Special Executive Notice of Meeting Tuesday, 6th July, 2010 at 6.30 pm

Public Document Pack
Notice of Meeting
Special
Executive
Tuesday, 6th July, 2010 at 6.30 pm
in the Council Chamber, Council Offices,
Market Street, Newbury
Date of despatch of Agenda: Thursday, 1st July 2010
For further information about this Agenda, or to inspect any background documents
referred to in Part I reports, please contact Moira Fraser on 01635 519045
e-mail: mfraser@westberks.gov.uk
Further information and Minutes are also available on the Council’s website at
www.westberks.gov.uk
Agenda – Special Executive to be held on Tuesday, 6 July 2010 (continued)
Councillors Barbara Alexander, Pamela Bale, David Betts, Keith Chopping,
Hilary Cole, Graham Jones, Alan Law, Gordon Lundie, Joe Mooney and
Anthony Stansfeld
To:
Agenda
Part I
1.
Apologies for Absence
To receive apologies for inability to attend the meeting (if any).
2.
Declarations of Interest
To receive any Declarations of Interest from Members.
Page(s)
Items not timetabled in the Forward Plan
Reference
Page(s)
3.
1 - 14
Proposals for Addressing in year (2010/11) Reduction in
Various Government Grants
Purpose: To set out the details of the Government’s recent announcement to reduce,
in year, various revenue and capital grants; to review the implications; and to set out
proposals for addressing the resulting budget deficit.
4.
Exclusion of Press and Public
RECOMMENDATION: That members of the press and public be excluded from the
meeting during consideration of the following items as it is likely that there would be
disclosure of exempt information of the description contained in the paragraphs of
Schedule 12A of the Local Government Act 1972 specified in brackets in the heading
of each item. Rule 9.10.4 of the Constitution refers.
Part II
5.
Phased Redundancy Programme to meet Reductions in Various
Government Grants
(Paragraph 3 – information relating to financial/business affairs of particular person)
Purpose: In light of recent and anticipated reductions in Government
funding, to advise the Executive of the need to offset potential
redundancy (and where appropriate early retirement) costs by use of a
phased redundancy programme.
Andy Day
Head of Policy and Communication
15 - 38
Agenda – Special Executive to be held on Tuesday, 6 July 2010 (continued)
West Berkshire Council Plan Priorities and Themes
Council Plan Priorities:
CPP1 – Support our communities through the economic downturn – to alleviate the
impact on different communities and individuals who find themselves out of work and/or
disadvantaged
CPP2 – Raise levels of educational achievement – improving school performance levels
CPP3 – Reduce crime and the fear of crime
Council Plan Themes:
CPT1 - Better Roads And Transport
CPT2 - Thriving Town Centres
CPT3 - Affordable Housing
CPT4 - High Quality Planning
CPT5 - Cleaner and Greener
CPT6 - Vibrant Villages
CPT7 - Safer and Stronger Communities
CPT8 - A Healthier Life
CPT9 - Successful Schools and Learning
CPT10 - Promoting Independence
CPT11 - Protecting Vulnerable People
CPT12 - Including Everyone
CPO13 - Value for Money
CPO14 - Effective People
CPO15 - Putting Customers First
CPO16 - Excellent Performance Management
West Berkshire Council is committed to equality of opportunity. We will treat everyone with
respect, regardless of race, disability, gender, age, religion or sexual orientation.
If you require this information in a different format, such as audio tape, or in
another language, please ask an English speaker to contact Moira Fraser on
telephone (01635) 519045, who will be able to help.
This page is intentionally left blank
Agenda Item 3.
Title of Report:
Proposals for Addressing in year
(2010/11) Reductions in various
Government Grants
Report to be
considered by:
Executive
Date of Meeting:
06 July 2010
Forward Plan Ref:
n/a
Purpose of Report:
To set out the details of the Government’s recent
announcement to reduce, in year, various revenue and
capital grants; to review the implications; and to set
out proposals for addressing the resulting budget
deficit.
Recommended Action:
The Executive is asked to note that the Government
has announced reductions of just under £4m in the
Council’s revenue and capital grants with £1.4m of
this reduction having a direct effect in year. The
following actions are being recommended to address
this deficit;
1. that an external recruitment freeze be put in
place for the remainder of the financial year and
that each Directorate be given a target of finding
£200k in year as a contribution to the in year
deficit (total £800k);
2. that reductions totalling £662,386 to this year’s
ABG as set out in Tables 1 a – d in this report
are agreed;
3. that in light of the reduction in highway capital
grant that the Thatcham High Street
enhancement scheme be deferred until 2011/12
subject to the required capital funding being
available;
4. given the announced reduction in Reward Grant
that no further payments are made other than
existing liabilities pending a discussion with the
West Berkshire Partnership on the future use of
this Grant.
West Berkshire Council
Special Executive
Page 1
6th July 2010
Reason for decision to be
taken:
The Council needs to respond urgently to the
Government’s recent announcement that the Council has
lost, with immediate effect, nearly £4m of grant funding.
This generates a £1.4m budget deficit in year which must
be addressed urgently.
Other options considered:
In year budget reductions are inherently difficult to
manage. The only other option that could be considered in
addition to those proposed is to seek savings from the
general revenue budget. This will be done if the savings
outlined in this report cannot be realised.
Key background
documentation:
Portfolio Member Details
Name & Telephone No.:
E-mail Address:
Date Portfolio Member
agreed report:
Contact Officer Details
Name:
Job Title:
Tel. No.:
E-mail Address:
Councillor Keith Chopping - Tel (0118 983 2057)
kchopping@westberks.gov.uk
24th June 2010
Nick Carter
Chief Executive
01635 519101
ncarter@westberks.gov.uk
Implications
Policy:
The proposed reductions in Area Based Grant do not in
themselves create policy implications but Members need to be
aware that the proposed reduction in funding will inevitably have
an impact on performance.
Financial:
The financial implications associated with this report are set out
within the accompanying text however they can be summarised
as follows;
1. The Government has cut the level of grant funding it makes
available to the Council as follows;
• £1.1m reduction in Area Based Grant (ABG). This is an in
year reduction that creates an immediate budget pressure;
• Housing and Planning Delivery Grant (HPDG) has been
abolished in year. This would have created an in year
pressure of £841k (capital and revenue) however the
Council has a significant underspend provision in respect
of this grant and can therefore support existing
commitments until the end of the current financial year.
Beyond that point no funding provision exists although the
Government has indicated that HPDG will be replaced with
West Berkshire Council
Special Executive
Page 2
6th July 2010
another form of grant funding at some point;
• Local Area Agreement (LAA) Reward Grant will be
reduced. The Council was to receive £3.2m in Reward
Grant from LAA1. This has now been reduced to £1.6m;
• A £310k reduction in highway capital grant that has a
direct bearing on a number of Town Centre schemes in
Thatcham and Newbury.
In response to this announcement the following measures are
being proposed to address the immediate in year budget deficit;
•
Reduction of £662,386 in Area Based Grant (ABG)
•
An external recruitment freeze which it is anticipated will
deliver up to an additional £800,000.
This is above the requirement of £1.1m but is considered an
appropriate figure given the inherent risk in some of these
savings and the possibility of further in year grant reductions.
The estimated redundancy and early retirement costs are
covered within the Part II report set out on this agenda.
The implications for 2011/12 including the implications of the
abolition of HPDG will be considered as part of the preparation of
the new Medium Term Financial Strategy. It is anticipated that the
Executive will be updated on this over the coming 2 –3 months.
Personnel:
The proposed in year reductions in Area Based Grant will lead to
a reduction in a number of posts from which a small number of
redundancies are likely. The proposed external recruitment
freeze will also have obvious staffing implications in that a higher
level of vacancies will need to be maintained.
Legal/Procurement:
There are no legal or procurement issues associated with this
report.
Property:
There are no property implications associated with this report.
Risk Management:
The proposed savings outlined in this report bring with them a
number of risks, namely;
1. Some of the proposals will require agreement across
Berkshire since they are joint agreements with other
unitary authorities;
2. Some of the proposals involve reducing funding that is
tied to legal agreements. This may prove difficult to
achieve;
3. Whilst an external recruitment freeze should deliver
cashable savings in year, turnover is falling and if it
continues to do so then the ability to achieve savings in
this area will inevitably fall;
4. There will be service delivery risks particularly in areas
where staffing levels fall significantly. These will be
brought to the attention of the relevant Portfolio
Member.
West Berkshire Council
Special Executive
Page 3
6th July 2010
It is also important to point out that there is a risk of further in year
reductions in Government grant although this has not been
confirmed.
In an attempt to mitigate all these risks it has been decided that a
savings target of £1.5m is set which is beyond the £1.1m
required.
Equalities Impact
Assessment:
An Equalities Impact Assessment has been completed which
highlights the impact that the proposed service reductions will
have on young people and potentially some other vulnerable
groups. A copy of the assessment is available on request.
Is this item subject to call-in?
Yes:
No:
If not subject to call-in please put a cross in the appropriate box:
The item is due to be referred to Council for final approval
Delays in implementation could have serious financial implications for the Council
Delays in implementation could compromise the Council’s position
Considered or reviewed by Overview and Scrutiny Commission or associated
Task Groups within preceding six months
Item is Urgent Key Decision
West Berkshire Council
Special Executive
Page 4
6th July 2010
Executive Summary
1.
Introduction
1.1
On June 10th the Government announced that it was removing just under £4m of
grant funding to this Council. The purpose of this report is to detail the nature of
these grant reductions and to propose a number of measures to address the
resulting budget deficit.
2.
Proposals
2.1
The reduction of just under £4m in grant funding to this Council is made up of a
£1.1m in year reduction in Area Based Grant (ABG), the abolition of Housing and
Planning Delivery Grant (HPDG), which has a value of £841k to the Council, the
removal of £310k of highway capital grant and a reduction in the Council’s Local
Area Agreement Reward Grant valued at £1.6m. It is the ABG and capital grant
reductions that have an immediate in year impact. The abolition of HPDG does in
theory have an immediate in year effect however the Council is carrying
underspend within this budget that means that existing commitments can be
financed up until the end of the current financial year.
2.2
Two specific actions are proposed to address the in year revenue deficit created by
the £1.1m reduction in ABG;
(1)
Introducing an external recruitment freeze that is anticipated will deliver
in year savings in the region of £800,000.
(2)
Reductions of £662,386 in the Council’s ABG budget;
2.3
The suggested combined savings total outlined in para 2.2 exceeds the £1.1m
required but this reflects the fact that there are risks involved in delivering these
savings at such short notice. It is therefore seen as prudent to set a higher target in
an attempt to mitigate this risk.
3.
Conclusions
3.1
The recently announced reduction in Government funding requires the Council to
take immediate action to address the budget deficit that has resulted. Options are
limited and there are risks associated with those that have been chosen hence the
decision to identify savings of £1.5m is somewhat higher than the amount that is
required.
West Berkshire Council
Special Executive
Page 5
6th July 2010
Executive Report
1.
Introduction
1.1
The new Government announced on June 10th the details of £1.2bn worth of inyear grant reductions to local government. This detailed announcement followed a
more general statement on May 27th that the Government was intending to reduce
public sector funding by £6.2bn in year.
1.2
A total of just under £4m of anticipated Government funding for West Berkshire
Council has been cut leaving the Council with a potential in year budget deficit if
urgent action is not taken. In summary the breakdown of this reduction is as
follows;
(1)
a £1.1m in year reduction in Area Based Grant (ABG);
(2)
the immediate abolition of Housing and Planning Delivery Grant
(HPDG) which has an annual value of some £841k to the Council;
(3)
a reduction in Local Area Agreement (LAA) Reward Grant. The
Council was to receive £3.2m in reward for LAA1. £1.6m has already
been awarded but we will not now receive the remainder which was
due in the next financial year. It is assumed that Reward Grant for
LAA2 has also been abolished or reduced. There was the potential to
receive up to £900k from this source.
(4)
A reduction of £310k in capital grants relating to highways and road
safety.
1.3
In addition to the above the Government has also announced that grant in relation
to the Local Authority Business Growth Initiative (LABGI) will also cease. This has
no financial implications in year given that LABGI grant was not incorporated into
the 2010/11 budget since it was unclear how much would be received.
2.
The Grant Reductions
Area Based Grant (ABG)
2.1
ABG is made up of numerous funding streams from various Government
departments. The funding amounts are notional in that the individual funding
streams are not ringfenced and the Council can choose to deploy ABG where it
sees fit. In practice this Council’s funding is aligned closely to activities for which it
was allocated partly because some Government departments have in the past
expected it to be.
2.2
The current Government has moved to reduce further the level of ringfencing that
exists explicitly stating that Councils can chose to use ABG as they see fit.
2.3
In announcing the £1.1m reduction the Government notionally reduced the
following funding streams in year making it clear that the Council did not need to
reduce funding in line with these funding streams;
West Berkshire Council
Special Executive
Page 6
6th July 2010
(1)
£842k for Education;
(2)
£73k in relation to Road Safety;
(3)
£123k in relation to Supporting People administration, and
(4)
£16k in relation to Community Safety.
Housing and Planning Delivery Grant (HPDG)
2.4
Housing and Planning Delivery Grant has been made available to the Council for a
number of years and is used to support a range of planning related activities
including staffing. The Council currently has sufficient carried forward underspend
within the HPDG account to support planned activity this year but this will run out at
the end of the financial year leaving a deficit for 2011/12. There is an expectation
that HPDG will be replaced by another grant but the date for the implementation of
this is not known.
LAA Reward Grant
2.5
It was planned to allocate LAA Reward Grant to programmes supporting
Sustainable Community Strategy priorities through the West Berkshire Partnership
(WBP). The first half of the £3.2m grant has already been received however it is
now clear that the remaining £1.6m will not materialise. Some existing liabilities
have had to be accommodated using the grant that has already been received
leaving £700,000 yet to be allocated (approximately £200k revenue; £800k capital).
2.6
Given the Council’s current financial position it is recommended that the remaining
grant be retained by the Council pending discussions with the WBP regarding its
future use.
Capital Grant Funding
2.7
The reduction in capital grant funding will have a direct impact on the proposed
enhancement of Thatcham High Street in 2010/11 and the Oxford Road resurfacing
programme in Newbury both of which were to be funded from this source. It is
recommended that the Thatcham scheme is deferred to 2011/12 subject to capital
funds being available but that the Newbury works are completed in the current year
prior to the opening of Parkway.
3.
Proposed Response to the In Year Reduction in Government Grant
3.1
As stated earlier the main in year concern is the loss of ABG so efforts need to be
concentrated on addressing the £1.1m deficit that this creates. It is proposed that
two specific actions are taken;
(1)
Specific and immediate reductions in Area Based Grant;
(2)
Implementation of an external recruitment freeze to generate additional
in year savings.
West Berkshire Council
Special Executive
Page 7
6th July 2010
4.
Specific Reductions in Area Based Grant
4.1
It is proposed to remove £662,386 in year from within the Council’s ABG. Details of
these reductions and the resulting implications are shown by Council Directorate in
Tables 1a – 1d. A summary of the savings total for each Council Directorate is set
out below;
(1)
Children and Young People - £219,070
(2)
Community Services - £216,380
(3)
Environment - £166,936
(4)
Chief Executive - £60,000
Total - £662,386
4.2
The proposals set out above have been selected on the basis of their
alignment with Council priorities, whether the funding was in any event due to
end at the end of the financial year (as is the case with some education
grants), and the degree to which the proposal will deliver a cashable saving in
year. Members will note that the proposed savings differ from the notional
allocation highlighted in paragraph 2.3.
West Berkshire Council
Special Executive
Page 8
6th July 2010
Table 1a – Children and Young People (CYP)
2009/10
2010/11
2010-11 Service
proposed
in year
reduction
What this funds
Risk re
delivery of
saving
Implications
Page 9
School Development Grant
295,716
295,716
20,000 Education
Funds a variety of activities, including specific
help for SEN and other vulnerable groups,
together with support for schools causing
concern.
Reductions made in funding which has not yet been allocated
to schools; results in reduced support for subject areas in
schools (English, Maths etc) and reductions in study support.
Low
'Extended Schools Start-Up
Grants
741,608
304,980
30,000 Education
Funding allocated to schools to establish
additional learning opportunities, and support to
children, families and communities.
This grant was due to cease in 2011/12 when services in
schools will become self-sustaining; 0.3 fte vacant post will be
deleted, and remaining funds not passed to schools.
Low
Choice Advisers
19,812
19,812
10,000 Education
Low
Sustainable Travel - General
Duty
14,394
14,394
7,000 Education
Supports a service offering help to parents when Grant currently augments salaries. Staffing levels will need to
choosing a secondary school.
be reviewed.
This grant funds a part-time post to help promote Non renewal of contract.
the use of sustainable travel and transport in
schools.
1,273,993
1,390,903
Connexions
Connexions
Child Trust Fund
989
1,185
Teenage Pregnancy
94,000
94,000
Child Death Review
Processes
12,912
13,348
Designated Teacher Funding
12,033
12,033
January guarantee
Totals
14,885
2,465,457
West Berkshire Council
2,161,256
100,000 Youth Services £1,1m funds the contract with Berkshire
(minimum) &
Connexions Service to provide statutory careers
Commissioning and job advice and information to all young
people 14-19
Youth Services £242k funds the Intensive Connexions Service
working with the most vulnerable.
&
Commissioning
1,185 Children's
Contribution to costs of ensuring bank accounts
Services
for LACs (Looked After Children) are properly
maintained
22,000 Youth Services Funds Health Promotion activity plus services
&
designed to reduce the rate of teenage
Commissioning pregnancy.
6,000 Youth Services Funds statutory duty to review deaths of all
children across Berkshire.
&
Commissioning
8,000 Education
Funds training for staff in schools who act as
Designated Teachers for Looked After Children.
14,885 Children's
Services
New grant – ensures young people who are
NEET are given additional help in the January
after they leave school.
Low
Low
This will have a fundamental impact on the ability to provide
impartial advice and guidance to young people. Debate
needed with other Berkshire authorities as to level of reduction
to be achieved.
No reductions are planned to this service.
Low
This is now done electronically so money no longer needed.
Low
Support to a number of health promotion activities for young
people will cease; in future, there will be a greater reliance on
the NHS.
Reduced funding will limit training available.
Low
Low
Cease funding newsletter and Teacher Network meetings.
Low
Minimal impact – Intensive Connexions Advisers already
supporting.
Low
219,070
Special Executive
6th July 2010
Table 1b – Community Services (CS)
2009/10
276,055
285,955
Carers
385,518
413,281
30,000 Adult Social
Care
95,036
95,144
50,000 Adult Social
Care
244,282
255,023
25,000 Adult Social
Care
1,144,615
1,173,975
Mental Health
Page 10
Totals
123,192
2010-11 Service
proposed in
year
reduction
Supporting People
Administration
Familiarisation of new social
housing allocations
Adult Social Care Workforce
Local Involvement Networks
143,724
2010/11
1,380
West Berkshire Council
60,000 Housing &
Performance
1,380 Housing &
Performance
50,000 Housing &
Performance
What this funds
Implications
Risk re delivery
of saving
Administration of Supporting People Grant.
Burden of contracts management will now have to be absorbed
by adult social care contracts function
Low
Low
Training for all of West Berkshire's Adult Social
Training offer will be reduced
Services, Corporate and a limited number of
private companies
Services commissioned through voluntary sector Need to protect services to this important group. Saving is being
to give support to Carers (respite, advocacy, short taken from unallocated contingency monies.
breaks, to enable them to continue caring)
Contract with Help & Care to implement a LINK (a
Local Involvement Network) - aims to give citizens
a stronger voice in how their health and social
care services are delivered.
Supports delivery of adult mental health services
to achieve the National Service Framework targets
Low
Low
Shared contract with 4 other Berks U As. Need to check terms to Medium
enable early termination
Funds care management posts in Community Mental Health
Team.
Low
216,380
Special Executive
6th July 2010
Table 1c – Environment (Env)
2009/10
2010/11
2010-11 Service
proposed
in year
reduction
What this funds
Page 11
Environmental Damage
regulations (new)
Detrunking
311
319
186,944
191,617
91,617 Highways and Part of highways maintenance contract re A339
Transport
(previously A34) for which responsibility
transferred from the Highways Agency to the
Council
Road Safety Grant
286,038
275,301
75,000 Highways and Thames Valley Safer Roads Partnership
Transport
TOTALS
473,293
467,237
West Berkshire Council
Implications
319
Risk re delivery
of saving
Low
A339 Detrunking - a £92k, or 48%, reduction in grant
will result in some lowering of standards of highway
maintenance on the A339. Whilst there will be
sufficient funding to allow gritting, emergency
repairs and some basic maintenance to continue,
other works such as sign, road marking or barrier
repair/replacement will no longer be separately
funded and will be treated in line with the rest of the
road network.
A £73k, or 26% reduction in grant will result in a
reduction in road safety work carried out by the
Council and/or the Thames Valley Safer Roads
Partnership. However discussions are currently in
progress (at 29 June 2010) with the Partnership to
fully evaluate the effect of this cut.
Low
Medium
166,936
Special Executive
6th July 2010
Table 1d – Chief Executive (CEX)
2009/10
Community Call for Action /
O&S committee
1,833
Economic Assessment Duty
Totals
1,833
2010/11 2010-11
Service
proposed in
year
reduction
What this funds
2,000
2,000
Policy &
Communication
The management of 'Community Call for Action'
initiatives.
65,000
58,000
Policy &
Communication
Preparing, monitoring and refreshing a Local
Economic Assessment for the area.
67,000
Implication
Risk re
delivery of
saving
Whilst the Council has used this new power the level of grant is
Low
very small and the view has been taken that if further requests do
emerge these will be met within existing budgets.
The preparation of a Local Economic Assessment is a new duty Low
placed on all upper tier local authorities. £6,500k of the grant has
already been given to Reading BC to support a LEA for the
Reading Functional Economic Area part of which is within West
Berkshire. The remainder would have been used to commission
consultants to prepare an assessment for the rest of West
Berkshire. However, given the need to find cashable savings, it is
now proposed that this is prepared in house before the end of the
current financial year.
60,000
Page 12
West Berkshire Council
Special Executive
6th July 2010
5.
External Recruitment Freeze
5.1
The proposed in year reductions in ABG should generate over half of the required
savings however there are risks associated with delivery of some of these savings
proposals (e.g. the ability to vary contracted terms and conditions) and this has led
officers to recommend that savings proposals in excess of this target should be set.
Putting in place an immediate external recruitment freeze is seen as the most
effective way of delivering cashable savings in year and a notional £800k target has
been set for the remainder of the year (£200k per Directorate).
5.2
It is proposed that;
(1)
An immediate ban on external recruitment is put in place;
(2)
A list of exempt posts are identified and that requests to externally
appoint to these posts are considered by the Budget Monitoring Panel
(BuMP);
(3)
Should particular concerns arise regarding service delivery Corporate
Directors are able to submit requests to the Budget Monitoring Panel to
recruit externally;
(4)
All requests to recruit internally are brought to the Budget Monitoring
Panel for approval so that the Panel is able to take an overview of the
recruitment position;
(5)
Each Corporate Director sets out an approach regarding the use of
overtime, agency and casual staff and that this is approved by BUMP.
The above process would exclude school posts.
5.3
Should the recruitment freeze not deliver the required £800k saving then Corporate
Directors would need to look at reducing operational budgets in consultation with
Portfolio Members.
Appendices
None.
Consultees
Local Stakeholders:
TBC
Officers Consulted:
Staff affected directly by the proposals set out in this report have
been consulted
Trade Union:
The Trade Unions will have been consulted on the report by the
6th July.
West Berkshire Council
Special Executive
Page 13
6th July 2010