Agenda item

-        Presentation by Pete Hudson, Chief Finance Manager

Pete Hudson, Chief Finance Manager, gave the following powerpoint presentation:-

The Financial Challenge

-     The scale of financial challenges/risks facing local government was set to continue at least until 2017 (possibly a decade)

-     From 2013/14 there had been increased financial risk transferred to local councils through the Local Government Finance and Welfare Reform challenges and restrictions on finances e.g. Council Tax Referenda

-     Sustainable medium/long term financial planning was now even more critical

What this meant for Rotherham

-          2010/11               £5M (emergency budget)

-          2011/12               £30M

-          2012/13               £20M

-          2013/14               £20M

-          2014/15               £23M

-          2015/16               £23M (estimate)

Old Budget Principles

-     Previous budget principles served the Council well in the past, however, in the context of the Government’s Finance and Welfare Reform changes, a new approach was essential to meet future financial challenges:-

Support Services pared to a minimum

Staff  headcount reduced by over 1,000 and management posts reduced by 19%

Lean Council

No longer ‘salami slice’ services

New Budget Principles

The Council’s budget had been developed to:-

-     Focus on the things most important to local people

-     Help people to help themselves wherever possible

-     Provide early support to prevent needs becoming more serious

-     Shift scarce resources to areas of greatest need including targeting services and rationing services to a greater extent than at present

What this meant for Rotherham

-     Need to create an Investment Fund to focus on delivering Business Growth

-     Not doing everything, providing fewer services directly and supporting more people needing help through forging partnerships with other public sector stakeholders, communities, businesses and citizens to help them to do more for themselves

-     Using the limited and shrinking resources to tackle the biggest problems for the most needy, focussing on the 11 most deprived areas, accepting some would need to get less or less frequently

-     Achieving the best quality, safest, most reliable outcome via the most affordable service delivery method

-     Direct provision of service only where the Council was the cheapest/best quality solution to meet the critical needs of its citizens

Rotherham’s 2014/15 Budget Challenge

Initial Funding Gap in Medium Term Financial Strategy                      £19.1M

-     June Spending Round adjustments                                                     +1.0M

-     July Technical Consultation adjustments                                            £0.4M

Additional Pressures                                                                                    

-     New Government announcements                                                       +0.7M

(reduced Housing Benefit grant/reduced Education Support Grant)

-     Pensions Triennial Revaluation                                                                        +1.5M

-     Undelivered savings target 2013/14                                                      +0.3M

Revised Funding Gap                                                                                £23.0M

Meeting the Challenge:  Savings Proposals 2014/15

-     Directorate Savings Proposals                                                             £15.6M

-     Central Savings Proposals                                                                     £5.3M

-     Revisions to Planning Assumptions                                                     £2.1M

-     Total                                                                                                           £23.0M

It was noted that the budget proposals were to be considered by Cabinet 5^th March, 2014.

Discussion ensued on the presentation with the following comments made:-

·           Important for all parties to share their budget proposals to enable collaborative working and achieve maximum impact for the funding available – also to ensure partners did not make budget cuts in the same areas

·           Once the full list of all the saving proposals had been compiled Impact Assessments would be worked up to accompany the report to Cabinet to enable Members to be aware of the effect of the savings

Pete was thanked for his presentation.