Baffins Neighbourhood ForumBudget Update

2011/12 to 2014/15

Roger Ching

Strategic Director & S151 Officer

City Council 8 February 2011

Reports Approved:-

• Revenue Budget 2010/11 to 2014/15– Day to day running costs of services (salaries,

premises costs, contracts etc.)

• Capital Programme 2010/11 to 2015/16– Improvements to (or) new buildings, land &

equipment

Two Types of Expenditure

• Revenue

• Capital

Revenue Expenditure

Spending on running costs of services

- salaries of staff

- energy costs

- capital financing costs

Capital Expenditure

Payments made to buy or provide

assets which will be of long term

value to the Authority- Land- Buildings- Equipment

A Simple Illustration

Running your car…………..

Buying the car = Capital Expenditure

Running the car = Revenue Expenditure• repairs• insurance• petrol• repayment of loan

Revenue Budget

2011/12

Revenue Budget• Sets out the City Council’s day to day expenditure

and how it is funded• Total expenditure is funded by a mixture of:-

- Government Grants

- Business Rates

- Council Tax

- Income from fees and charges

- Contribution from Revenue Reserves• Government requires Local Authorities to set a

balanced budget each year • Aim is that In-Year Expenditure equals

In-Year Income

Examples of Services Provided

Front Line Services Support Services

Education Information Services

Safeguarding of Children Human Resources

Environmental Health Finance

Highways Infrastructure Asset Management

Adult Social Care Legal Services

Planning

Refuse Collection

Trading Standards

Libraries & Museums

Budget Headlines

• Formula Grant reduction• Council Tax freeze (offset by new grant)• Council Tax collection rate of 98.5%• No allowance for pay award• Inflation for all services• Reduction in contingency provision• Net savings of £15.0m recommended by

Cabinet

Local Government Finance Settlement 2011/12

• Overall reduction in grant (cash):2011/12 £11.3m or 9.07%2012/13 £ 6.5m or 5.69%

But - like for like basis:• Overall reduction in grant

2011/12 £14.3m or 11.42%2012/13 £ 5.3m or 4.76%

Revenue Budget Process 2011/12

• Target savings set at £15.0m • Members have considered the impact on

corporate priorities, service delivery, performance and value for money of :

- Officer Savings Proposals

- Staff and Residents’ Savings Suggestions

- Budget Pressures

Revenue Budget Process 2011/12

• Recommended Savings set out in Appendix C• Recommended Budget Pressures set out in

Appendix D• Savings result in the loss of 184 posts (124

full time and 60 part time) equal to 151 Full Time Equivalent

• Savings include Senior Management reductions

Savings Target £15.0m

£’000

Review of Original Forecast (1,190)

Add Savings (Appendix C) (17,863)

Gross Savings (19,053)

Less

Budget Pressures (Appendix D) 4,053

Net Savings

(15,000)

Budget 2011/12Portfolio Savings Pressures Change

£’000 £’000 £’000

Children’s Services (3,211) 574 (2,637)

Culture Leisure & Sport (1,454) 1,299 (155)

Education (2,599) 74 (2,525)

Environment & Com.Safety (1,537) 100 (1,437)

Health & Social Care (3,372) 1,200 (2,172)

Housing (899) 29 (870)

Leader (64) - (64)

PRED (302) 30 (272)

Resources (3,474) 600 (2,874)

Traffic & Transportation (906) 25 (881)

Other Expenditure etc (45) 122 77

TOTAL (17,863) 4,053 (13,810)

NB. £1.8m added to Children’s Social Care 2010/11 and on-going

Budget 2011/12

£m

Gross Expenditure 534.460

Less Gross Income 372.993

161.467

Less Government Grants 91.263

70.204

Less Collection Fund Surplus 1.355

Required from Council Tax 68.849

Council Tax 2011/12

Council Tax Requirement £68.849m

Council Tax Base 59,914.9

Council Tax at Band D 2011/12 £1,149.12

Council Tax increase of 0%

Total Tax 2011/12 (Band D) 2010/11 2011/12

Increase

£ £ %

Portsmouth City Council 1,149.12 1,149.12 0.00

Hampshire Police Authority 146.25 146.25 0.00

Hampshire Fire & Rescue 61.38 61.38 0.00

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

Tax for All BandsBand 2011/12

A £ 904.50

B £1,055.25

C £1,206.00

D £1,356.75

E £1,658.25

F £1,959.75

G £2,261.25

H £2,713.50

National Non Domestic Rates

• Five yearly business rate revaluation in 2009 • For 2011/12, businesses will pay 43.3p for

every £1 rateable value (41.4p in 2010/11)• Money collected is paid into a National Pool• Portsmouth receives a share of the National

Pool as part of Formula Grant

Forecast Budgets

2012/13 to 2014/15

Forecast Budgets 2012/13 to 2014/15

Assumptions include:• Formula Grant reduction of 7.48% in 2012/13,

0.85% in 2013/14 and 5.6% in 2014/15• 2.5% increase in Council Tax each year• Council Tax collection rate of 98.5%• Inflation for all services• Ongoing effect of savings and budget

pressures approved for 2011/12• Allowance for unavoidable budget pressures• Allowance for other known budget pressures

Forecast Budgets 2012/13 to 2014/15

• Savings to be found in future yearsUnderlying In-Year

Cumulative Budget Deficit Target Saving

£m £m £m 2012/13 7.142 8.0 8.0 2013/14 10.467 7.0 15.0 2014/15 22.326 7.0 22.0

• Savings targets allocated across all services

Target Savings 2012/13 to 2014/15

• Targets for Adult and Children’s Social Care reduced by 50%

• Targets for all other services shared proportionately

• Further review of apportionment of savings targets

Budget 2011/12In Summary• Financially challenging • Budget aims to protect services within tight

financial constraints• Council Tax freeze• Budget deficit of £4.739m balanced by

contribution from Reserves• £22m further savings to be made in 2012/13,

2013/14 and 2014/15

Capital Programme

2010/11 to 2015/16

Capital Funding Sources

Funding sources include:-• Borrowing

- Supported (ie Government support for

repayments)

- Prudential Borrowing (ie tax for repayments) – used

only for Spend to Save Schemes

• Capital Receipts• Grants/Other External Contributions• Revenue Contributions

Proposed New Capital Schemes

Includes:• Berth 2 Extension (Port)• Decent Homes Standards• Housing Support for Vulnerable People• Hilsea Splashpool• Landlords Maintenance• North End Regeneration• Road Schemes (Local Transport Plan)• Schools Modernisation

Major Schemes Requiring Funding

• Northern Quarter• Somerstown Phase 2• Tipner• Northern Road Bridge• Guildhall• Schools Strategy

Questions?