Liberal Democrat Group Alternative Budget – Council 26 February 2015

The Cabinet recommendations before Council tonight are recommended to be amended for the following alternative budget proposal (as set out in this paper, page 1- 6):

2.2.1   a)    The allocation of revenue resources for 2015/16 as set out in Section B: Part 1 “The Revenue and Capital Budget Plan”. (Resource allocation and portfolio plans to be amended as per table 13 on page 2 and the detailed changes set out following the table).

2.2.1 d) The revised statutory determinations (references are to the Local Government Finance Act, 1992 as amended) as follows:

1. £625,953,587 being the aggregate gross expenditure, which the council estimates for the items set out in Section 31A(2) (a) to (f) of the Act.

 

1. £532,250,620 being the aggregate income which the council estimates for the items set out in Section 31A(3) (a) to (d) of the Act.

 

• £93,702,967 being the amount, by which the aggregate at (d) (I) above exceeds the aggregate at (d) (II), calculated by the council in accordance with Section 31A(4) of the Act, as its council tax requirement for the year.

There is no impact on other sections of the recommendations in 2.2.1 to 2.2.3. 

This alternative budget includes a new recommendation as follows:

2.2.4          An in year review of public health spend to be undertaken in 2015/16 to allow release of sufficient grant in 2016/17 to continue to fund activities included within savings proposals PH1, PH2, PH 5, and PH9.

 

Section B: Part 1 “The Revenue and Capital Budget Plan”.

Resource Allocation – Table 13 of Section B – Part 1  of the Budget Report 

Table 13 : Provisional Revenue Cash Limits by Portfolio
Portfolio	Proposed by Cabinet	Alternative Proposal	Proposed by Cabinet	Alternative Proposal
	2015/16	2015/16	2016/17	2016/17
Finance & Communications	4.83	4.83	4.56	4.56
Children’s Services	56.26	57.30	54.23	53.74
Community, Leisure & Culture	18.18	18.69	17.39	17.57
Environment & Transport	32.40	32.77	30.29	30.29
Health	0.00	0.00	0.00	0.00
Personnel & Business Support	3.44	3.44	2.03	2.08
Regeneration	7.18	7.18	6.72	6.72
Social Care	68.11	68.21	61.95	61.95
Net Portfolio Cash Limits	190.40	192.42	177.17	176.92
Capital Financing	0.73	0.73	0.48	0.48
Levies	12.92	12.92	12.92	12.92
Central budgets	(110.35)	(112.37)	(95.00)	(94.75)
Council Tax Requirement	93.70	93.70	95.57	95.57

*Central budgets include direct Government funding and business rates. Health balances to nil as it is funded via a direct grant.

Detailed Changes to Resources Allocation within individual Portfolio Plans:

Amendments to Existing Saving Proposals:

Saving Reference No.	Original Saving Description	Alternative Budget Proposal	2015/16 Cost / (Saving) £	2016/17 Cost / (Saving) £	Portfolio
22	Reduction in Children’s Centre to align service with need	Revised saving based on continuing with this proposal but retaining the Lighthouse and Fibbersley Park Children’s Centre’s	135,000	416,000	Children’s Services
30	Youth – Information, Advice and Guidance	To phase in this saving following a fundamental review of all Youth Services Activity with a reduced level of savings in 2015/16 and a higher level in 2016/17	902,000	(902,000)	Children’s Services
31	Targeted youth work
32	Targeted youth support
48	Area Partnerships – Removal of 4 support officer posts	Remove this saving proposal from the Budget	107,000	0	Community leisure and Culture
49	Area Partnerships – Removal of 4 support officer posts and 1 project officer post	Remove this saving proposal from the Budget	47,000	0	Community leisure and Culture
65	Library Closures	Remove this saving proposal from the Budget	288,819	181,000	Community leisure and Culture
67	Closure of Walsall Museum	Remove this saving proposal from the Budget	70,000	0	Community leisure and Culture
Saving Reference No.	Original Saving Description	Alternative Budget Proposal	2015/16 Cost / (Saving) £	2016/17 Cost / (Saving) £	Portfolio
79	Waste Collection Service (Garden) – operate for 6 months only between April and September (currently 8 months)	Remove this saving proposal from the Budget	140,000	0	Environment and Transport
82	Street Cleansing – reduction in 5 posts and removal of Walsall Town Centre Gold Standard	Remove this saving proposal from the Budget	226,747	0	Environment and Transport
107	Democratic Services – reduce the  number of scrutiny panels and the frequency of meetings	Remove this saving proposal from the Budget	0	50,000	Personnel and Business Support
151	Commissioning – removal of recruitability payments to sheltered employment users	Remove this saving proposal from the Budget	104,000	0	Social Care
PH1	Sexual health & contraception – prevention, testing and treatment	Continue to fund these services, but in a different way (using unallocated 2014/15 public health grant)	53,000	70,000	Health
PH2	Drug and Alcohol prevention and treatment services	Continue to fund these services, but in a different way (using unallocated 2014/15 public health grant)	390,141	70,000	Health
Saving Reference No.	Original Saving Description	Alternative Budget Proposal	2015/16 Cost / (Saving) £	2016/17 Cost / (Saving) £	Portfolio
PH5	Healthy weight / physical activity services	Continue to fund these services, but in a different way (using unallocated 2014/15 public health grant)	155,000	45,000	Health
PH9	Population Mental Health	Continue to fund these services, but in a different way (using unallocated 2014/15 public health grant)	133,000	0	Health
N/A	Reduce the cost of senior management by £1m over two years.	Reduce the cost of senior management by a further £1m over 2 yrs (£500k in 2015/16 and £500k in 2016/17), increasing the current savings proposal to a total of £1m in 2015/16 and £1m in 2016/17	(500,000)	(500,000)	This will be allocated once the detail of the savings has been worked through and consulted on.
N/A	Review of Employee Terms and Conditions – £1m saving in 2015/16	Review of Employee Terms and Conditions  – to reduce employee costs by a further £1.25m in 2015/16	(1,250,000)	0	This will be allocated once the detail of the savings has been worked through and consulted on.
Total Amendments to Existing Proposals			1,001,707	(570,000)

New Investment Proposal: 

Alternative Budget Investment Proposal	2015/16 Cost £	2016/17 Cost £	Portfolio
Transformation Fund	250,000	234,503	Subject to Business Case development

Summary of Total Changes to the Original Budget as Identified in Tables Above:

Alternative Budget  New Saving Proposal	2015/16 Cost / (Saving)	2016/17 Cost / (Saving)
Total Savings Amendments	1,001,707	(570,000)
Total New Investment	250,000	234,503
Total Net Changes	1,251,707	(335,497)

 

Net Changes Funded by:

 

Source of Funding	2015/16 Cost / (Saving)	2016/17 Cost / (Saving)
Use of Public Health Grant	(731,141)	(185,000)
(Use of) / Replenishment of General Reserves	(520,566)	520,497
Total Alterative Funding Sources	(1,251,707)	335,497

 

Chief Finance Officers Advice

This proposed alternative budget is confirmed to have been discussed with the Chief Finance Officer (CFO).

The alternative budget proposals as set out amend the statutory determinations but do not amend the council tax requirement or the level of council tax or bands from those proposed by Cabinet to Council.

The proposals include some removal of Cabinet’s savings proposals, some increases in savings proposals and some new investment as set out and summarised in the tables above.

Whilst the net effect of these changes is nil, the proposals include the use of alternative funding from one off sources as follows:

• Use of public health grant in 2015/16 and 2016/17.
• Use of general reserves in 2015/16 of £520,497 and replenishment in 2016/17.

Any use of one-off funding and use of general reserves should only ever be used on one-off items of expenditure.

In relation to the proposals in this amendment, I can advise as follows:

• There is currently £1.04m of 2014/15 public health grant which is unallocated. The alternative budget assumes use of £731,141 of this in 2015/16 to continue to fund savings options PH1, PH2, PH5 and PH 9 in that year, and £185,000 in 2016/17. As spend is ongoing, but funding is one-off, this could leave a potential shortfall in 2016/17 of £731,141 and £185,000 in 2017/18. The alternative budget includes a recommendation for an in year review of public health spend to allow sufficient release and reallocation of resources to fund PH1-9 on an ongoing basis.

 

•  The current estimated level of reserves as at 31 March 2015 is c£10.9m. The recommended level of reserves is £10.15m. After reviewing the budget risks, I can confirm that the release of the £520,566 reduces the authorities’ flexibility in meeting unknown financial pressures, however the quantum is such that all but the most unusual and serious combination of possible events can be met. The minimum opening balance required of the medium term financial strategy would not be compromised. In relation to 2016/17, the alternative budget provides for replenishment of £520,497 of general reserves increasing the amount available to the council.

Summary

The Council is required to set the budget for the forthcoming year, which is 2015/16. The alternative budget proposal as set out represents a balanced budget for 2015/16.

In relation to 2016/17, providing the public health review is completed, then from a financial perspective, the budget would be balanced.

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