Budget proposals look to the long-term

Somerset County Councillors will next week consider budget plans to tackle its funding gap and lay the foundations for long-term sustainability.

The financial plan being discussed by Full Council on Wednesday sets out a proposed net budget of £328m and total spending of £780m* on services in 2019/20, as well as £224m of investment in capital projects – including school buildings – over the next four years.

And with a total projected budget gap of £28m for the period 2019/20 to 2021/22, the proposals also include important steps towards future sustainability, wherever possible turning one-off funding into long term financial benefit.

“This has been a very tough 12 months with the continued decline of funding for local government,” said Councillor David Fothergill, Leader of the Council. “The financial realities have changed and although we will continue to lobby for fairer and sustainable funding, we also have to adapt and look ahead.

“Thanks to a lot of hard work from staff and many difficult decisions, we are proposing a balanced budget for the coming year that minimises the impact on services and lays tangible foundations for long-term sustainability.”

The budget proposals would allow the authority’s General Fund reserves to be increased to £19m by the end of the next financial year. This would restore the General Fund to an appropriate level and give extra resilience should the Spending Review and Fair Funding Review have a negative impact on the Council for 2020/21. A fund of this size also reduces the need to hold money in contingency and to pay contributions to reserves in future years – making more money available for services.

The plans also include proposals to explore investments that would quickly generate income to help fund of services. Councillors will be asked to agree that up to £100m of capital money – money which cannot be used for the day-to-day cost of running services – be set aside for such investments. A strategy would need to be developed, but options for investments could include assets such as property or land, businesses and investment funds.

 

An increase of 2.99 per cent in the County Council’s element of the Council Tax is proposed, along with the a 1 per cent increase ring-fenced for Adult Social Care. An overall increase of 3.99 per cent equates to a rise of 91p per week for a Band D property and provides an extra £9.4m for services.

As funding from central government local authorities continues to fall and demand for services rises, Councillors will be asked to approve savings proposals totalling around £8m towards the £15m budget gap. Of these, around £2m would have an impact on frontline services, the rest being achieved by back office and contract efficiencies, use of financial flexibilities and actions such as ending leases on underused buildings.

The other £7m is being achieved by actions already taken, including financial adjustments, use of one-off money from central government; and previous decisions such as the redesign of libraries services and ending our community leisure contract.

As discussed at Cabinet at the beginning of the week, extra funding for next financial year has been identified following the late financial settlement from Government, finalised Council Tax collection rates from district councils, and updated estimates of how much Somerset will benefit from the one-year Business Rates Retention pilot.

 

In total, the authority has £3.5m more than expected for 2019/20, of which around £3m is ‘one-off’ with £500,000 going into its base budget.

 

Additional budget proposals now going to Full Council include setting aside £500,000 for preventative work that would help to reduce or manage demand, thereby reducing costs in the long-term – as well as providing better outcomes for the public.

Cllr Fothergill added: “The future for this council, and I think local government as a whole, lies in working more and more in tandem with our partners and communities to prevent the preventable and delay the delayable – managing the demand on our services and helping our communities help themselves wherever possible.”

Full Council will also consider the recommendations made by Cabinet last week to make up to £200,000 available for winter maintenance in 2019/20. This would allow for a full review of gritting plans for next winter and potentially reverse the £120,000 winter maintenance savings for 2019/20 approved in September.

Cabinet also recommended that savings in gulley clearing and jetting be dropped, and that the following savings be delayed for a year:

  • Flood water management (£80,000)
  • Dementia support in care homes (£100,000)
  • Support to help vulnerable young people in to work (£50,000)

All the papers for the Cabinet meeting can be found on the Council’s website http://democracy.somerset.gov.uk/ieListDocuments.aspx?CId=137&MId=763&Ver=4

* Net budget is the net revenue expenditure (funded by Council Tax and Business Rates). Total spending is the gross budget which also includes spending funded by fees and charges and specific grants.

Proposals with a total value of around £8m will be considered by Full Council on 20 February. Around £6m of these are not expected to have an impact on front line services as they involve back office and contract efficiencies, further use of financial flexibilities, and actions such as ending leases on underused buildings. These proposals include:

  • Reorganising and reducing business support for social work services (£570k)
  • Reducing costs of IT contracts (£847k) and further efficiencies in other contracts (£168k)
  • Ending leases on underused buildings (£175k)
  • Selling of vehicles (£78k)
  • Holding children’s staffing positions vacant where recruitment has not been possible (£775k)

Around £2m of the proposals would have an impact on frontline services, either as reductions in service or changes that provide better outcomes by spending less. These include:

  • Reviewing care and support and ‘Promoting Independence’ (£1.1m)
  • Withdrawing support from eight Extra Care Housing schemes (£600k)
  • Reducing verge cutting (£90k)