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Matter which the Chairman has decided is urgent to ensure Members have the views of Scrutiny Committee in a timely manner

 

Agenda Item No.

 

THE VALE OF GLAMORGAN COUNCIL

 

CABINET: 17TH DECEMBER, 2012

 

REFERENCE FROM SCRUTINY COMMITTEE (CORPORATE RESOURCES): 11TH DECEMBER, 2012

 

“           INITIAL REVENUE BUDGET PROPOSALS 2013/14 (MD) –

 

Members were notified of the revised budget for 2012/13 and received the initial revenue budget proposals for 2013/14 as part of the consultation process.  It was noted that the Standard Spending Assessment (SSA) represented the Welsh Government’s (WG) view of the relative resources needed to provide a standard level of service in each local authority in Wales and its primary use was to allocate Rate Support Grant (RSG) to those authorities.  The Council had been notified that its provision SSA for 2012/13 was £218.838m.  The Council’s provision RSG was £125.934m. and its share of Non-Domestic Rates (NDR) was £37.752m. which, together, constituted the Council’s provisional Aggregate External Finance (AEF).  The Council would also receive a sum provisionally set at £1.246m. through the Outcome Agreement Grant (OAG) for 2013/14.  Transfers in the RSG settlement were shown in paragraph 7 of the report.  Attention was drawn to the new responsibility being transferred to the Council, namely Council Tax Support £7.514m. which would be contained within the RSG. 

 

Appendix 1 to the report set out the necessary adjustments to the original estimate for 2012/13 which were required to be made. 

 

The following table compared the amended original budget with the projected outturn:

 

 

2012/13

2012/13

Variance

 

Amended

Original

Projected

(+)Favourable

Directorate/Service

Budget

Outturn

 (-) Adverse

 

£’000

£’000

     £’000

Learning and Skills

 

 

 

Education and Schools

90,967

90,967

                     0

Libraries

2,567

2,567

                     0

Lifelong Learning 

195

195

                     0

Youth Service

1,137

1,137

                     0

Catering

1,015

1,015

                     0


 

 

 

 

                          

Social Services

 

 

 

Children and Young People

13,966

13,966

                     0

Adult Services

33,573

33,573

                     0

Business Management and Innovation

293

293

                     0

Youth Offending Service

652

652

                     0

 

 

 

 

Visible Services and Housing

 

 

 

Environment and Visible Services                  

17,645

17,662

                   17

Parks and Grounds Maintenance

3,284

3,267

                 (17)

Building Services

0

0

                     0

General Fund Housing

           1,020

         1,020

                     0

 

 

 

 

Development

 

 

 

Public Protection

2,416

2,416

                     0

Private Sector Housing

1,520

1,520

                     0

Planning and Transportation

           5,044

         4,985

                 (59)

Leisure

           4,932

         5,100

                 168

Economic Development

856

892

36

 

 

 

 

Managing Director

 

 

 

Resources

             119

            119

                     0

Corporate and Customer Services

338

338

                     0

General Policy

22,017

21,767

               (250)              

Total

203,556

203,451

(105)

Met from General Reserve

(500)

(500)

          0

Grand Total

203,056

202,951

(105)

 

Further details relating to the above were contained within paragraphs 9 to 46 of the report. 

 

A summary of the overall base budget for 2013/14 was attached as Appendix 2 to the report.  The base budget had been arrived at by adjusting the 2012/13 budget for items such as inflation and unavoidable growth.  The Final revenue Budget proposals for 2012/13 included corporate savings targets for services to 2014/15 of £6.125m., further details of which were shown at Appendix 3 to the report.  Appendix 4 to the report showed a list of 2013/14 cost pressures as identified by Services.  It was noted that altogether those totalled £9.442m.  Those pressures excluded the cost of redundancies which it was suggested could be significant.  Also of significance were the implications of the Welfare Reform Agenda, further details pertaining to which were contained within paragraphs 61 to 70 of the report. 

 

Attention then turned to the Budget Review, the purpose of which was to ensure that a sustainable budget was achieved within predicted funding levels, that the budget was aligned to the Council’s priorities as set out in the Corporate Plan and that best value for money was being obtained.  The results of the Budget Review process would form the 2013/14 budget process and the outcome of the Review would be to put in place a four year financial strategy up to March 2017.  The 2013/14 Review was supported by cost Centre Analyses (CCAs) which provided details for each service area and was shown at Appendix 5 to the report.  Each cost centre had been awarded rating that measured its relative risk and corporate priority, details of which were shown in Appendix 6 to the report. 

 

The shortfall in the 2013/14 budget was £8.426m. assuming all cost pressures were met.  Future resource requirements had also been assessed having regard to the likely future revenue settlements and cost pressure information provided by services to 2016/17 as shown below:

 

Matching Predicted Resources to Expenditure

2014/15

£000

2015/16

£000

2016/17

£000

Total

£000

Real Term decrease in resources

   702

1,934

1,963

  4,599

Cost Pressures

6,173

4,644

4,272

15,089

Existing Corporate Savings Targets

(2,133)

       0

       0

(2,133)

Shortfall

4,742

6,578

6,235

17,555

 

The initial projects showed a cumulative shortfall of some £25.981m. by 2016/17 including the shortfall on 2013/14.  In view of the difficulty in predicting future levels of inflation and cost pressures, the above table needed to be treated with a degree of caution and the eventual position may be better or worse than stated.

 

The Review would further develop the above projections and would also examine the cost pressures to determine which would require funding. 

 

As a starting point to assist in dealing with the funding gap, the savings areas previously put forward by Directors to meet the 2013/14 and 2014/15 targets were being analysed with a view to their implementation with effect from April 2013. 

 

This would not be sufficient and it was proposed to request Directors to formulate additional options for savings, additional income, etc. over the next four years. 

 

In order to provide some guidance to Directors, it was suggested that a target be set for each Director.  Initially, it was proposed that each Director should identify savings equivalent to their pro rata share of the shortfall based on their controllable expenditure.  Over the four year period, this approximated to an average annually recurring reduction of about 6.5%.  Schools had been excluded from the target and would be looked at during the review.  The target sums were as set out below and were in addition to existing targets:

 

Annual Saving Target

2013/14

£000

2014/15

£000

2015/16

£000

2016/17

£000

Total

£000

Learning and Skills

1,141

   642

   890

   844

  3,517

Social Services

3,571

2,010

2,788

2,643

11,012

Visible Services and Housing

1,166

   656

   912

   863

  3,597

Development

   662

   373

   517

   490

  2,042

Resources

1,617

   910

1,262

1,197

  4,986

Corporate and Communication Services

   269

   151

   209

   198

     827

Total

8,426

4,742

6,578

6,235

25,981

 

An update of the progress on the Budget Review would be reported to this Committee in January 2013.  Comments of the Scrutiny Committee would be considered by the BWG prior to preparation of the final budget proposals for initial consideration by Cabinet and Council in February / March 2013.

 

Committee were advised of the decisions of other Scrutiny Committees to the Initial Revenue Budget Proposals, namely:

 

Ø    Social Care and Health – 3rd December – the Committee asked that Corporate Resources be informed of its concern that substantial cuts of the nature proposed in Paragraph 37 of the report before it may negatively impact on the provision of services which indicated that annual savings target within Social Services (in addition to existing targets) would be as follows over the 4 year period:

 

2013/14    2014/15    2015/16     2016/17     Total

£000         £000         £000          £000           £000

3,571        2,010        2,788         2,643          11,012

 

Ø    Economy and Environment – 4th December – noted report but asked for a further report to Committee in February 2013 with details of the Directors’ proposals for savings.

Ø    Housing and Public Protection – 6th December – the Committee noted the budget proposals subject to the following cost pressures being prioritised and referred to Corporate Resources for consideration – welfare reform, housing / Council tax benefit; and general fund housing homelessness.

Ø    Lifelong Learning – 10th December – agreed report.

 

Committee were advised that the figure of £214m. as contained in Paragraph 64 of the report was a provisional figure.  A more up to date figure of £221m. had been more recently provided.  Furthermore, Paragraph 64 of the report referred to a figure of 15%.  It had recently been announced that the figure that would be used would be 10%. 

 

Having considered the content of the report, it was

 

RECOMMENDED –

 

(1)       T H A T the transfer in 2011/12 of £180k. from Policy to Leisure Services to cover the additional costs incurred by Leisure Centres and Dyffryn House and Gardens be noted.

 

(2)       T H A T the amended budget for 2012/13 as set out in Appendix 1 to the report be noted.

 

(3)       T H A T the comments of the other Scrutiny Committees on the Initial Revenue Budget Proposals be noted.

 

(4)       T H A T Cabinet be requested to consider if the efficiency savings could be applied to all parts of the Council.

 

Reasons for recommendations

 

(1)       To fund the increased costs in respect of the Leisure Centres and Dyffryn House and Gardens.

 

(2)       To incorporate changes to the budgets.

 

(3)       Having regard to the comments of the other Scrutiny Committees to the Initial Revenue Budget Proposals.

 

(4)          To share the burden of efficiency savings.”

 

 

 

 

 

 

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