Budget assumptions and key service issues
The initial projection of our spending requirements in 2008/09 based on providing the same level of service as in 2007/08 indicated that £222.6 million would be required to fund our services. This represented a £24.4 million increase on our 2007/08 budget or £17.8 million on a like for like basis as described below:
| Budget assumptions/key service issues | (Million pounds) |
|---|---|
| 2007/08 base budget | 198.2 |
| Add back one off items used to support the 2007/08 revenue budget | |
| - use of reserves | 0.6 |
| - one off savings proposals (to be substituted in 2008/09) | 1.0 |
| Government grants changes - transfer of specific grants into Formula Grant | 5.1 |
| Adjusted 2007/08 base budget | 204.9 |
| 2008/09 expenditure pressures: | |
| - pay and price inflation | 8.4 |
| - capital financing costs | -0.4 |
| - government funding withdrawal | 4.1 |
| - pay and grading review | 4.2 |
| - other adjustments | 1.4 |
| Initial projection of budget requirement 2008/09 | 222.6 |
The provision for pay and price inflation includes £1.4 million for cost increases from external service providers, e.g. waste disposal £0.9 million and public transport £0.5 million. Like many households the council is faced with big cost increases for our utilities, e.g. 12.5% for water and 5% for gas and electricity. Apart from these exceptional items, we allow no more than 2.5% generally for inflation in other services where externally determined charges are outside the direct control of the council and impose a cash freeze on general supplies and services budgets. Services are expected to manage these costs within the budgets allocated to them.
Also included in our budget are two exceptional items which together increased our budget requirement by approximately £8 million.
- Local Authority Business Growth Incentive Scheme (LABGI) - the
Government has withdrawn its funding for the LABGI scheme which allowed authorities to retain any business
rates generated from new business development. The Government has consulted local authorities on the
possible reform of the scheme but no firm proposals have been announced and our budget position now
assumes a nil receipt in respect of this matter.
- Job Evaluation Scheme - the council along with the majority of local authorities, is undertaking a pay and grading review based on a job evaluation scheme. The scheme is designed to ensure that we have a fair and consistent basis for determining grades for jobs which also satisfies equal pay legislation. The 2008/09 revenue budget provides for the projected increased cost of implementing the findings of the review.
The projected expenditure of £222.6 million was £9.5 million above the level of available resources To bridge this funding gap directorates were asked to identify efficiencies in line with the 3% targets set by the Government. In addition we commissioned KPMG to undertake an independent review of all services to identify efficiencies that could be delivered in the medium term. Collectively the above initiatives identified £7.1 million of efficiencies in 2008/09, increasing to £13.6 million in 2009/10 and £18.1 million in 2010/11.
Some of the above efficiencies have been re-invested in the areas of growth in our services. In particular the 2008/09 revenue budget provides for an increase in our recycling services, initiatives to provide access to employment for disadvantaged groups and development of primary care and community care facilities in partnership with the Primary Care Trust.
The net result of these actions was that a contribution from reserves of £4.3 million was required to deliver a balanced budget totalling £213.2 million. The 2007/08 projected service under-spends has provided excess reserves and allowed £1.2 million of these reserves to be used to support the 2008/09 budget. The use of an additional £3.1 million of reserves is linked to a strategy designed to replenish them in 2009/10 and 2010/11.
A summary of budget changes from 2007/08 to 2008/09
This page was last updated on 19 March 2008
Email this page to a friend
Bookmark this page using:
Find out more about social bookmarking.
These sites allow you to store, tag and share links across the internet. You can share these links both with friends and people with similar interests. You can also access your links from any computer you happen to be using.
If you come across a page on our site that you find interesting and want to save for future reference or share it with other people, simply click on one of these links to add to your list.
All of these sites are free to use but do require you to register. Once you have registered you can begin bookmarking. Each of the sites works slightly differently so use the links below to find out which service best suits your needs.
Find out more about social bookmarking at Wikipedia.
