brighton and hove city council budget papers

8/13/2019 Brighton and Hove City Council Budget papers

http://slidepdf.com/reader/full/brighton-and-hove-city-council-budget-papers 1/26

POLICY & RESOURCESCOMMITTEE

Agenda Item 121

Brighton & Hove City Council

Subject: Genera !und Re"enue #udget& C$unc% Ta 2'1()1*

+ate $, Meet%ng: 1- !ebruar. 2'1( Re/$rt $,: Eecut%"e +%rect$r $, !%nance & Re0$urce0

C$ntact O,,%cer:ame:

Mar Ireand3ame0 4enge"ed

Te:25612('25612(2

Ema%:mar7%reand8br%g9t$n69$"e7g$"7u jame079enge"ed8br%g9t$n69$"e7g$"7u

ard;0< a,,ected: A

!OR GEERAL RELEASE

Note: The special circumstances for non-compliance with Access to InformationProceure !ule " an #ection $%%B'( of the )ocal *overnment Act $+, arethat information on the %$./$' financial position was still 0eing finalise anofficers were awaiting critical information a0out the council ta1 threshol thethreshol a0ove which an increase in council ta1 re2uires confirmation from alocal referenum( an the final )ocal *overnment *rant #ettlement for %$'/$"from the 3epartment for Communities an )ocal *overnment C)*(4

17 PURPOSE O! REPORT A+ POLICY COTE=T:

$4$ This report sets out the final proposals for the *eneral 5un !evenue Bugetan Council Ta1 for %$'/$"4 It ta6es into account fee0ac6 an eviencereceive 0y the council through consultation7 the scrutiny process an e2ualitiesimpact assessments4 It also sets out the approach to the 0uget setting processin particular the lin6s to the Corporate Plan an highlights ways in whichinvestment in 6ey preventative services is 0eing sustaine an in some casesenhance4

$4 The report ta6es into account the recent ecisions mae 0y Policy & !esourcesCommittee on the council ta10ase an 0usiness rates ta10ase an 0y 5ullCouncil on council ta1 iscounts an e1emptions4 The original proposals werealso pu0lishe prior to the Provisional )ocal *overnment 5inance #ettlement soa num0er of changes to funing assumptions have also 0een mae4

$4. The core of the 0uget is 0ase on an assume council ta1 threshol increaseof 84 However7 the propose increase in council ta1 is '4,"8 which7 if agree7woul re2uire a referenum in accorance with Chapter I9A of the )ocal*overnment 5inance Act $++ an associate regulations4



27 RECOMME+ATIOS:

That Policy & !esources Committee:;

4$ !ecommens to Council:

4$4$ The core elements of the %$'/$" *eneral 5un !evenue Buget proposalscontaine in the 0oy of this report which have 0een 0ase on a thresholcouncil ta1 increase7 su0<ect to recommenation 4.7 incluing:

• The %$'/$" 0uget allocations to services as set out in appeni1 $4

• The council=s net *eneral 5un 0uget re2uirement for %$'/$" of>"4.m4

• The 0uget savings pac6age as set out in appeni1 '4

• The contingency 0uget of >'4.,m as set out in ta0le ?4

• The reserves allocations as set out in paragraph .4.+ an ta0le @4

• The 0orrowing limit for the year commencing $ April %$' of >.?%m4

• The annual inimum !evenue Provision statement as set out in appeni1 $%4

• The Pruential Inicators as set out in appeni1 $$ to this report4

• The propose responses to the scrutiny recommenations as set out inappeni1 $@4

4$4 A '4,"8 increase in the Brighton & Hove element of the council ta1 with:

• the aitional resources generate 0eing use to reuce the 0uget

savings pac6age as set out in appeni1 $,

• the revise 0uget allocations as set out in appeni1 $,

• the funing of the costs associate with holing a referenum inaccorance with Chapter I9A of the )ocal *overnment 5inance Act$++ an associate regulations as set out in appeni1 $,

• the #u0stitute Buget incluing aitional costs as set out in appeni1 $,which woul come into effect if a referenum re<ecte the propose

'4,"8 increase in council ta14

4$4. That the 2ualities Impact Assessments set out in Appeni1 $. 0e note4

4 Note the revise eium Term 5inancial #trategy an resource pro<ections for%$'/$" to %$+/% as set out in appeni1 ?4

4. Note that supplementary information neee to set the overall council ta1 will 0eprovie for the 0uget setting Council as liste in paragraph '4'4

4' 5or the purposes of enacting the Business !ates iscount an relief changesannounce in the government=s Autumn #tatement %$.7 grant elegateauthority to the 1ecutive 3irector of 5inance & !esources to esign an



aminister the scheme in accorance with government guielines as set out inparagraph .4$,4

-7 COTE=T) #AC>GROU+ I!ORMATIO:

Structure $, t9e re/$rt

.4$ The report provies full information on function an funing changes an otherlegal an financial matters that have resource implications for the %$'/$"0uget4 The full set of information provie in this report is liste here as an aito navigation:

• L$ca G$"ernment !%nance Settement - upates are given on the latestposition regaring government grant announcements

• Re,erendum T9re09$d and C$unc% Ta !ree?e Grant ; information isprovie a0out recent government announcements

• #u0%ne00 Rate0 Retent%$n ; upate forecasts of the council=s share of0usiness rates for this year an ne1t are inclue

• #etter Care !und ; information a0out the preparation an planne changesrelating to the Better Care 5un

• Sc9$$0 !und%ng ; Information on 3eicate #chools *rant 3#*( anPupil Premium

• Ot9er G$"ernment Grant0 and e@ 4$me0 #$nu0 - Information on othergovernment grants with etails in appeni1 @ an the New Homes Bonus

final allocations for %$'/$"

• !ee0 and C9arge0 ; ore information of the 5ees an Charges is givenwithin the Buget #trategy appeni1 .

• Re0er"e0 P$0%t%$n - a re-assessment is inclue of the level of reservesavaila0le to fun one-off items of e1peniture an / or provie short termsupport for the 0uget4 A full review of reserves is inclue in appeni1 ,

• E/end%ture E0t%mate0 - incluing information on the latest position in%$./$'7 internal transfers an other a<ustments7 an analysis of 0ugetchanges since %$./$'7 inflation7 ris6 provisions7 commitments an

reinvestment7 investment in preventative services an service pressures

• #udget Strateg%e0 and Sa"%ng0 - incluing savings proposals an potentialstaffing implications

• Annua M%n%mum Re"enue Pr$"%0%$n ;MRP< Statement and Prudent%aInd%cat$r0 ; information on the full statement is attache at appeni1 $% anthe pruential inicators are shown in appeni1 $$

• C$r/$rate #udget0 %ncud%ng C$nt%ngenc. - information on changes tothe main corporate 0ugets incluing the resources hel in contingency for%$'/$"



• C$unc% Ta ; incluing council ta17 referenum an the supplementaryinformation re2uire for Buget Council

• Med%um Term !%nanc%a Strategy - Information on the financial strategyover the ne1t @ years is inclue in appeni1 ? alongsie an assessment ofris6s in appeni1 +

• Re/$rt $, t9e C9%e, !%nance O,,%cer ; incluing the ro0ustness ofestimates7 ae2uacy of reserves7 an an assurance statement 0y thecouncil=s section $"$ officer

• C$mmun%t. Engagement C$n0utat%$n and Scrut%n. ; etails ofconsultation an engagement incluing a summary report on 0ugetconsultation an the report from scrutiny in appeni1 $" an $@4

Pr$jected Re0$urce0 a"a%abe %n 2'1()1*

Local Government Finance Settlement

.4 The final )ocal *overnment 5inance settlement was announce on the "th 5e0ruary %$' 0ut some government grant information still remainsunpu0lishe4 The 5inal settlement contains the funing assessment for %$'/$"an illustrative figures for %$"/$@4 The ta0le 0elow shows comparisons with%$./$'4

Tabe 1 Brighton & Hove City Council

5inal

%$./$'> million

5inal

%$'/$"> million

Illustrative

%$"/$@> million

!evenue #upport *rant !#*( ,,4@" @.4'' '"4'".

*overnment assume 0usinessrates income retaine 0y the council

"%4%,+ "$4%"" "4'@'

Top-up *rant $4"?$ $4@$$ $4@"@

Total 5uning $+4.$$ $$@4$%? ++4",

!euction -$.4%. -$@4".@

Percentage -$%48 -$'48

Note: #ome ta0les may not a up e1actly ue to rouning4

.4. The government assume level of 0usiness rates retaine locally is use in thegrant calculation an is ifferent from the actual 0usiness rates forecast to 0ecollecte locally which is shown later in this report4 The top-up grant wasetermine when the 0usiness rates retention system was introuce to smoothchanges from the previous system an is increase 0y inflation each year4

.4' The reuctions in funing shown in ta0le $ are cash reuctions in funing an

e1clue changes in specific government grants4 In real terms i4e4 ta6ing into



account inflation7 the percentage reuctions increase to -$4.8 for %$'/$" an-$"4,8 for %$"/$@4

.4" The government uses a Dspening powerE calculation in the settlement to ma6ecomparisons 0etween authorities4 It oes not measure li6e-for-li6e changes infuning from one year to the ne1t 0ut inclues reallocate funing such aspossi0le contri0utions from the NH# to support social care 0ugets an spreasthese over a much 0igger funing 0aseline which inclues other grants ancouncil ta14 Their calculation oes not reflect all of the new 0urens place onlocal authorities to provie aitional services neither oes it ta6e into accountinflation7 emographic an other cost pressures that councils are facing4 Theta0le 0elow shows the Dspening powerE changes as set out 0y C)* in the finalsettlement4

Tabe 2 CLG S/end%ng P$@er ,%gure0

Brighton &

Hove CityCouncil

National

Average

Fnitary

Average

Provisional %$'/$" -.4'8 -4+8 -4+8

Illustrative %$"/$@ -4%8 -$4?8 -$4?8

.4@ In %$'/$" the highest reuctions in spening power are in the poorer areas withthe greatest nees such as Hull an )iverpool which have reuctions of -"4"8an "4'8 respectively4 Ghereas wealthier areas with lower nees such asCentral Beforshire an Go6ingham have small increases in spening power4 A similar pattern is repeate in %$"/$@4

Re,erendum T9re09$d and C$unc% Ta !ree?e Grant

.4, The *overnment has announce that the threshol a0ove which an increase incouncil ta1 re2uires confirmation from a local referenum will 0e 84 Allauthorities must also 0e minful of the impact of changes in levies on thereferenum trigger4 Any proposal to increase council ta1 a0ove the threshol willnee to 0e accompanie 0y an agree su0stitute 0uget which woul nee to0e implemente if the increase is vote own in the referenum4

.4? The *overnment ha earlier announce that council ta1 freee grant for

%$$/$7 %$./$'7 %$'/$" an %$"/$@ will 0e protecte in 0aseline funing infuture years4 This means that there is no specific cliff ege= when the freeegrants en for the authorities that have accepte the grant funing as thefuning reuction will now 0e sprea across all authorities whether they haveha a council ta1 freee in those years or not4

.4+ The grant settlement inclues new council ta1 freee grants for %$'/$" an%$"/$@ e2uivalent to a $8 increase in council ta1 for those councils whoagree to freee their council ta1 in %$'/$" an/or %$"/$@4 However7 the grantwill 0e calculate using the council ta1 0ase 0efore a<ustments are mae forthe council ta1 reuction scheme ma6ing the grant for Brighton & Hove a0out

>$4m in each year4



.4$% 5ull Council on , 5e0ruary %$' will etermine 0oth the 0uget an council ta1for %$'/$" 0ut a ecision to freee the council ta1 ne1t year will re2uireappro1imately >%4?m aitional recurrent savings to 0e ientifie an agreecompare to the threshol increase of 84 Increases a0ove the threshol willgenerate appro1imately >$m aitional resources for each $8 increase incouncil ta1 0ut will also generate one-off costs lin6e to the referenum as set

out later in this report4

.4$$ The impact of implementing council ta1 freees in %$$/$ an %$/$.7 insteaof the ma1imum allowa0le increase of .4"87 has reuce the potentialresources availa0le to the council in %$'/$" 0y appro1imately >'4'm4

!$reca0t #u0%ne00 Rate Retent%$n %nc$me ,$r 2'1()1*

.4$ 3etails of the li6ely 0usiness rate retention income forecasts were set out in thereport to the January meeting of Policy & !esources Committee4 It was agreethat the final figure for %$'/$" which ha to 0e etermine 0y .$ January %$'

woul 0e elegate to the 1ecutive 3irector for 5inance & !esources inconsultation with the Chair of Policy & !esources Committee 0ecause of the laterelease of forms an guiance 0y C)*4

.4$. Ta0le . 0elow shows the forecasts of the council=s '+8 share of 0usiness ratesincome for %$./$' an %$'/$" agree 0y the 1ecutive 3irector for 5inance &!esources4

.4$' The increase in the forecast of the council=s share of 0usiness rate incomeshown in ta0le . 0elow of <ust uner >,4'm 0etween %$./$' an %$'/$" isue to the removal of a >@m one-off provision for refuns mae in %$./$'7 theassume annual uplift in the 0usiness rates pounage of 8 an the estimate

forecast growth in the 0ase4

Tabe - - 5orecasts of the council=s '+8 share of local Business !ate income

%$./$'

> million

%$'/$"

> million

Council forecast ''4%? "$4"?%

stimate #afety Net grant $4++@ -

#4.$ *rant to compensate for the changes

announce in the %$ an %$. Autumn#tatementsK

$4.%% .4$?"

Total forecast council share ',4"%' "'4,@"

5orecasts mae this time last year ',4"%' "4,@"

Change in 0usiness rates forecast - L4%%%

K It is unclear how long the *overnment will continue to pay some of thesecompensation grants4 The ecision to cap the inflationary increase at 8will nee to 0e pai every year from now on otherwise the council will losethe e2uivalent of >%4@m funing per annum4



.4$" The forecasts for 0usiness rate income in 0oth years have increase 0y a0out>m since last year although in %$./$' the improvement has 0e offset 0y ane2ual reuction in the safety net payment4 The improvement is a result of lowerthan anticipate appeals an refuns7 increases in the 0usiness rates 0ase anthe forecast 0enefits of aitional wor6 planne for %$'/$" to verify the ata onthe 0usiness rates register4

.4$@ The council aopte a strategy of allowing for all future appeals an refuns in%$./$' 0ecause this approach potentially ma1imise resources over the longerterm4 C)* have yet to pu0lish raft regulations setting out how to account forappeals an refuns an the guiance they have so far provie conflicts withproper accounting practice4 However7 the strategy aopte is also fle1i0leenough to cope with changes to the regulations within the current resourceenvelope set asie4 In %$,/$? a new revaluation will 0e implemente an it isunclear how su0se2uent appeals against the %$, rating list will 0e treate4

.4$, Mualifying Business !ates payers will 0e entitle to some new iscounts from $

April %$'7 following an announcement of changes in the *overnment=s autumnstatement4 C)* avise )ocal Authorities on .r January that they shoul usetheir iscretionary powers to set up two of these iscounts at a local level7 intanem with the government=s guielines4 The cost of the iscounts will 0e fullyreim0urse later via #ection .$ grant4 There will 0e a >$%%% iscount for shops7cafes7 restaurants an 0ars with a !atea0le 9alue of less than >"%7%%%4 #omee1clusions apply7 such as 0an6s7 0etting shops7 estate agents7 meical services7solicitors an accountants4 A "%8 iscount will 0e availa0le for 0usinesses thatmove into retail premises that have 0een empty for at least one year4 Theiscount will last for a ma1imum $? months7 an is availa0le 0etween $ April%$' an .$ arch %$@4 This scheme overlaps with our own mpty Propertyccupation 3iscount7 which also provies support for 0usinesses reoccupyingempty properties4 However7 in our scheme the iscount is $%%8 for si1 monthsfor properties with a !atea0le 9alue of less than >"7%%%7 an a iscount of "%8for si1 months if the !atea0le 9alue is 0etween >"7%%% an >."7%%%4 Ge will 0e0ringing 0ac6 proposals to this committee to reconcile the two schemes7 0ut inthe meantime we will nee to enact the *overnment=s initiative in time for $ April%$'4

#etter Care !und

.4$? In the July #pening !eview7 the *overnment announce >.4?0n per annumnationally from %$"/$@ for an Integrate Transformation 5un now 6nown asthe Better Care 5un( across ault social care an health4 >$4+ 0illion of thisfuning is alreay provie to local authorities in the e1isting NH# 5uning for#ocial Care or in other sources of grant funing such as Carers *rant an3isa0le 5acilities *rant4 The poole Better Care 5un revenue 0uget for%$'/$" is >"[email protected] incluing an anticipate aitional transfer from the NH# of>$4%'m in %$'/$" to support preparations for implementation in %$"/$@4

.4$+ In %$"/$@ the Better Care 5un Plan will 0e create from the following e1istingfuning streams7 a significant proportion of which is alreay 0eing spent 0y the

local authority on <oint health an social care priorities4 The sums currently



allocate for health an social care in Brighton an Hove in this way areientifie in the ta0le 0elow4

Table 4 : 2014/15 allocation of Better Care Fund Funding Stream

at%$na BP$t #r%g9t$n &

4$"e0Current

A$cat%$n2'1()1*

!und%ng Stream

D m%%$n D m%%$n

NH# 5uning $7+%% n/a

Carers Brea6 5uning $.% %4@%%

CC* !ea0lement 5uning .%% $4'%%

Ault #ocial Care Capital *rant $+ %4@,'

3isa0le 5acilities *rant Capital( " %4,,

Current transfer from NH# to #ocial Care +%% '4@%? Aitional transfer from NH# %$'/$"( %% $4%'

.4% Provisional figures in relation to Brighton an Hove=s allocation for %$"/$@ wererelease 0y NH# nglan on %th 3ecem0er %$. as 0elow:

Tabe *: Pr$"%0%$na ,%gure0 ,$r 2'1*)1 > million

NH# Brighton & Hove CC* $?4%@"

#ocial Care Capital *rant %4@?'

3isa0le 5acilities *rant %4+$$

T$ta #etter Care !und 157'

.4$ An element of the fun will 0e epenent on performance an outcomes will 0eagree as part of the Better Care 5un Plan against which achievements will 0emonitore4 There are clearly ris6s associate with the performance nature of thefuning an a ris6 mitigation approach will also 0e agree 0etween partners4

Sc9$$0 !und%ng

.4 5or %$./$' the 3eicate #chools *rant 3#*( was split into . notional 0loc6s:

schools7 early years an high nees4 The 3epartment for ucation 3f( willcontinue the inimum 5uning *uarantee 5*( at minus $4"8 per pupil in%$'/$"4

.4. ost of the arrangements put in place in %$./$' will remain 0ut the 3f isma6ing some changes that are esigne to further stanarise the funingformulae that are in operation across the country4

.4' The 6ey changes 0eing implemente in %$'/$" are as follows:

• )ocal Authorities )As( must ensure that at least ?%8 of elegatefuning is allocate through pupil-le factors4



• The unit rates applie for age weighte pupil units must 0e set at aminimum of >7%%% for primary age pupils an >.7%%% for seconary4

• The primary low attainment factor will inclue those pupils who faile toachieve a goo level of evelopment in the %$. assessments4 This willonly apply to this cohort for oler year groups in the school7 there will still0e the choice 0etween using the threshols of ,. an ,? points 0ecause

they were assesse uner the ol profile Brighton & Hove have opte touse ,? points(4

• The seconary low attainment factor will now 0e 0ase on the num0er ofpupils not achieving level ' in nglish $r aths at 6ey stage 4 This is achange from the %$./$' year where the measure was 0ase thenum0er of pupils not achieving level ' in nglish and aths4

• )ocal Authorities are now a0le to set ifferent lump sums for primary anseconary schools4 The ma1imum lump sum has now 0een set at>$,"7%%%4 Brighton & Hove is continuing to allocate a lump sum of>$"%7%%% to all mainstream schools4

• )ocal Authorities may top slice the 3#* to provie a falling rolls fun thatmay 0e use to protect schools with falling rolls where a population 0ulgeis e1pecte in the future7 0ut where a goo an necessary schoolcurrently has surplus places an faces an unmanagea0le funingshortfall in the short term4 Brighton & Hove is not proposing to aopt sucha fun 0ut will7 instea7 shoul circumstances arise7 consier using theschools= contingency 0uget for this purpose4

• #pecialist #pecial ucation Nees #N( places units an facilities( inmainstream schools7 whether fille or unfille7 o not count towars aschool=s pupil num0ers for the purpose of calculating its 0uget through

the funing formula4 The change is to avoi ou0le counting4

• The ate for informing mainstream schools of their 0uget shares is0eing move forwar from $" arch to ? 5e0ruary4

.4" In %$'/$"7 the pupil premium 0uget will increase from >$4?," 0illion to >4"0illion nationally4 #chools will receive >$7.%% per primary pupil who is currentlyeligi0le for free school meals 5#( or has 0een eligi0le for 5# in the past @years 5# ver @=( an >+." for seconary 5# ver @= pupils4

.4@ The government are introucing a higher rate of >$7+%% for loo6e-after chilren4

They are also e1tening the eligi0ility criteria to inclue those pupils who have0een in care for one ay or more7 as compare with the si1 months in carecurrently re2uire4 #chools will also receive >$7+%% for eligi0le pupils who have0een registere on the school census as having 0een aopte from care orleaving care uner a special guarianship or resience orer4 The servicepremium will continue to 0e e1tene so that in %$'/$"7 any pupil in receptionto year $$ who has 0een flagge as a service chil since %$$ will continue toreceive the premium ver '= measure(4 The service chil premium will 0e paito schools at the rate of >.%% per pupil4

.4, The 0uget proposals inclue in appeni1 ' involve some funing changes

0etween the 3#* an the *eneral 5un these changes are in relation to



legitimate uses of the 3#* an a report etailing the changes has 0eenprovie to an agree at the #chools 5orum4

Ot9er G$"ernment Grant0

.4? The grant allocations for %$'/$" an %$"/$@ have 0een inclue in appeni1 @

with the %$./$' allocations for comparison4 #ome grant allocations for ne1tyear have not yet 0een announce an where these are critical to the setting ofthe %$'/$" 0uget forecasts have 0een inclue4

.4+ There are some significant changes in %$"/$@ with the ening of the #ocial5un grant of >%4,"m an a %8 propose reuction of the ucational#ervices *rant4 A significant num0er of grants for %$"/$@ have not yet 0eenannounce4

e@ 4$me0 #$nu0

.4.% The New Homes Bonus NHB( is a funing incentive for local authorities largely

to facilitate the 0uiling of new homes in their area an 0ring empty homes 0ac6into use4 The funing allocation for the fourth tranche was announce in3ecem0er %$. an the council will receive >%4@?%m e1tra in %$'/$"7 of this>%4""'m is from new properties7 >%4$$m from a reuction in long term emptyproperties an >%4%$'m from affora0le homes elivere4

.4.$ em0ers are remine that NHB is fune 0y top-slicing local authority grantan for the council the loss of !#* ue to the top-slice in %$'/$" isappro1imately >$4,"m4 #o there is a net loss of funing for the council of a0out>$4$m from the fourth tranche alone4

!ee0 and C9arge0

.4. In recent years the consumer price ine1 has 0een increasing 0y over .8 perannum whilst the council ha applie a stanar rate of 8 an over time thisifference has 0een harer to sustain4 5ees an charges 0ugets for %$'/$"are assume to increase 0y a stanar inflation rate of 4"8 with the e1ceptionof par6ing charges which are planne to remain at %$./$' levels7 an penaltycharge notices par6ing fines( where the levels of fines are set 0y governmentan cannot 0e change inepenently4

.4.. The Council=s Corporate 5ees & Charges Policy re2uires that all fees ancharges are reviewe at least annually an shoul normally 0e increase 0yeither: the stanar rate of inflation7 statutory increases7 or actual increases inthe costs of proviing the service as applica0le4 Non-statutory increases a0ovethe stanar rate of inflation an/or changes to concessions or su0siies shoul0e reporte to an consiere at the relevant service committee4 Ghereappropriate7 etails of fees an charges changes for %$'/$" have 0eenpresente to the relevant service committee prior to Buget Council4 In aition7an overarching review of fees an charges has 0een unerta6en to ensure thereis no isproportionate or cumulative e2uality impact of propose changes to feesan charges on vulnera0le7 minority or other groups4 The results of this review

have 0een inclue in appeni1 $.4



Re0er"e0

.4.' The wor6ing 0alance is planne to 0e maintaine at >+m over the perio of theeium Term 5inancial #trategy4 The review of reserves an the wor6ing0alance is inclue at appeni1 ,4

.4." The following ta0le shows the pro<ecte general reserves position assumingspening is in line with the latest pro<ections for %$./$' shown in the TBmonth + report4

.4.@ The ta0le inclues the release of specific reserves to support the %$'/$"0uget with allocations ientifie in paragraph .4.+4

Tabe F Genera Re0er"e0 2'1-)1(

Dm

Una$cated genera re0er"e0 at 1 A/r% 2'1- '71'

stimate Collection 5un surplus for %$/$. an %$./$' $4??,

stimate net refun of !evenue #upport *rant in %$'/$" toreflect that the top slice for New Homes Bonus funing in thenational grant settlement was overestimate 0y the *overnment

%4$,@

!elease funs from the Gaste P5I reserve instea of ta6ing arecurrent >%4$ m saving

$4"@%

ne off pay an pension provision within the %$./$' 0uget $4+%%

!elease all remaining reserves for e2ual pay an paymoernisation

$4+%%

T$ta Re0$urce0 7*H-

C$mm%tment0TB onth + forecast overspen incl4 share of NH# #,"services(

-%4+.+

5un part year effect of %$'/$" savings -%4?++

5un part year effect of aitional 95 savings -%4"%

#altean )io matche contri0ution -%4%%

GG$ !emem0rance -%4%%

!ug0y Gorl Cup -%4%%

Top up restructure an reunancy reserve for lia0ilities in%$'/$" an future years

-$4%%%

5uning set asie for the )ocal election in %$" -%4"%armar6 funing for Pension fun as set out in triennial review -%4'+

stimate one off funing for a new Business !ates system -%4$%%

#aance $, $ne6$,, re0$urce0 -7*

A$cat%$n0 ,$r 2'1()1*:

Implementation funing for Ault #ocial Care reforms -%4"%%

ne off ris6 provision -$4"%%

Aitional contri0ution to oernisation 5un %$'/$" -%4."%

Contri0ution to the oernisation 5un %$"/$@ -%4,%%

ICT short term resources for contract pressures -%4.%%

#aance $, re0er"e0 a"a%abe F #a0e /$0%t%$n '7-'



.4., The one off resources availa0le reflect the latest pro<ection of the Council=selement of the collection fun surplus4 The planne >%4$%%m recurrent savingrelating to the Gaste P5I reporte in the 3ecem0er Buget report has 0eenswitche to release one off resources from the Gaste P5I reserve instea4 The%$./$' TB position inclues an earmar6e >$4+m for potential pay relatematters an this is release to support the allocations7 principally the top up of

the restructure an reunancy reserve4 Provisions for any remaining lia0ility forsingle status an pay moernisation have 0een ientifie an the remainingreserves of >$4+m can now 0e release to support the 0uget4

.4.? The ta0le a0ove inclues the following commitments : -

• The month + forecast overspen of >%4+.+m will nee to 0e finance fromone off resources4

• The 0uget proposals inclue in appeni1 ' re2uire one off resources of>$4$'+m 0ecause the lea-in times7 primarily ue to consultation

re2uirements7 mean that not all the propose savings for %$'/$" can 0eelivere from $ April %$'4

• The #altean )io report to Policy an !esources Committee in 3ecem0er%$. committe a >%4%%m contri0ution towars the #altean CIC=sreevelopment pro<ect to match the contri0ution 0y )ewes 3C4

• An allocation of >%4%%m to support events to mar6 the start of GG$incluing an enhance Arme 5orces 3ay an !emem0rance 3ay4

• Policy & !esources committee on the +th Novem0er %$ approve acommitment of >%4m to support the !ug0y Gorl Cup %$" 0i4

• The restructure an reunancy reserve was use in %$./$' to support thevoluntary severance scheme 9##( an nees to 0e toppe up with >$4%mto support savings an service reesigns in %$'/$" an future years

• >%4"m set asie to fun costs of the local elections in %$"4 This reflectsthe e1pecte lower costs as it will occur at the same time as the *enerallection4

• #et asie >%4'+m for a one off contri0ution to the pension fun asrecommene in the triennial review4

• The Business !ates !etention forecast %$'/$" presente to Policy &!esources on the $@th January %$' highlighte the nee for a replacementBusiness !ates computer software system an >%4$m has 0een set asie tosupport its implementation4

.4.+ The allocation of the remaining resources for %$'/$" are propose for thefollowing reasons:

• The scale of the Ault #ocial Care reforms7 in particular to implement theCare Bill an the lac6 of certainty a0out the ae2uacy of funing to supportthose changes mean that one off resources have 0een set asie as part of

this 0uget setting process to support the changes4 This is e1plaine in moreetail in appeni1 "4



• A one of ris6 provision has 0een set asie to aress one off or short termris6s to the council=s 0uget not ientifie at 0uget setting time4

• The resources set asie so far for the oernisation 5un are fullycommitte in %$'/$"4 5urther e1pansion of the 9f programme will re2uireaitional one off investment in wor6force evelopment an training to

support the culture change aspects of the oernisation programme4 Inaition7 the refresh of the 95 programme an the longer term aim toeliver further vfm savings will re2uire planne investment in managing thisprogramme4 >%4,m has 0een set asie for %$"/$@ to provie certainty offuning an this funing coul 0e 0rought forwar epening on the timing of0usiness cases4

• Bugets for certain ICT contracts are currently insufficient4 These are 0eingformally reviewe with a view to consiering a ifferent sourcing moel4#hort term resources have 0een ientifie to 0rige the gap while thoseoptions are e1plore an the financing will nee to 0e revisite in %$"/$@4

E/end%ture E0t%mate0

Latet !oition in 201"/14

.4'% The onth + Targete Buget anagement TB( report elsewhere on theagena shows a pro<ecte overspen of >%4,".m on council controlle 0ugetsan an estimate >%4$?@m share of the pro<ecte overspen of NH# controlles," services4 The overall position is a significant improvement since month ,was presente to Policy & !esources Committee4 This is mainly riven 0yimprovements to the spening forecasts for Aults #ocial Care an

nvironment7 3evelopment & Housing irectorates4

2'1-)1( Adju0ted #a0e #udget

#nternal Tranfer and $t%er &d'utment

.4'$ Internal transfers relate to changes in responsi0ility 0etween services ancorporate 0ugets4 In %$./$' the main transfers consist of the change inaccounting for corporate insurance from a centrally hel 0uget to services anthe transfer from property rents within 5inance an !esources to financingcosts4 The latter is to reflect the use of the capital receipt from the American

1press isposal to offset the loss of rent4 Internal transfers also inclue therealignment of 0ugets to reflect the outcome of pay moernisation an thetransfer of the accelerate service reesign savings4

2'1()1* #udget

&nal(i of Budget C%ange bet)een 201"/14 and 2014/15

.4' The following ta0le shows how the 0uget has change since %$./$'4



Tabe : Ana.0%0 $, budget c9ange0 D m%%$n

Re"%0ed 2'1-)1( ba0e budget 22H71

Pay an Inflation .4@

!ecurrent ris6 provision $4%

ne off !is6 Provision $4"

Commitments & !einvestment -4"

3emographic an cost service pressures @4"

5ull year effect of %$./$' savings -$4

#avings pac6age %$'/$" 5ull year effect >$@4,m( -$"4@

Change in use of reserves .4+

Pr$/$0ed #a0e #udget 2'1()1* 22*7-

.4'. Appeni1 $ shows a etaile 0rea6own of the propose 0ugets an 0ugetchanges for each service4

*a( and general inflation aum!tion

.4'' The 0uget estimates for %$'/$" assume a $8 increase in employee costs an%4"8 increase in the contri0ution rate to the ast #usse1 pension scheme4 Theliving wage commitment an changes to the council=s overall pay framewor6have alreay 0een ta6en into account in the 0ase 0uget for %$'/$"4

.4'" The provision for general inflation ranges 0etween %8 an 8 epening on the

type of 0ugete e1peniture fees an charges are assume to increase 0y4"8 as escri0e in paragraph .4. with the e1ception of par6ing income anpenalty charge notices4 Increases in costs a0ove assume inflation level will 0emanage through services 0uget strategies unless the increase is significantan is ientifie as a corporate service pressure4

+i, *roviion included in t%e 2014/15 budget

.4'@ A >$4%m recurrent ris6 provision an >$4"m one off ris6 provision has 0een 0uiltinto the %$'/$" 0uget in recognition of the financial ris6s inclue within theoverall 0uget pac6age4 This is in line with the recommenations of the Chief

5inance fficer as set out in section @ of this report4

C$mm%tment0 and Re%n"e0tment

.4', 3etails of the commitments an reinvestment in services in aition to the oneoff allocations from reserves are shown 0elow

• >%4$%m reinvestment into a<or Pro<ects support to put 0uget on a moresustaina0le 0asis an release pressure on the capital programme

• >%4%m recurrent funing to support the *reater Brighton conomicPartnership

• >%4,m recurrently for the concessionary fares 0uget4



• >%4m to maintain the Council Ta1 !euction #cheme after the loss oftransitional funing4

.4'? These allocations are offset 0y a reuction in the pay moernisation provision of>%4".m as the scheme is now implemente aitional unringfence grants of>%4@?m for New Homes Bonus an an aitional >$4+%m over the %$./$'allocation of #.$ grants from government to compensate the loss of Business!ates income as a result of government announcements4

#nvetment in *reventative Service

.4'+ Investment in preventative services has again 0een protecte as far as possi0lerecognising that to withraw investment is li6ely to lea to greater meium anlonger term costs4 This inclues no reuctions in support for carers no changesto eligi0ility criteria across social care an carefully manage efficiency savingsacross other areas incluing #upporting People7 an Chilren=s an Aults#ocial Care via the 95 programmes(4 The investment in support for the#tronger 5amilies7 #tronger Communities initiative an efforts to more closely

align the su0stantial ring-fence Pu0lic Health 0uget with other preventativeservices will also support innovation4 Impacts of government grant reuctions7incluing reuctions in grants to the community & voluntary sector7 are7wherever possi0le7 manage through efficiency7 ientifying alternative provisionor re-commissioning services across partnerships an Pu0lic Health to ensureminimal impact on preventative wor64

.4"% There will also 0e su0stantial aitional investment through the implementationof the Better Care 5un which is focuse on greater integration of services withhealth7 reucing acute care costs an episoes7 an improving availa0ility of anaccess to services as etaile in appeni1 "4 #ervice pressure investment in

Chilren=s #ervices also inclues appro1imately >%4'%%m to continue support forarly Help strategies an initiatives which are proving to 0e effective an reuceoverall care pathway costs4

.4"$ ther aspects of the revenue 0uget strategy an capital investment programmealso support preventive strategies4 5or e1ample7 propose investments inhousing incluing 1tra Care Housing evelopment4 Consieration is also givento preventative impacts in fees an charges proposals7 for e1ample7 the freeingof Carelin6 charges to ensure no impact on the ta6e-up of this preventiveservice4

Service *reure

.4" The 0uget estimates for priority service pressures have 0een reviewe since3ecem0er an the propose allocations for emographic growth an otherservice pressures are >@4"%?m4 The funing to cover reuctions in unringfencegrants which has reuce from >%4"%%m to >%4'.m following theannouncement of the local government settlement an the funing forHomelessness has 0een amene to reflect the reuction in savings for thisarea4 The current trens on the council=s corporate critical 0ugets have 0eenta6en into account in etermining levels of service pressure funing4 Anaitional >$4%m funing has 0een allocate to Ault #ervices to reflect the

unerlying activity levels on the Community Care Buget4 The etaile



allocation of #ervice Pressures funing is set out in the *eneral 5un Buget#trategy at appeni1 .4

#udget Strateg%e0 and Sa"%ng0

.4". The %$'/$" gap was >4'?m when reporte to 3ecem0er Policy & !esources

an this has now 0een close4 A summary of the changes mae to the 0ugetproposals since 3ecem0er is given in appeni1 4 This means the overall fullyear savings re2uirement is >$@4,'m an the part year savings are >$"4@m4

.4"' The overarching Buget #trategy incluing 9alue for oney is inclue inappeni1 .43etails of the service Buget #trategies7 how they lin6 to thecorporate plan an savings proposals are inclue in appeni1 '4

Sta,,%ng Im/%cat%$n0

.4"" The staffing 0uget for %$'/$" inclues funing for a >,4@" living wage4 Anassumption of an increase of $8 in pay has 0een inclue an %4"8 on the cost

of pension contri0utions has 0een confirme from the outcome of the triennialreview of the ast #usse1 Pension 5un4

.4"@ At this stage in the 0uget process it is ifficult to etermine e1actly how manystaff may 0e affecte 0y the proposals4 A 0roa estimate is that in %$'/$" anestimate $%%-$"% posts may 0e remove from the council=s staffing structureas a result of the savings proposals set out in appeni1 "4 However actualnum0ers will 0e epenent on the etaile options propose an on the resultsof formal consultation where re2uire4 #ome of these are alreay vacant ansome will 0ecome vacant through normal turnover4 Base on previous years=e1perience this is li6ely to account for at least half of the posts lost4 As in

previous years it is planne to minimise the num0er of staff at ris6 of reunancythrough:

• Controlling recruitment an only ma6ing permanent appointments ine1ceptional circumstances an when all other alternatives have 0eene1hauste

• Holing vacancies where possi0le internally to increase the opportunitiesfor re-eployment

• inimise the use of interim7 consultant an agency appointments

.4", These measures will continue as we wor6 with traes unions an colleagues on

the etaile staffing implications4

.4"? A 9oluntary #everance #cheme will 0e accessi0le for staff in service areassu0<ect to planne savings from reesign 0ut there will not 0e an open schemeacross the wor6force4 This is 0ecause it is only a few months since an openscheme was offere an it is felt that a more targete approach to releasing staffin areas unergoing change is neee at this moment4 It is also propose toretain the previous enhance terms applie in the %$. 9oluntary #everancescheme for any voluntary severance progresse as part of these 0ugetproposals4



Annua M%n%mum Re"enue Pr$"%0%$n ;MRP< Statement and Prudent%aInd%cat$r0

.4"+ The council is re2uire 0y law to prepare an annual statement on the amount ofe0t that will 0e repai in the following year4 The statement for %$'/$" is set outin appeni1 $%4

.4@% The pruential capital finance system introuce in %%' re2uires the council toset a num0er of inicators for affora0ility7 pruence an sustaina0ility4 Therecommene inicators are set out in appeni1 $$4 em0ers shoul note theinicator for the authorise limit is a statutory limit re2uire to 0e etermine 0yfull Council uner section .$( of the )ocal *overnment Act %%.4

C$r/$rate #udget0

.4@$ The council 0uget contains a num0er of corporate 0ugets that are monitorean controlle centrally4 3etails of the main corporate 0ugets ; concessionaryfares7 insurance7 financing costs an contingency are set out in the followingsections4

Conceionar( Fare

.4@ The overall 0uget for reim0ursing local 0us operators for the cost of free travelfor pensioners an the isa0le is forecast to increase 0y '4@8 to >$%4@m ne1tyear4 The ma6es provision for the potential outcome of negotiations to e1tenthe fi1e eals with the main 0us operators that were ue to en on .$ arch%$'4 A report will 0e 0rought to this Committee for em0ers to consier thenew fi1e eals as soon as negotiations have 0een complete4 The mainreasons for the increase are: an inflation increase of 4+8 an an increase in

the overall num0er of trips reflecting the introuction of new routes to Crawley7 anew service in the spring from Brighton #tation an along the seafront anincrease usage of the services along the coast towars Gorthing anPortsmouth4

#nurance

.4@. The costs of insurance have now 0een recharge in full to service 0ugets sothe corporate 0uget reuces to ero4 The total amount recharge in %$'/$" of>.4$m represents a 4+8 reuction in costs over the previous year an covers0oth the cost of insurance premia an the net cost of meeting successful claims

against the council pai uring the year4 The council successfully retenere the0ul6 of its insurance cover in arch last year elivering the >%4.m anticipatesavings 0uilt into the 0uget for %$./$'4 A further reuction of >%4$m has 0een0uilt into the 0uget for ne1t year to reflect lower payments on claims 0ase oncurrent trens4

.4@' ver the meium an longer term there is a significant ris6 that claimse1perience across the country this year arising from severe weather will a tofuture premia costs4 In aition officers are aware that a num0er of councilshave face significant increases in pu0lic lia0ility premiums following areassessment of the way insurance companies are calculating ris64 The council



coul face an increase from $ Novem0er which woul nee to 0e covere fromthe overall ris6 provision in contingency4

Financing Cot

.4@" The financing costs 0uget reflects the cost of financing the council=s capital

investment plans4 The council has a fully fune capital programme in %$'/$"epening on the achievement of certain capital receipts an the costs offuning the programme are provie for in 0oth the general fun an housingrevenue account revenue 0ugets4

.4@@ The financing costs 0uget for %$'/$" is forecast to 0e >?4+m7 a ecrease of'48 on the a<uste 0ase for the current year4 This is ue to a >%4.m reuctionin anticipate general fun 0orrowing costs an >%4$m from higher investmentincome4 The reuction in 0orrowing costs reflects the fact that the council hasnot unerta6en any new 0orrowing in %$./$' an has instea use reserves tofinance the capital programme as the loss of investment interest is far less than

the saving achieve 0y not 0orrowing4 ver time the council will nee to 0orroweither when the reserves have 0een use or earlier when money mar6etconitions are right4 An estimate of these costs has 0een 0uilt into futurepro<ections however they shoul 0e more than offset 0y higher levels ofinvestment interest as pro<ecte short term interest rates rise4 The increase ininvestment income largely reflects 0etter than anticipate cash flows an amoest increase in investment performance4

Contingenc(

.4@, The council=s contingency 0uget inclues provision for costs which are li6ely to

occur 0ut for which the estimate cost cannot 0e ae2uately foreseen at thisstage7 for e1ample for pay4 It also inclues ris6 provisions an other resourcesawaiting transfer to services4 The propose contingency for %$'/$" is >'4.,mas etaile in ta0le ?4

Tabe H: C$nt%ngenc. D m%%$n

Corporate recurrent ris6 provision $4%%

Corporate one off ris6 provision $4"%

Pay provision for remaining pay moernisation changes %4$$

oernisation fun to support the 95 programme %$'/$" %4,%

Implementation funing for Ault #ocial Care reforms %4"%

ICT short term resources for contract pressures %4.%

Council ta1 reuction grant for Parish/*aren Committees %4%$

!esources to cover the impact of awaite governmentannouncements on grants

%4$"

#ervice Pressure funing for electricity an gas %4$%

T$ta C$nt%ngenc. (7-



C9ange %n u0e $, re0er"e0

.4@? The 0uget strategy for %$'/$" raws on reserves to provie one off ris6provisions temporary funing to cover the part year effect of the savingspac6age an investment in the elivery of savings for future years4

(7 COUCIL TA= A+ RE!ERE+UM

'4$ The minority *reen Aministration are proposing a council ta1 increase of '4,"8which will trigger a referenum4 3etaile proposals showing how the aitionalresources generate 0y the higher council ta1 will 0e use are given in appeni1$, which also inclues proposals for a su0stitute 0uget an estimates of theaitional one-off costs associate with the referenum4 A council ta1 increaseof '4,"8 results in a 0an 3 council ta1 of >$7.'?4$$ an increase of >@$4$$ onthis year4

'4 A threshol increase of $4+,8 in the council ta1 results in a 0an 3 council ta1for the city council element of the council ta1 of >$7.$4." an increase of >"4."

on this year which coul 0e su0<ect to change epening on the final guiancefrom C)* in relation to the treatment of levies4

'4. In orer to propose an overall council ta1 for the city the council ta1es of theprecepting authorities nee to 0e 6nown4 The Police an Crime Commissionerfor #usse1 is proposing a council ta1 increase of .4@8 with the 0an 3 councilta1 increasing to >$'.4' for %$'/$"7 or the ma1imum permissi0le unerCentral *overnment referenum principles7 whichever is lower4 ast #usse15ire Authority is ue to set their %$'/$" Ban 3 council ta1 on the $' 5e0ruary%$'4 The 0uget for !ottingean Parish will 0e agree shortly4

Su!!lementar( Budget re!ort to Budget Council

'4' Not all the 0uget an council ta1 information neee to set the 0uget ancouncil ta1 is availa0le at present therefore aitional information will 0e nee to0e provie for Buget Council4 This will inclue:-

• Any other grants that are announce 0efore Buget Council4

• The nvironment Agency levy figure agree for %$'/$" an any changesto the 0uget an council ta1 calculation resulting from the levy4

• The agree council ta1 set 0y #usse1 Police Authority7 ast #usse1 5ire

Authority an !ottingean Parish4

• The statutory council ta1 calculations re2uire uner the $++ )ocal*overnment 5inance Act4

• The full 0uget an council ta1 resolution for Buget Council4

• 5ee0ac6 from the 0usiness ratepayers meeting hel on $$ 5e0ruary4

*7 ME+IUM TERM !IACIAL STRATEGY A+ RIS> ASSESSMET

"4$ The eium Term 5inancial #trategy T5#( set out in appeni1 ? shows therevise resources an spening pro<ections for %$'/$" to %$+/%4 The



financial pro<ections show that proposals nee to 0e evelope to aress a0uget gap of nearly >+%m over the " year perio from %$"/$@ onwars4 Thesection after the pro<ections outlines how this might 0e achieve4

"4 All the pro<ections are 0ase on the 0est information currently availa0le anfurther wor6 has 0een unerta6en to refine the pro<ections an provie em0erswith graphs showing trens on 6ey inicators4 However7 in the current financialclimate an with national elections in %$" there are many uncertainties4 Theris6 assessment set out in appeni1 + e1plains in more etail the uncertaintiesfacing the 0uget4

7 REPORT O! T4E C4IE! !IACE ;SECTIO 1*1< O!!ICER U+ERSECTIO 2* O! T4E LOCAL GOERMET ACT 2''-

@4$ #ection " of the )ocal *overnment Act %%. re2uires the Chief 5inance#ection $"$( fficer of a local authority to report on the ro0ustness of theestimates inclue in the 0uget an the ae2uacy of the reserves for which the0uget provies4 This report has to 0e consiere 0y Policy & !esourcesCommittee an the full Council as part of the 0uget approval an council ta1setting process4 The 0uget reports on this agena are focuse on the *eneral5un !evenue Buget %$'/$" an the Capital Programme4 It also consiers6ey meium term issues face 0y the council4

+obutne of -timate

@4 There is inevita0ly an element of <ugement as 0uget estimates of speningan income are mae at a point in time an may change as circumstanceschange4 This statement a0out the ro0ustness of estimates cannot give a $%%8guarantee a0out the 0uget 0ut gives the council reasona0le assurance that the0uget has 0een 0ase on the 0est information an assumptions availa0le atthe time4

@4. In setting the 0uget for %$'/$"7 current e1peniture trens an serviceemans have 0een consiere 0y the 1ecutive )eaership Team anCorporate anagement Team4 The 0uget for %$'/$" has therefore 0een setta6ing into account the trens in the TB + report an further pro<ections offuture eman an cost4 Ghile Chilren=s #ervices are showing an unerspenin %$./$' an have 0een successful in achieving their 9alue for oney targetsthe corporate critical agency placements 0uget will nee close monitoring4 Thefocus on the arly Help #trategy shoul help ensure that this e1peniture showsongoing reuctions4 Ault #ocial Care is showing a significant overspen in%$./$' although that has reuce somewhat uring the course of the year7partly from one off rather than recurrent measures4 Fnachieve savings are a6ey contri0utor to that overspen an there remain challenges to elivery ofthose ne1t year4 The one off ris6 provision of >$4"m is inclue in the 0uget toprovie some short term cover against those unachieve savings if neee in%$'/$"4 #ervice pressure funing has 0een allocate in the 0uget to coverpro<ecte trens in eman incluing for e1ample )earning 3isa0ility transitions4The unerlying pressures on the Community Care 0uget 0ase on the TB +forecast mean that an aitional >$m recurrent service pressure funing has

0een ae to the Ault #ocial Care 0uget 0ringing the total to >4"m4 At thisstage no assumptions have 0een mae a0out the success of the Better Care



5un at reucing pressure on the Community Care Buget in aition to thealreay propose savings targets4

@4' The council has emonstrate its a0ility to continue to eliver very challengingsavings programmes4 The successful 95 programme has 0een 0ac6e 0ysu0stantial investment particularly in pro<ect management capacity to unerpinits elivery an ensure a particular focus on trac6ing casha0le savings4 5or thisreason there is aitional one off investment inclue in this 0uget pac6age forthe implementation of the ne1t phase of the 95 programme over the ne1t twoyears4 Githout this investment it is consiere that the planne level of 95savings will not 0e achieva0le4

@4" A recurrent ris6 provision of >$m is inclue in the 0uget to guar against anyris6s not 6nown at 0uget setting time incluing ris6s associate with thesuccessful implementation of the wie-ranging savings pac6age7 in particular theemaning new targets for Ault #ocial Care 95 programme4 In total this0rings the one off an recurrent ris6s provisions to >4"m7 compare with >$4"min %$./$'4

&de.uac( of +eerve

@4@ The recommenation on the pruent level of *eneral 5un wor6ing 0alance has0een 0ase on the ro0ustness of estimates information an a ris6 assessment ofthe 0uget4

@4, The analysis inicates a continuation of an unerlying pruent level of wor6ing0alance of >+m e1cluing school 0alances(4 This represents '4%8 of thecouncil=s net revenue 0uget e1cluing schools4 There is unou0tely greaterfinancial ris6 in the new 0usiness rates retention system than in the previous

funing moel7 particularly as a result of the appeals process4 However we areminful of the nee to 6eep reserves as low as possi0le an the value ofsuccessful appeals in %$./$' was lower than ha 0een e1perience in theprevious year4

@4? All specific reserves have 0een reviewe in etail to ensure that they are set atan appropriate level4 This is set out in appeni1 ,4 any of the council=searmar6e reserves fulfil a specific legal or financial re2uirement7 for e1amplethe Insurance !eserve4 A significant reuction in the Gaste P5I reserve has0een mae as a result of the finalisation of the sharing agreement for incomefrom electricity an commercial waste4

&urance Statement of t%e Council Section 151 $fficer

@4+ In relation to the %$'/$" general fun revenue 0uget the #ection $"$ officerhas e1amine the 0uget proposals an 0elieves that7 whilst the spening anservice elivery proposals are challenging7 they are nevertheless achieva0legiven political an management will to implement the changes7 goomanagement7 an the soun monitoring of performance an 0ugets4 Thecouncil also has a goo recor of managing other potential financial ris6s thatarise from time to time which provie assurance that it can proactively manageris6s such as e1ternal legal challenges7 capital cost variances an treasurymanagement ris6s4



@4$% In terms of the ae2uacy of reserves7 the #ection $"$ officer consiers awor6ing 0alance of >+m to 0e ae2uate ta6ing into account other reserves7 theris6 provisions an the council=s trac6 recor in 0uget management4

7 AALYSIS & COSI+ERATIO O! AY ALTERATIE OPTIOS

,4$ The 0uget process allows all parties to put forwar via0le alternative 0uget

an council ta1 proposals to Buget Council on , 5e0ruary %$'4 BugetCouncil has the opportunity to e0ate 0oth the proposals recommene 0yPolicy & !esources Committee at the same time as any via0le alternativeproposals4 All 0uget amenments must have 0een Dsigne offE 0y financeofficers no later than $ noon on onay 'th 5e0ruary %$'4

H7 COMMUITY EGAGEMET COSULTATIO A+ SCRUTIY

?4$ The results of the consultation an engagement processes are shown inappeni1 $"4 In aition further meetings were hel with the ler People=sCouncil7 Oouth Council7 Community Gor6s an the #chools 5orum4 Consultation

with the representatives of Business !atepayers must 0e 0ase on 0ugetproposals an is ta6ing place after pu0lication of this report an the fee0ac6 will0e inclue in the final report to Buget Council4

?4 In aition to formal consultations7 there have 0een a range of engagementevents esigne to facilitate unerstaning of the council=s overall 0ugetposition an o0tain general fee0ac6 on proposals4 These inclue:

• The #chools 5orum where a report on the potential areas of interest animpact of the *eneral 5un 0uget proposals were iscusse at ameeting on % January %$'4

• The ler People=s Council where a range of technical 2uestions a0outthe council=s funing position were e1plore an a secon meeting washel to e1plore Ault #ocial Care proposals in more epth4

• An event for Business !atepayers representatives on $$ 5e0ruary %$'will provie the opportunity to e1plain in more etail changes to Business!ates in %$'/$" following government announcements an how the0uget proposals an current initiatives continue to support economicactivity in the city4 This follows engagement earlier in the year with theconomic Partnership4

• Consultation an engagement with Community Gor6s in eveloping

proposals7 particularly in Chilren=s #ervices7 an through co-opterepresentation on the Buget #crutiny Panels4

• A cross-party rounta0le meeting with Traes Fnions4

• 3epartmental Consultative *roups 3C*s( which provie anopportunity for further consultation with Traes Fnions4

?4. The consultation an engagement activity influence the original 0ugetproposals pu0lishe in 3ecem0er for e1ample through applying no inflationaryincrease to par6ing charges an protecting as far as possi0le spen on thepu0lic realm4 There are clearly a range of views hel a0out appropriate councilta1 levels4 #ome of the changes propose in this report an summarise inappeni1 flow from further fee0ac6 since the proposals were pu0lishe



incluing consieration of the Buget #crutiny Panel=s recommenations4 Theseinclue:

• concerns a0out the scale of savings in Ault #ocial Care which have le tothe removal of the original proposal in relation to homecare7 a reuction inthe saving for the A0le & Gilling service su0siy an greater lea in times forthe savings on the )earning 3isa0ility Community Care 0uget4 The

proposals for a '4,"8 council ta1 set asie a significant proportion of theaitional resources to reuce the re2uire savings in Ault #ocial Care

• provision of sufficient funing to ena0le the homewor6 clu0s in li0raries toguarantee they can continue to the en of the current school year

• minor changes to savings in Chilren=s #ervices to ensure e2ual impact oncouncil an community & voluntary sector service provision

• the removal of a saving for homelessness prevention with a compensatingreuction in service pressure funing4

?4' The full response to the scrutiny report is shown in appeni1 $@4

57 COCLUSIO:

+4$ The council is uner a statutory uty to set its 0uget an council ta1 0efore $$arch each year4 The recommenations to Buget Council containe within thisreport together with the recommenations to follow in the supplementary reportto full Council7 shoul ena0le the council to meet its statutory uty4

1'7 !IACIAL & OT4ER IMPLICATIOS:

5inancial Implications:

$%4$ These are containe within the main 0oy of the report4

Finance Officer Consulted: Mark Ireland Date: 5 February 2014

)egal Implications:

$%4 Policy & !esources Committee is responsi0le for formulating 0uget proposalsfor aoption 0y the council4 Power to aopt the 0uget is veste in 5ull Councilalone4

$%4. 5or these purposes7 the D0ugetE inclues the allocation of financial resources toifferent services an pro<ects7 propose contingency funs7 an setting thecouncil ta14

$%4' The provisions re2uiring local authorities to conuct referenums over thesetting of e1cessive Council Ta1 were introuce through amenments mae 0ythe )ocalism Act %$$ to the )ocal *overnment 5inance Act $++4 Theseprovisions replace powers previously hel 0y the #ecretary of #tate to set limitsfor Council Ta14 #ection "B of the )ocal *overnment 5inance Act $++re2uires a 0illing authority to etermine whether its relevant 0asic amount of

council ta1 is e1cessive4 If the amount is e1cessive7 the 0illing authority is



re2uire to hol a referenum7 with a view to applying an alternative amount ifthe e1cessive amount is re<ecte in a referenum4

$%4" The etermination of whether a relevant 0asic amount of council ta1 is e1cessivemust 0e mae in accorance with principles etermine 0y the #ecretary of#tate an approve 0y resolution of the House of Commons4 The 3epartment

for Communities an )ocal *overnment C)*( has alreay mae it 6nown thatfor the %$'/$" financial year it is e1pecte that an increase of more than 8 will0e regare as e1cessive4 Therefore7 local authorities opting for an increase ofmore than 8 will 0e e1pecte to hol a referenum4 However7 they still nee toma6e the re2uire etermination once the principles have 0een approve 0y theHouse of Commons4

$%4@ Fsually any authority which oes nee to hol a referenum must o this 0y nolater than the first Thursay in ay4 The #ecretary of #tate is a0le to specify aifferent ate as the latest ate for a referenum7 an in %$' the latest ate is ay4 This is also the ate of the uropean elections4 It is possi0le for an

authority to hol a referenum earlier than that7 0ut it woul nee to wor6 out atimeta0le that allows it to ma6e the re2uire etermination an comply with thenotice re2uirements4 If an authority that is re2uire to hol a referenum oesnot o so when it is re2uire7 the authority=s su0stitute calculations will come intoeffect4

$%4, The )ocal Authorities Conuct of !eferenums( Council Ta1 Increases(nglan( !egulations %$ impose various re2uirements as to the conuct ofthe referenum7 incluing the woring of the 2uestion to 0e put to eligi0le voters4

Lawyer Consulted: Olier Di!on Date: 4 February 2014

2ualities Implications:

$%4? The process for assessing the e2ualities implications of the 0uget changes for%$'/$" an an assessment of the cumulative impact is shown in appeni1 $4 All the 2ualities Impact Assessments are inclue at appeni1 $.4

#ustaina0ility Implications:

$%4+ A car0on 0uget has 0een set for %$'/$"4 This shows the level of spen onenergy an the estimate car0on emissions across each car0on 0uget areaan inclues a planne '8 reuction in %$./$' an again in %$'/$"4 Thismoest target will 0e challenging to meet on the 0asis of the current approach tocar0on management4

$%4$% Car0on 0ugets provie the organisation with a framewor6 of accounta0ility forreucing car0on emissions from our 0uilings7 street lights an fleet4 They werefirst introuce in %$/$. an supporte 0y actions plans that set out howcar0on 0ugets are to 0e achieve an these plans are reviewe anchallenge once a year4 The council spens aroun >,4"m each year heatingan lighting its 0uilings7 lighting our neigh0ourhoos an travelling aroun the

city to eliver 6ey services4 Gith rising energy an fuel prices an the purchase



of annual Car0on !euction Commitment allowances7 the 0usiness case forreucing car0on emissions is clear4

$%4$$ To ma6e significant savings in car0on emissions a ifferent approach is re2uirean the ne Planet ero Car0on approach provies a fresh focus to car0onmanagement4 nergy efficiency scoping wor6 is unerway for a set of 6ey

corporate 0uilings to help ientify a programme of investment4 Plannemaintenance programmes for corporate an school 0uilings each year aress6ey energy saving initiatives incluing oil to gas conversions an improvementsto insulation4 Housing=s rolling investment programme for communal lighting anlifts continues to improve the overall efficiency of 0uilings4 In aition there will0e long term investment in more energy efficient street lighting fune from)ocal Transport Plan resources4 There will 0e a clear focus place on reucingcar0on emissions from 0uilings through the Gor6styles phase . programmesreucing 0oth the total num0er of 0uilings occupie 0y the council an alsoensuring improve energy efficiency in the retaine 0uilings4

$%4$ The Council=s %$/$. Car0on !euction Commitment footprint accounte for.7'" tonnes of C from council 0uilings for which the council purchase>%4?$m worth of C!C allowances at >$ per tonne4 This was ," tonnes lessthan in %$$/$4 5rom %$'/$" allowances will rise to >$@ per tonne4

$%4$. Non half-hourly electricity prices increase 0y $"8 at the 0eginning of April%$.7 half-hourly electricity an gas prices increase 0y $%8 an ,87respectively7 in cto0er %$.4

$%4$' The Council=s car0on 0uget ata upate is etaile in appeni1 $' an profiles

the spen an C

car0on footprint for %$/$. across the council an sets outthe targets for %$./$' an %$'/$"4



SUPPORTIG +OCUMETATIO

A//end%ce0:

$4 ovements in Bloc6 Allocations %$./$' to %$'/$"

4 Changes in the 0uget pro<ections since the " 3ecem0er %$. 0uget report toPolicy & !esources Committee

.4 *eneral 5un Buget #trategy

'4 Buget #trategy for each main 0uget area an etaile savings proposals%$'/$"

"4 Ault #ocial Care !eforms an Better Care 5un

@4 #ummary of special an specific grant allocations for %$./$'7 %$'/$" an

%$"/$@

,4 !eview of the Council=s reserves incluing the planne use of reserves

?4 #ummary of the eium Term 5inancial #trategy %$'/$" to %$+/%

+4 Assessment of !is6s

$%4 inimum !evenue Provisions statements

$$4 Pruential Inicators %$./$' to %$"/$@

$4 2ualities Impact Assessment ; Cumulative impact

$.4 2ualities Impact Assessment ; Iniviual

$'4 Car0on Buget for %$'/$"

$"4 #ummary report Buget Consultation

$@4 inutes of the verview an #crutiny Committee an the recommene

response

$,4 !eferenum Buget

+$cument0 %n Member0 R$$m0

$4 None

#acgr$und +$cument0

$4 Buget files hel within 5inancial #ervices an #trategic 5inance4

4 Consultation papers

brighton and hove city council budget papers

Documents