen consequences arising from top ups, exceptional cases or

the review of High Needs. • Any mismatch between provider places and places taken up. • Inflationary pressures within Non Maintained Special Schools.

The remaining budget is thought to be sufficient at this time taking account of the known commitments in the current year. However there is now little flexibility, meaning budgets will need to be closely monitored.

This is a brief description of the changes that have been put in place with an increased cost overall of £1.2 million. Locally and nationally there are significant budget pressures for High Needs. These have been eased by growth within the High Needs Block Grant allocation and funding from Early Years. However this growth alone does not address all needs. The use of reserves and contingencies give only temporary funding; a more permanent budget framework will need to be established alongside the new national High Needs Formula from 2018/19.

3.6 Use of Reserves

DSG reserves held total £2.5 million and were agreed as part of the year end accounts for 2015/16. The Schools Budget for 2016/17 is likely to use £0.9 million of these. In the 2017/18 budget £0.6 million of reserves will also be used (£380,000 within Schools and £189,000 in High Needs). This leaves reserves of £1 million which are assigned mainly to costs of pay harmonisation.

3.7 Other Grant Funding

The meal rate for Universal Infant Free School meals will stay at £2.30 per meal for the academic year 2017/18. The SEND Implementation Grant will continue (with funding increased to £217,000 from £196,000) to support the implementation of SEND reforms. In addition a grant is provided to all LA’s to support a strategic review of High Needs provision, Wirral has received £132,000.

The funding for Primary PE and Sport and Extended Rights for Home to School Transport are still to be confirmed but are likely to continue. There is an Education Services Transitional Grant of £943,000. This provides funding for the period April to August 2017 to provide Education Services to maintained schools associated with School Improvement, Education Social Workers, Premature Retirement Costs and other statutory duties. From September however funding is withdrawn. Following guidance from the EFA which says “We recognise the LA’s will need to use other sources of funding for Education Services once the General Funding Rate has been removed”, maintained schools with the agreement of Schools Forum will contribute £291,600. Proposals for ESG are considered later in this report.

3.8 INFLATION

No direct provision is included within the budget for pay awards. At this stage a 1% award for teaching and support staff is anticipated alongside an Apprenticeship Levy of 0.5%. The additional costs arising from these changes in schools together with the full year effect of changes in 2016/17 will need to be met from existing school budgets.

There is no general provision for price inflation, although costs for school rates and PFI continue to reflect RPI increases.

3.9 CENTRALLY HELD SCHOOL BUDGETS The budgets held for Contingency, Special Staff (maternity and trade union

duties), the School Library Service, Insurance (Governors Aided), Behaviour Support, the Minority Ethnic Achievement Service and FSM Eligibility have been delegated to schools. Schools Forum have de-delegated these areas so they can be held centrally (with the exception of Secondary Insurance).

In addition and new for this year are decisions for the de-delegation of costs associated with School Improvement and General Duties as they relate to the former Education Services Grant.

The centrally held budgets for 2017/18 cover:

• the continuing premature retirement costs of teachers and staff that have arisen from closing schools (£60,000 a reduction of £26,000).

• the cost of licences for copyright and music in all schools and academies resulting from a national agreement (£226,100 an increase of £2,300).

• School Admissions (£341,800). • Contributions to combined budgets (£875,600). • Schools Forum £10,600. • Early Years £518,700. • The Council funded element of the PFI Affordability Gap £763,500

(including an inflationary increase of £150,000. • Retained duties re the former Education Services Grant of £730,000.

3.10 Contributions to Combined Budgets

School Funding Regulations continue to allow contributions to support services that would otherwise fall outside the Schools Budget. These budgets combine with other council resources for the educational benefit of children. There must be no new commitments or increases in expenditure from that agreed in 2012/13 (as confirmed by the EFA in their publication “2017 to 2018 schools funding : historic commitments supplementary guidance for LA’s”.

The budgets are shown below:-

Discretionary Rate Relief £106,600 This budget funds continuing costs for Discretionary Rate Relief in Voluntary Aided schools. School Improvement £330,000 (previously £359,900) This budget supports the continuing funding for existing staff with permanent contracts (3 + admin support). Local Safeguarding Children’s Board £30,000 The LSCB provides governance of child protection arrangements, undertakes serious case reviews, training and employs a Designated Officer for Allegations. The Board is funded from partner organisations including Social Care, Schools, Police, Health and Probation. The £30,000 contribution from the Central Schools Budget matches the amount received from Health. There is also a £10,000 contribution from the High Needs Budget. School Intervention £136,000 (previously £674,500) This budget supports the continuing funding for 2 existing staff. The remaining intervention budgets have been delegated to schools. PFI - City Learning Centres £68,500 (previously £304,700) The 3 City Learning Centres closed in summer 2016 after which budgets were delegated to schools. There is an ongoing requirement to fund PFI costs for 2 of the 3 buildings. Provision has been made within the council for some costs (£115,700) and also the Home Tuition Service (£40,000). This residual budget is required until a more lasting solution is found. PFI Support £61,800 A small team within Asset Management manages the PFI contract on behalf of the Council and provides support / advice to PFI schools. This budget provides part of the funding needed to support the ongoing contract management. LACES £140,500 The service reviews the educational progress of Looked After Children, provides training to staff and some direct support to pupils.

Combined Budget Summary £ Discretionary Rate Relief top ups 106,600 School Improvement 330,000 LSCB Contribution 30,000 School Intervention 136,000 PFI – CLC’s 68,500 LACES 140,500 PFI Support Team 61,800 Governors Forum 2,200 Total 875,600

3.11 Education Services Grant £730,000

In the 2015 Spending review the DfE announced a saving of £600m by removing the ESG General Funding rate for schools from 2017/18. The ESG General rate represents spend on statutory support to maintained schools (not academies), which in future will cover functions such as Internal Audit, aspects of LMS / Finance, Children’s Services support, school redundancies and some costs of asset management.

At the same time the EFA have transferred an amount in respect of ESG Retained Duties for all schools and academies into DSG. These duties also cover some of the above and in addition the work of the Education Social Work service. The transferred amount of £730,000 is based on an amount of £15 per pupil. The Schools Forum agreed to transfer this amount to the Council budget as a contribution to ESG retained services.

In addition £291,600 was agreed (and de-delegated) on behalf of Maintained Primary, Secondary and Special schools towards the part year costs of ESG General Duties from September 2017 (full year cost £500,000).

The position is summarised in the table. ESG Services

(Estimated costs per 2016/17 Section 251 Budget return)

Retained General School Total

Duty Duty Improvement

Estimated cost

£ £ £

£ Education Social Workers 387,600 - -

387,600

School Improvement - - 302,900

302,900 Asset Mment

80,000 80,000 -

160,000

Strategy / Regulation 532,500 532,500 - 1,065,000 Premature retirement - 128,300 -

128,300

Health Therapies

- 18,500 -

18,500

1,000,100 759,300 302,900

2,062,300

Retained General School Total

Duty Duty Improvement

Funding Schools Budget / de-

delegation 730,000 291,600

Transition Funding

270,100 467,700

1,000,100 759,300

The Council Budget for 2017/18 includes the remaining plans to manage the overall ESG reduction of £3.4 million next year and specifically the amount in excess of the MTFP of £0.9 million. Further work will be needed to provide a sustainable level of services over the medium term once the transitional grant is removed.

3.12 School Improvement Budget and Funding 2017/18

Separate funding will be put in place for School Improvement. The initial proposals for 2017/18 are summarised as:

School Improvement 2017/18 Full Year Estimated Cost April to September - Staff and support 211,000 Intervention 167,000 Sept. to March - 3 staff, admin and support 280,000 480,000 Intervention + Consultant HT 204,000 350,000 862,000 830,000 Funding ESG Transition 205,200 Combined Budget 466,000 De-delegation / buyback 190,800 862,000 3.13 CHANGES TO THE HIGH NEEDS FUNDING FORMULA

Following a consultation with schools the Forum considered minor amendments the High Needs Funding Formula at the same time as agreeing the changes in High Needs places. Changes to amend the Notional SEN budget, the unit value of support and processes to agree Exceptional Needs were not recommended or approved. Members did however agree a change in respect of top up payments for pupils with additional needs. From September 2017 these additional top up payments should only be paid where pupil numbers exceed the available places. The Forum will continue to review the Formula taking into account the strategic review of provision, cost pressures and the proposed National Funding Formula.

3.14 CHANGES TO THE EARLY YEARS FUNDING FORMULA

The additional Early Years funding Wirral receives in 2017-18 of £1.5m pa is based on an hourly rate which increases from £3.79 to £4.31 per hour. In order to distribute this funding to providers a number of formula changes have been proposed and consulted on. These changes would: Increase the hourly rate for 3 and 4 year old providers to £4.00 per hour (on average) Increase provision for additional needs and central support costs. Increase hourly funding for 2 year olds from £4.85 per hour to £5.12 per hour. Provide resources to help maintain stability of existing funding for maintained nursery schools (to 2020). Whilst this will fully allocate the “protection” funding received most nursery schools are unhappy with this position and have indicated they will struggle to set a balanced budget Cap formula supplements paid to 10% of allocated budgets, (Wirral’s current percentage is 12%). The new formula proposes that the value of all supplements for deprivation, quality and flexibility are scaled back. A national Disability Access Fund of £615 will be introduced for children in receipt of Disability Living Allowances. The rates proposed will be effective from 1 April and will be applied to the Extended 30 Hour Offer from September 2017.

4.0 FINANCIAL IMPLICATIONS 4.1 The budget for 2017/18 is compiled from the base budget for 2016/17

approved by Council on 3 March 2016 and updated for any issues identified in this report.

4.2 The projected budget (DSG, reserves and council contribution) is

£252,127,600 and is shown in Appendix 1. 5.0 LEGAL IMPLICATIONS 5.1 The Council is required to agree a Budget for 2017/18 and to inform Primary

and Secondary Schools of their individual budget allocations by 28 February (Special Schools and Early Years providers by 31 March)

6.0 RESOURCE IMPLICATIONS: STAFFING, ICT AND ASSETS 6.1 The Schools Budget makes some limited provision for staff providing support

to schools, mainly within budgets for Special Education Needs and Disabilities. Most staff however are employed directly by schools where these decisions are made by governing bodies.

6.2 Schools continue to receive some funding for assets and ICT through

Formula Capital Grant Allocations. Most asset funding is directed through the Council’s Capital Programme and includes school schemes funded by capital grant allocations for Condition and Basic Need.

7.0 RELEVANT RISKS 7.1 There are increasing cost pressures in schools arising from “flat cash”

budgets. The additional costs arising from pay awards, the apprentice levy and inflation will not be met from increased budget allocations, instead they will need to be found from efficiency savings. With the exception of Pupil Premium the funding available for schools has not increased since 2011. These cost pressures are causing significant difficulties for schools across the country and Wirral is no exception.

7.2 Reports to the Schools Forum have indicated that a significant number of

schools are facing deficit budgets. Action is being taken to address the position and to agree a course of action with those schools and governing bodies concerned

8.0 ENGAGEMENT / CONSULTATION 8.1 The Budget has been considered by the Schools Forum and changes to

Schools, Early Years and High Needs funding formulae have been subject to consultation. The implications for individual schools have been discussed with governors and headteachers.

9.0 EQUALITY IMPLICATIONS 9.1 The budget and proposals contained in this report are supported by an

Equality Impact Assessment. REPORT AUTHOR: Andrew Roberts Senior Finance Manager –Families and Wellbeing Telephone 0151 666 4249 Email [email protected] APPENDICES Appendix 1 Schools Budget variations Appendix 2 Schools Budget summary SUBJECT HISTORY Council Meeting Date

Schools Forum - Schools Budget Report 2017/18 Cabinet Schools - Budget 2016/17 Schools Forum - Schools Budget Report 2016/17 Cabinet Schools Budget 2015/16 Schools Forum - Schools Budget 2015/16

18 January 2017 22 February 2016 13 January 2016

10 February 2015 14 January 2015

APPENDIX 1 SCHOOLS BUDGET VARIATIONS

Schools Budget 2017/18

£000

Dedicated Schools Grant

250,795 Use of DSG and other reserves

569

Total Grant Funding

251,364

Schools Adj Budget Base

173,215 Add back 2016/17 Academy and High Needs

69,744

242,959

Change in ISB costs Net rising rolls

2,343 Rates and rents 46 Transfer from central budgets

842

Transfer PFI Affordability Gap 3,037 Additional funding in for PFI - FM 400 (Headroom and CLC’s) Transfer FE places (from EFA) 784 High Needs Places 65 Early Years increase in hourly rates 1,389 Early Years increase 15hr Extension 2,424 Early Years Disabled Access Fund 100 Early Years Pupil Premium 115

11,545

Changes in SEN / High Needs Costs Increase in Top Ups

665 Transfer from Central budgets 58 Reduce contingency budgets (180) Transfer re Home Tuition PFI 40 Early Years – additional needs

158

741

Other Changes in Central Costs Increase (inflation) re PFI contracts

150

Reduce Combined budgets

(823) Reduce Central Budgets (3,314) Contribution re ex ESG 730 Early Years Central costs 140

(3,117)

Total Schools Expenditure

252,128

Net Schools Budget

764

APPENDIX 2 SCHOOLS BUDGET SUMMARY

Adj Estimate 2016/17

Base Estimate 2017/18

Individual Schools Budget

£

£ Primary Schools

93,463,700

100,308,700

Secondary Schools

27,081,100

94,366,800 Special Schools

8,861,700

10,040,000

SEN Bases

1,701,500

2,398,300 EMAP

-

926,700

Wirral Hospital Schools

1,356,300

1,359,100 6th Form / FE 1,264,000 Early Years

14,673,000

18,888,200

Individual Schools Budget Total

147,137,300

229,551,800 Central School Costs

Early Years

378,700

518,700 Admissions

341,800

341,800

School closure / retirement costs

86,000

60,000 Licences and subscriptions

223,800

226,100

Schools Forum

10,600

10,600 Contribution to Combined Budgets

1,698,800

875,600

PPM

249,000

- PFI Affordability Gap

2,886,500

-

Retained Duties – ex ESG 730,000 Costs delegated to / de-delegated from schools

Library Service

191,700

- Insurances

32,300

-

Minority Ethnic Achievement Service

104,100

- School Specific Contingencies

104,300

-

Special Staff Costs

699,700

- School Meals

21,200

-

Behaviour Support

92,300

- School Improvement - - High Needs Pupils

Statements

3,799,000

4,174,800 SEN Top Ups

8,752,200

9,175,600

High Needs Contingency 434,000 314,000 Independent Special Schools

3,689,000

3,770,000

Home Tuition

308,900

348,900 Support for SEN

2,031,500

1,971,500

Special School Transport

58,200

58,200 Non delegated School Costs Total

26,193,600

22,575,800

Total School and Central Costs

173,330,900

252,127,600

Dedicated Schools Grant Total

(172,175,500)

(250,795,200) Use of Reserves

(568,900)

(568,900)

Grand Total

586,500

763,500

MEDIUM TERM FINANCIAL STRATEGY

2017/18 – 2020/21

This section contains a summary of the Medium Term Financial Strategy for 2017/21 that was agreed by Council on 6 March 2017 and considers financial issues facing the Council at a strategic, rather than a Functional or operational level. Covering more than one year it is subject to an annual review. The following pages contain a copy of the Cabinet report than summaries the Strategy. A full copy of the strategy can be found on the Councils website – follow the link below and click on the heading Medium Term Financial Strategy. http://www.wirral.gov.uk/about-council/performance-and-spending/financial-

planning

http://www.wirral.gov.uk/about-council/performance-and-spending/financial-planning

http://www.wirral.gov.uk/about-council/performance-and-spending/financial-planning

COUNCILLOR PHIL DAVIES

CABINET

20 FEBRUARY 2017

MEDIUM TERM FINANCIAL STRATEGY

2017/18 - 2020/21

Councillor Phil Davies (Leader of the Council) said: ‘We continue to face huge financial pressures, as increasing demand, rising costs and ongoing austerity policies combine to place unprecedented strain on our budget, and services. We must do all we can to plan long term, put in place sustainable and radical change which allows us to continue providing the services which our most important to residents’. REPORT SUMMARY The Autumn Statements in 2015 and 2016 plus the Spending Review 2015 reiterated that Council funding will reduce into the medium term and that reductions to core funding will continue. The Government is phasing out the main Revenue Support Grant which provides funding for all services. By 2020 local authorities will retain 100% of Business Rates collected locally. In moving to this position the Government with the Local Government Association and through the Business Rates Retention Scheme Pilots is looking at how this can be implemented and inform the future distribution of resources. This report presents the Medium Term Financial Strategy 2017/18-2020/21 based on what is an evolving system of funding and a number of key questions are yet to be answered. However it is clear that the scale of the financial challenges remains. The report sets out the steps it is proposed are taken to ensure the Council sets balanced budgets while continuing to deliver the Wirral Plan. The Strategy includes a set of indicative financial proposals for 2018/19-2020/21.

The Medium Term Financial Strategy and these proposals will be developed further over the coming year in order to close the medium term budget funding gap and set the 2018/19 Budget. The approach will also ensure Council resources are prioritised to those actions that achieve most in terms of the delivery of the Wirral Plan pledges. Since the approval of the Wirral Plan in July 2015, considerable progress has been made in all areas of the Wirral Plan. At the same time the Council has been moving forward with an integrated approach to planning policy and financial strategy on a long term basis. This is to ensure that our resources are targeted in accordance with the priorities identified in the Wirral Plan. This matter affects all Wards within the Borough and is therefore a key decision. RECOMMENDATIONS The Cabinet is asked to agree and recommend to Full Council: 1 In respect Medium Term Financial Strategy 2017/18-2020/21

e) The Medium Term Financial Strategy 2017/21.

f) The development of indicative proposals for the years 2018/19-2020/21 as part of the implementation of the Councils Medium Term Financial Strategy as set out in Annex 1.

g) The Flexible Use of Capital Receipts Strategy 2017/18 as set out in

Annex 2.

h) To regular updates being presented to Cabinet on the progress of the implementation of the Medium Term Financial Strategy.

2 In respect to the Treasury Management Strategy 2017/20

a) The Treasury Management Strategy 2017/20.

b) The adoption of the Prudential Indicators.

c) The Minimum Revenue Provision Policy for 2017/18.

d) The Council Officers listed in Annex G of the Treasury Management Strategy to approve payments from the Council’s bank account for all treasury management activities.

SUPPORTING INFORMATION 10.0 REASONS FOR RECOMMENDATIONS 1.1 An effective Medium Term Financial Strategy and Wirral Plan are necessary

to ensure that the Council functions well. It is important that Councillors and residents are aware of the scale of the financial issues facing the Council. Updates to the financial projections for future years are made on a regular basis. While the Wirral Plan identifies how the 20 Pledges are to be achieved, the annual budget demonstrates in part how these are to be delivered. The Medium Term Financial Strategy indicates the resource issues and principles that shape not only the Budget for 2017/18 but also the future budgets by identifying current issues as well as potential developments / related issues. It is through the Strategy that future revenue and capital budgets are developed.

1.2 The Chartered Institute of Public Finance and Accountancy’s Code of

Practice for Treasury Management in Public Services (the “CIPFA TM Code”) and the Prudential Code require local authorities to determine the Treasury Management Strategy Statement (TMSS) and Prudential Indicators on an annual basis. The TMSS also incorporates the Investment Strategy as required under the CLG’s Investment Guidance.

1.3 The Local Authorities (Capital Finance and Accounting) (England)

(Amendment) Regulations 2008 (SI 2008/414) places a duty on local authorities to make a prudent provision for debt redemption. Guidance on Minimum Revenue Provision has been issued by the Secretary of State and local authorities are required to “have regard” to such Guidance under section 21(1A) of the Local Government Act 2003.

11.0 OTHER OPTIONS CONSIDERED 2.1 The Wirral Plan and the Medium Term Financial Strategy are key policy

documents and drive all other business planning processes within the Council. Consequently they are vital for the Council’s future development. Therefore no other options were considered.

3.0 MEDIUM TERM FINANCIAL STRATEGY 2017/18-2020/21 3.1 Over the period 2017/18-2020/21 the Council will face further financial

challenges. The Medium Term Financial Strategy focuses on ensuring that resources are targeted to the 20 Pledges while operating within the reduced financial resources that will be available. The last Medium Term Financial Strategy was approved in February 2016 and covered 2016/17-2020/21.

3.2 The Budget Gap reported to Cabinet 8 December 2016 showed:-

Budget Projections 2017/18-2020/21 at December 2016

PROJECTIONS 17/18 £m

18/19 £m

19/20 £m

20/21 £m

Original Projected Spend 286 304 322 340 Original Projected Income 241 234 227 208 Cumulative Budget Gap 45 70 95 132 Annual Budget Gap 45 25 25 37

The projected 4-year budget gap reported to Cabinet in December 2016 was £132 million. The Provisional Local Government Settlement announced in December 2016 provided further details of potential funding for the MTFS period. A number of elements of future funding are subject to development and further decision. This means that there is a degree of uncertainty on the detail relating to:

• The phasing out of Revenue Support Grant and the retention of all

Business Rates generated nationally. • The transfer of new responsibilities including the funding of public health

to local government. • The retention of any mechanism to fund needs in areas where the

potential to self-fund services is limited. • The treatment and level of specific grants. • The performance of the economy post Brexit and the impact on public

sector finances. 3.3 Based upon the details released by the Government in December 2016, and

from the February 2017 release regarding the Liverpool City Region 100% Business Rates Retention Pilot Scheme the projections over the MTFS period are similar to those previously forecast.

3.4 Wirral Council continues to seek to safeguard those services which it

considers to be its highest priority and the approach for the period of the MTFS will be to minimise cuts to services which impact on – particularly – our most vulnerable residents. In 2016/17 the budget deficit was closed and the budget balanced through a strategic, prioritised and themed approach to achieving major savings. The Council took tough decisions but through a structured approach. Our latest predictions for the MTFS period show that pressures are increasing especially in the area of social care.

3.5 The Medium Term Financial Strategy, as well as providing further financial

background to the period, sets out the Councils financial strategy over the next few years, the responses and approaches that may be adopted to meet the challenges faced and to close the funding gap. The Medium Term Financial Strategy contains the following sections:

• Overview of the period 2017/18-2020/21 • Financial overview of 2017/18-2020/21 • Financial Strategy 2017/18-2020/21 • General Fund Balances and Earmarked Reserves • Capital, Treasury Management and Asset Management

3.6 Wherever a financial estimate can be made of likely events this has been

included. Given the level of assumptions for any projection of this type, only significant items have been included. The aim of this Strategy is not to give provisional budget figures, but to provide the Council with a framework with which to support planning considerations for the medium term. The tables within the Medium Term Financial Strategy are dependent on the completion of the setting of the budget for 2017/18.

3.7 The MTFS and agreement of proposed savings in March 2017 will balance

the Councils budget for 2017/18 and indicative proposals for the period 2018/19-2020/21. The Autumn Statement 2016 and Local Government Finance Settlement have confirmed that the Council will face a funding gap until the end of the MTFS period. While a number of financial details of the operation across this period remain uncertain the direction of travel is clear. To enable the Council to use its limited financial resources in ways that ensure the delivery of the Wirral Plan and assess opportunities for savings, there is a need to start work immediately on our future financial plans.

3.8 The work should build on and revisit the work that has been done over

2016/17. The Council in the period 2018/19-2020/21 faces continued financial constraints. Aligned to this the Council will in 2020 assume full responsibility for the raising and collection of income generated locally and used to fund the services accessed by Wirral residents. The scale of the challenge in the coming years requires early preparation and this report describes how the Council will seek to establish a sustainable financial position through the development of a number of financial proposals in 2017/18. These form the basis of plans for closing the funding gap over the Medium Term Financial Strategy timeframe.

3.9 The development of the indicative financial proposals aims to be through a

“One Council”, aligned approach to action planning and budgeting. It will utilise the insight and intelligence that has developed in the forming of strategies that support achievement of the Wirral Plan.

3.10 All relevant service areas will be asked to develop the indicative proposals

presented for the period 2018/19 – 2020/21. The proposals are themed into the following:

• Delivering Differently • Income and Resource Management • Service Changes

3.11 An element of our approach to planning for the long term and delivering

major change is directed through the Transformation Programme. It is an ongoing programme to both transform our services and achieve significant savings. While not sufficient to cover the total funding gap Transformation forms a key part of the budget strategy for 2017/18 and beyond. The costs of the programme are to be covered by a revenue reserve and capital funding through the flexible use of capital receipts powers that last until March 2019.

3.12 The Medium Term Financial Strategy incorporates the Treasury

Management Strategy. This remains a key area of the financial strategy, especially with low interest rates and limited investment opportunity. It is included in Annex 4 of the Strategy and is subject to approval by the Council at the same time as the budget. The following paragraphs are specific to the strategy and highlighted to assist Members in their consideration of the Treasury Management Strategy.

3.13 CIPFA has defined treasury management as: “the management of the

organisation’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”

3.14 The Council endorses this definition and acknowledges that effective

treasury management will provide support towards the achievement of its business and service objectives. It is, therefore, committed to the principles of achieving value for money in treasury management and to employing suitable comprehensive performance measurement techniques, within the context of effective treasury management.

3.15 The purpose of the Treasury Management Strategy Statement is to set:

• Treasury Management Strategy for 2017/20. • Annual Investment Strategy for 2017/18 • Minimum Revenue Provision (MRP) Statement • Treasury Management Policy Statement • Prudential Indicators for 2017/18, 2018/19 and 2019/20 • Authorised Signatories for Treasury Management Activity

4.0 FINANCIAL IMPLICATIONS 4.1 The budget setting and planning process is integrated with the Wirral Plan. A

process has been set out in this report that will determine how resources will continue to be directed to support the delivery of the 20 Pledges. Also detailed is an approach to the planning required to meet the continuing financial challenges the Council faces in the period 2017/18-2020/21. Further resource implications are detailed within the Medium Term Financial Strategy and these implications are reviewed by the reports revising the financial position submitted to Cabinet throughout the year.

5.0 LEGAL IMPLICATIONS 5.1 There are none arising out of this report. 6.0 RESOURCE IMPLICATIONS: ICT, STAFFING AND ASSETS 6.1 A process is currently underway to determine the resources which are

required to deliver the 20 pledges through the development of supporting strategies.

7.0 RELEVANT RISKS 7.1 The Medium Term Financial Strategy provides a strategic overview of the

issues facing future authority finances and includes a risk assessment. 7.2 The Council is responsible for its treasury decisions and activity. No treasury

management activity is without risk. The successful identification, monitoring and control of risk are important and integral elements of its treasury management activities. The main risks to the treasury activities are:

• Liquidity Risk (Inadequate cash resources) • Market or Interest Rate Risk (Fluctuations in interest rate levels) • Inflation Risk (Exposure to inflation) • Credit and Counterparty Risk (Security of investments) • Refinancing Risk (Impact of debt maturing in future years) • Legal and Regulatory Risk

8.0 ENGAGEMENT/CONSULTATION 8.1 The Wirral Plan and underpinning Pledge Strategies have been developed

through engagement with a wide range of partners and subject to wide consultation with residents, partners and other stakeholders.

9.0 EQUALITY IMPLICATIONS 9.1 There are no equality implications arising out of the Medium Term Financial

Strategy 2017/18-2020/21. REPORT AUTHOR: Jenny Spick

Senior Manager: Finance Telephone 0151 666 3582 Email [email protected] APPENDICES Appendix 1: Medium Term Financial Strategy 2017/18-2020/21 REFERENCE MATERIAL CLG Local Authority Investment Guidance, 2004 CLG Changes to the Capital Financing System Consultation, 2009 Code of Practice for Treasury Management in Public Services (2011 Edition), CIPFA 2011. Prudential Code for Capital Finance in Local Authorities (2011 Edition), CIPFA 2011. Spending Review and Autumn Statement 2015 HM Treasury Autumn Statement 2016 HM Treasury SUBJECT HISTORY Council Meeting Date Medium Term Financial Strategy Cabinet - Future Financial Position Cabinet - Medium Term Financial Strategy Cabinet- Council Budget 2016/17 and Medium Term Financial Strategy Cabinet - Medium Term Financial Strategy Cabinet - Medium Term Financial Strategy and Council Budget 2017/18 Treasury Management Cabinet - Treasury Management Annual Report 2013/14 Cabinet - Treasury Management Annual Report 2014/15 Cabinet - Treasury Management Annual Report 2015/16

9 December 2014 10 February 2015 17 December 2015 22 February 2016 8 December 2016 7 July 2014 13 July 2015 18 July 2016

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