Budget assumptions and key service issues

The initial projection of our spending requirements in 2010/11 based on providing the same level of service as in 2009/10 indicated that £236.0 million would be required to fund our services. This represented a £17.7 million or 8.1% increase on our 2009/10 budget and provided for the following:

The employers organisation (the national body which sets annual pay increases) has indicated that they will be applying a pay freeze in 2010/11 and this was reflected in our projection.

The provision for pay adjustments includes the cost of the increase in the pension contribution rate of 0.7% as required under the review of the greater manchester pension fund and annual increments associated with the pay and grading structure which has recently been subject to an independent review.

Price inflation is largely related to the cost of services provided by external organisations including waste disposal £0.4 million and public transport £0.9 million which includes costs relating to metrolink and the transport fund. Apart from these exceptional items the council has imposed a cash freeze on other supplies and services budgets. Services are expected to manage these costs within the budgets allocated to them.

The continued severe reduction in the level of income received from the sale of our surplus assets is set to continue in 2010/11 until developer confidence returns and offered values become more favourable. This income is used to support our capital investment and as a result we have had to increase our borrowing. We have assessed very carefully the affordability of this as it has to be serviced from the revenue budget and believe that it is both affordable and necessary if our regeneration plans are to be maintained.

Budget pressures continued from 2009/10 include the loss of income within sustainable regeneration and customer and support services and pressures on our children's services.

The formulation of the 2009/10 budget included a number of one off ‘saving' proposals required to achieve a balanced budget based on a 3% council tax increase. This included the use government grants and excess funds and provisions. These needed to be replaced with alternative saving or efficiency proposals in 2010/11 before any other budgetary factors were considered.

Balancing the budget

The initial budget projection was £15.4 million in excess of the available resources of £220.6 million based on freezing the council tax at the same level as 2009/10. To bridge this gap the council has continued with its think efficiency programme and directorates have continued to review their service provision to identify further scope for efficiencies. Together these proposals have identified £12.3m of service efficiency proposals. In addition the council has identified the one off use of government grants to support the revenue budget and been able to use ‘excess' reserves resulting from the 2009/10 projected underspend. In summary a balanced budget has been achieved as follows:

Next year's budget will help the council to deliver its medium-term financial strategy of maintaining the financial health of the council, maintaining our core services by avoiding cuts in service, expanding service provision and supporting our partners in Salford by investing more resources in safeguarding children, seeking to encourage more people into work, and also reducing crime and anti-social behaviour.

Efficiencies

Councils are required to have regard to economy, efficiency and effectiveness in their actions. An efficiency saving occurs when the cost of an activity falls, but its effectiveness is not reduced. In 2009/10 we continued the ‘think efficiency' review of our services to identify areas where efficiencies could be made. This programme delivered £2.4 million of efficiencies in 2008/09, an additional £8.3 million in 2009/10 and a further £5.4m in 2010/11.

The think efficiency programme of efficiencies will be delivered through: 

• Improved procurement methods such as contract price reductions and rationalisation of numbers of suppliers.
• The creation of centralised common service functions across the council in:      
• Administration
• Strategy policy and performance
• Marketing and ommunications
• Transactional finance
• Transactional human resources
• Democratic services
• Programme and project management
• Organisational training and development.
• A reduction in the numbers of tiers of management down to a standard of four.
• A true council-wide customer services offering that creates a single point of contact for local citizens, partners and businesses.
• A reduction in the number of council staff through voluntary early retirement, voluntary severance, a deletion of vacant posts and natural wastage (i.e. staff leaving to take employment elsewhere).

In addition to the above directorates were asked to review other service areas to identify efficiencies. A number of proposals have been accepted and implemented which will achieve budget reductions of £6.9 million.

Schools budget 

This page was last updated on 8 March 2010