Financial Outlook and Update on Parish Precepts

Parish Liaison meetings - November 2013

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Funding Outlook

• Core funding cuts of circa 15% per annum - 2015/16 to 2017/18

• Equates to around a 30% RSG cut each year

• Looking at a £11m combined savings target for both councils over the next 4 years

• New Homes Bonus - 35% top slice (reduction) from 2015/16

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Key Issues

• Medium Term: Creating a clear plan to achieve our priorities and deal with the reduction in core funding

• Short-Term: Setting a Balanced Budget for 2014/15

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Medium Term

Two key components

 

• Priority Based Budgeting (PBB)

• A Medium Term Financial Strategy/Plan

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Priority Based Budgeting

• Review resources to assess how they contribute to priorities (activity mapping)

• Identify opportunities for savings / income generation through transformation

• Financial scenario modelling to develop longer term budget

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Priority Based Budgeting

5 Stages

1.Confirm strategic vision/direction (done)

2.Establish current cost base and core/non-core services

3.Identify and quantify opportunities for savings through transformation. Develop Business Cases

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Priority Based Budgeting

4. Financial Scenario Modelling. Decision packages - Prioritisation roundtable workshops

5. Develop longer term budget - fully cost decision packages

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Medium Term Financial Strategy/Plan

• Reduce our dependence on core grant

• Maximising return on our investment

• Increasing our borrowing to invest to save

• Further grow income opportunities

• Only do those things where a clear business case demonstrates it makes sense

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What will this incorporate?

• Reforming our resource base to reflect new incentivised and target Government funding streams/pots e.g. NHB, TCA

• Reflecting….. Transformation programme outcomes, New Homes Bonus, Invest to Save projects, Business Rates growth, Reserves and Council Tax strategy

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What will this incorporate?

• Outcomes from the PBB work

• 3-5 year rolling finance plans and budgets

• Radically reviewing financial planning and management arrangements and roles

• Focusing capacity on income generation, cost reduction and other added-value activity around resource management

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Outcome

Within 5 years the Councils are sustainable notwithstanding reduced core funding

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Potential Position - 2014/15

Combined Budget Gap:

• July forecast £3.6m

• Review of cost pressures and potential savings of £1.9m

• Remaining gap £1.7m

How can this be found?

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Potential Position - 2014/15

• Income generation opportunities - including growth agenda (more homes, Council Taxbase and business rates growth)

• Short-term Invest to Save projects to release efficiency savings

• Cost/savings sharing between the two councils

• Council Housing cost recharges review

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Potential Position - 2014/15

• Managing cost pressures

• Contracts and non-pay costs review

• Temporary use of NHB – to fund staff time spent on strategic projects

• Capital investment plans 2014/15 onwards – asset utilisation and borrowing

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Update on Parish Precepts• LCTR scheme and funding workshops

• Opportunity to increase understanding, discuss and share issues and concerns

• Affect on Town & Parish Council precepts and taxpayers:

- Short-term

- Medium-term

NB: Two thirds increased precept

and Council Tax in 2013/14 15

Update on Parish Precepts

• Council Tax reductions and funding now shared between all tiers of LG

• BDC, MSDC, other councils – capping, budget cuts and income generation options

• Now applies to Towns & Parishes

• Taxbase drives Council Tax and precept levels. Growth = increase

• Options and Impacts explored

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Update on Parish Precepts

• ‘Capping’ – limits precepts. Cost of a referendum?

• Will only apply to bigger parishes?

• What will the basis be?

• Size of Council/Precept? Council Tax Level?

• When will an announcement be made – Autumn Statement (5 Dec)? Later?

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Update on Parish Precepts

• SALC views/analysis:

- Administration Subsidy (confusion?)

- Capping ignores local context and ‘localism’ agenda

- 34% of local councils precept less than £5,000

- 47% of local councils have a Band D Council Tax of < £30

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Update on Parish Precepts

• Ongoing communication and information needs e.g. Taxbase

• Offer of 1:1’s - if necessary

• Continue to work together with you and SALC

• Anything else we can do to help?

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