Budget consultation 2012-13

Budget Webchat
 

The council is in the process of setting its budget for 2012-13 to 2014-15. The council reviews its budget each year. Like last year the council is looking to plan its finances over a three year period. We would really like to have your views on the budget to help us make better decisions about how we spend your money on the services we deliver for you. The budget consultation sets out some key issues to think about and invites you to participate in feeding your views back to the council.

If you would like to hear the council leader explaining the importance of the budget and budget consultation exercise click here to see and listen to a short video.

The council has already made a number of savings and this year the savings we propose are largely efficiency based and will not change the way front line services are delivered. This demonstrates how hard we are working to make the council a more cost-effective organisation, protecting front line services by making sure we're as efficient as we can be.

Only a few of the proposed savings require policy decisions to be made. We'd like to know what you think about these options and your views on the rest of the budget.

Our consultation process has been designed to provide you with as much information about the budget as possible and to give you the opportunity to share your thoughts on the general budget proposals as well as specific service related items.

Our budget in context

The challenging financial outlook facing the council is not unique to Argyll and Bute. Across the country organisations and individuals are having to review, plan and reprioritise how much money they have to spend, what to spend it on and how best to spend it. The council faces these same challenges.

Funding for public services is being constrained throughout the world so this is not simply an issue facing Scotland or the UK. The overall draft Scottish Budget was presented to the Scottish Parliament on 21 September 2011. This sees the total budget rise by only 5% over the period to 2014-15. By 2014-15 the budget will still be less than it was on 2010-11. The table below sets out the total managed expenditure limits the Scottish Government is working within.

The Scottish Government also set out its plans for local government expenditure levels as part of its draft budget. The proposed increase is 2% between 2011-12 and 2014-15. The table below lays out the total managed expenditure limits the Scottish Government has set out for local government.

The budget challenge

There are other challenges too. The make up of our population is changing with a significant increase in the number of older people forecast. The wider economic health of Argyll and Bute is also important factor influencing the demand, design and delivery of public services. There are changes to legislation and responsibilities for climate change to be addressed. These are significant challenges that become even more demanding in a diverse area like Argyll and Bute.

Why is the budget important?

 A budget sets out the plans for the council but expressed in monetary terms. A budget isn’t prepared in isolation but it sets out the costs associated with the councils plans to deliver services. The council’s planning is driven by its corporate plan. The corporate plan sets out the corporate objectives and outcomes it is seeking to achieve. The council aligns service delivery and budget to meet these. How the council spends its budget should be based on the corporate vision of Realising Our Potential Together. The corporate plan sets out number of corporate outcomes grouped under four corporate objectives of :

• Working together to improve the potential of our people
• Working together to improve the potential of our communities
• Working together to improve the potential of our area
• Working together to improve the potential of our organisation

The corporate plan is a key element of the council’s budget approach. If you would like to read more about the corporate plan click here .

The council budget is your budget. It sets out how your taxes are to be spent and services delivered for you or on your behalf. The council is actively encouraging local communities to get involved. Funding for public services is under ever increasing pressure. If we can’t provide a service in the way that customers would like it to be delivered we will always explain clearly why not so we are fully accountable for our decisions.  The budget consultation exercise is an opportunity for you to contribute to that decision making process and help us to make better decisions.

What you say has an impact

Last year we received lots of information as part of the budget consultation exercise that helped us gain a fuller understanding of what is important to our citizens and communities. You told us to spend more money on roads, education and social care.  These views affected the budget and additional capital funding was allocated for roads allowing a capital investment of £15m over the three years 2011-12 to 2013-14 and we protected education and adult social care with the lowest levels of savings .

It is vital we get your input again. There are a wide range of opportunities for you to contribute to the budget consultation.

• You can complete the budget survey
• You can use the budget simulator to set your own budget - click here.
• You can also email us at budget@argyll-bute.gov.uk

There is a programme of budget consultation sessions at specific meetings. The programme of meetings is noted below. You can see the agenda for details of time and venue one week before each meeting – check the council website here.

In addition to the above we will also arranging live web chats with the Council Leader and other senior councillors. Details will be published here.

The consultation will run until 28 November 2011.

Our financial record

The council has a good track record of managing its finances. For a number of years now we have been able to keep actual costs within budget. We have also managed to maintain a free General Fund Balance equal to our contingency target of 1.5% of our budget. You can see our annual accounts by clicking here.

We also have a track record of more than meeting the annual target for efficiency savings. The council achieved cashable efficiency savings in 2010-11 of £5.588m compared to a target of £3.791m. The efficiency savings were achieved through the service reviews, vacancy savings or absorbing cost increases due to inflation within the budget. Click here if you want to read our annual efficiency statement for 2010-11.

Why do we need to make more savings?

In February 2011 the council agreed a balanced budget for the period 2011-12 to 2013-14. The agreed budget needed some general fund reserve to be used in 2011-12. This was calculated to be repaid by 2013-14. Planned expenditure over the three years was equal to the income over the same period and we had a financially sustainable budget - ongoing annual expenditure did not exceed estimated funding. 

Much of the savings came from our service review programme which is looking radically at which services we deliver, how they are delivered and who delivers them. This will see all services reviewed over a three year period.  We want to achieve savings from efficiencies as a result of management and operational decisions rather than reductions in services wherever possible. The Scottish Budget announcement on 21 September covered the period to 2014-15. We will need to update our three year budget to cover the period to 2014-15. We won’t know exactly how much funding we will receive until December but we now need to start considering how we address what will be another challenging budget round.

We’re making progress

The council is making good progress against its corporate outcomes and service outcomes.  Performance is reported quarterly to the Executive Committee through the council and departmental scorecards. Performance levels are generally being maintained or improving and there are some examples of very significant improvements in performance – the council is one of the leading performers in relation to delayed discharges from hospital.

The shared risk assessment completed by a joint panel of audit and inspection agencies recognised the improvements being made by the council and the reduction in audit and inspection risk.  The council is now regarded as a low risk.

While good progress is being made we do need to do more. The council is committed to being an improving and efficient organisation. Delivering value for money is a high priority and we recognise that we need to be creative, innovative and resourceful in working with others to deliver high quality services that are cost effective.

We need to do this to address increasing demands for services and changes in population etc. We will seek to do this through more efficient working where possible but there will be a requirement to change and reduce the services we deliver and how we deliver them. The redesign of services is challenging and can be concerning for service users and this is why it’s important you let us have your views through the budget consultation.

Where does the council get its funding from?

The council receives its funding from three main sources – Scottish Government, council tax and reserves. It now receives around 85% of its funding from the Scottish Government.  The table below shows the levels of funding for the council since 2008-09. It excludes funding from reserves and looks only at external sources of income - council tax and Scottish Government funding. Although funding increased up to 2010-11 it fell back in 2011-12 and the 2011-12 level of funding was only 2.6% higher than that in 2008-09.

The executive considered a report on 29 September detailing the initial budget forecasts for the period to 2014-15. This allowed for inflation, cost and demand pressures and the estimated level of funding. The report also highlighted a range of risks and uncertainties and these will become clearer over the next few months. Although the main estimate was a funding gap after the service review savings of £4.6m for the period to 2014-15 the report stated that a realistic range for the financial outlook was between a surplus of £3m and a gap of £12m.

Revenue budget

The revenue budget is the money the council spends on day to day service delivery,rather than one off capital investments. It covers the cost of paying staff and contractors who deliver services, the running costs of premises, materials, supplies and services, grant payments to outside bodies and interest and repayment costs for amounts borrowed to fund capital investment.

The table below gives a breakdown of the 2011-12 revenue budget over different cost types. As you can see the biggest cost are for employee costs and the cost of payments to outside bodies eg contractors.

The table below gives a breakdown of the revenue budget over each service for 2011-12.

Service reviews

The council previously agreed to carry out a three year programme of service reviews. This is the final year of the reviews. A target of identifying savings options of at least 20% of budget has been set for the service reviews this year (previous reviews had a target of 15%). The service reviews set out to identify more efficient and more effective ways of delivering the service and where necessary prioritising the service to protect key areas in achieving the 20% budget reduction. A comprehensive process of base lining and benchmarking performance and identifying future challenges is carried out and options are identified and evaluated before the preferred options are put forward as the recommended savings options.

You can read the executive summaries of these reviews here.

These service are under review. You can read a summary of each review on its own page:

• Housing - this includes housing support, homelessness and housing strategy
• Adult Care - including care and support for older people, adults with mental illness or physical disability
• Property - including building management and maintenance
• Planning - including planning applications and  building warrants
• Streetscene - including grounds maintenance, litter, street sweeping and grass cutting
• Roads Design - including management of roads, bridges, harbours and sea walls
• Roads network and environmental - including maintenance of roads, bridges, harbours and sea walls
• Fleet - including management and maintenance of council vehicles over 3.5 tonnes
• Support services - including strategic finance, IT and HR and improvement.
• Marine services - including piers and harbours and the operation of lifeline ferry services to some islands.

The summaries highlight the key issues for each service review showing the savings which we will implement, as they are management/operational matters. Those which the executive has agreed are policy changes require public consultation. It is these later set of savings proposals that we would like your views on.

Significant savings were agreed as part of the service reviews undertaken last year. The services reviewed and level of savings are noted in the table below.

Have your say

It’s really important for us to hear your views on the budget proposals. You can do this in a number of ways:

• To develop your own budget for the council using the budget simulator click here
• Email us at budget@argyll-bute.gov.uk
• Come to a  budget consultation meeting (click here for details)
• Take part in a live web chats.

The consultation will close on 28 November 2011.