THE BIRMINGHAM BUDGET 2013/14 AND TO 2017
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THE BIRMINGHAM BUDGET 2013/14 AND TO 2017 CONSULTATION AND DEBATE Peter Hay Strategic Director Adults and Communities. Our controllable budget. Where Government Grant Cuts Have Fallen. Reductions in Government Funding. Average for country £74 per person Birmingham’s :£149 per person

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THE BIRMINGHAM BUDGET 2013/14 AND TO 2017

CONSULTATION AND DEBATE

Peter Hay

Strategic Director Adults and Communities




Reductions in government funding
Reductions in Government Funding

  • Average for country £74 per person

  • Birmingham’s :£149 per person

  • If cut by national average :extra £79.2m each year


The challenge
The Challenge

  • Over a six-year period, from 2010/11 to 2016/17, the forecast total Government grant to Birmingham City Council will reduce by at least £310m.

  • At the same time, we will need to pay for unavoidable cost increases, due to the following:

    • Inflation

    • Changing need in the city’s population

    • Changes in legislation

    • Financing Costs


By 2016/17 the combined impact of rising costs and reducing grants mean that we need to make cuts of around £600m


Funding and pressures
Funding and Pressures grants mean that we need to make cuts of around £600m


Resources uncertainty
Resources Uncertainty grants mean that we need to make cuts of around £600m

  • Business Rates Retention Scheme - Apr 2013

  • Formula changes in setting baselines

  • Adjustments to Government overall funding levels

    • School related overheads £7m (currently assumed)

    • Early Intervention Grant – Nursery Places for 2 year olds £8.2m (not currently assumed)

    • Early Intervention Grant – General Top Slice £4.1m (not currently assumed)

  • Settlement - current rumours are it could be as late as 19th December


Council tax
Council Tax grants mean that we need to make cuts of around £600m

  • February 2012 LTFP assumed 1.9% (+£4.9m)

  • Currently assuming an increase within the previously proposed 1.64% referendum limit * (£0.7m less)

  • Council Tax Freeze Grant worth £2.6m for two years (£2.3m less than LTFP, and £4.9m less from 2015/16).

  • What should be the level of the Council Tax increase?

    Note: Government has withdrawn draft regulations, guidance on the calculation of the referendum limit % is not now expected until the Finance Settlement.


If we increased council tax

If We Increased Council Tax? grants mean that we need to make cuts of around £600m

Every 1% rise only raises in total £2.55m


Use of reserves

Use of reserves? grants mean that we need to make cuts of around £600m

Our reserves are modest for the size of the organisation, and are earmarked for specific purposes


Shared services and efficiency? grants mean that we need to make cuts of around £600m

Entire back office costs less than £100m


What have we done so far
What have we done so far? grants mean that we need to make cuts of around £600m

  • £275m of savings in the last 2 years

    • Reduced staff by 27%

    • Transformed and streamlined back office systems

    • No staff cost of living increases since 2010

  • Reached the point where efficiency savings are not enough

  • Entire back office costs less than £100m


What else are we going to do
What else are we going to do? grants mean that we need to make cuts of around £600m

Extending last year’s savings proposals

Setting out new proposals for this year

A thorough review of all Council services, which may end in some services being provided differently or stopped altogether


Service Categorisation grants mean that we need to make cuts of around £600m

Fit to outcomes

  • “Lite” review

  • Small efficiency target

  • Invest?

  • “In depth” review

  • Efficiency target

  • Invest?

  • Re - commission

  • Savings target

  • Statutory minimum?

  • Social enterprise?

Fit for purpose

  • Downsize service

  • Savings target

  • Statutory minimum?

De-commission

Or near-zero cost solution

De-commission

Or near-zero cost solution


Budget reduction proposals

Budget Reduction Proposals grants mean that we need to make cuts of around £600m

Supported by Service Factsheets


2013 14 savings schedule
2013/14 Savings Schedule grants mean that we need to make cuts of around £600m


Our Approach grants mean that we need to make cuts of around £600m

  • Immediate and pressing decisions for 2013/14, but …

  • …start planning and working now to deal with 2014/15 onwards

  • Key questions:

    • Are we doing the right things?

    • Are we doing them right?


Service reviews 2013 2017
SERVICE REVIEWS 2013 grants mean that we need to make cuts of around £600m→ 2017

We will be conducting a thorough review of Council services, and the contribution they make to local priorities and legal requirements.

This is likely to result in decisions to provide some services in new ways, and to de-commission some others

We will deliver savings from this process in order to address the medium-term challenge, and also to realise some benefits in 2013/14.

Total Budget Reduction expected from this process by 2017: £197.6m


Process and timeline
Process and Timeline grants mean that we need to make cuts of around £600m

  • Public Meetings and a disability forum

  • Separate consultation on specific proposals

  • Budget views on the website and on line survey – closes 6th January 2013

  • Budget and Council Plan 2013/14 reviewed by Cabinet, Monday 11 February 2013

  • Budget and Council Plan 2013/14 presented to City Council Tuesday 26 February 2013


Your views
Your views grants mean that we need to make cuts of around £600m

  • Strategic Implications

  • Commissioning and contracting

  • Long term public finance in Birmingham and what it means for you

  • Council will consider new approaches


Discussion

Discussion grants mean that we need to make cuts of around £600m


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