Agenda item

DECLARATION OF INTEREST

 

            Councillor Fletcher declared a pecuniary interest in the following item of business by virtue of his position as Vice President of COSLA and withdrew from the meeting during the course of its consideration by the Council.

 

 

 

The Council had before it (1) a report by the City Chamberlain which presented a draft General Fund Revenue Budget for 2010/11; and (2) a further report by the City Chamberlain which proposed a Non Housing Capital Programme for 2010/11 and a provisional programme for 2011/12 to 2013/14.

 

The Council also had before it reports by the Director of Social Care and Wellbeing pertaining to (a) grants to the voluntary sector from the Social Care and Wellbeing budget and the impact of making savings across that budget; and (b) the proposal to tender for a single, mental health day support service which had the capacity to cater for existing service users of two providers with the purpose of achieving required budget savings.

 

The report on the General Fund Revenue Budget had attached as appendices (1) the range of options, under each Directorate, which were reported to Council on 16^th December 2009 (Article 13 of the minute refers), of which £23.070million had been approved for setting a balanced budget this day; (2) the latest forecast of net General Fund income and expenditure for 2009/10; (3) a list of savings and other efficiencies options which had been identified; (4) a list of items which had been deferred for a further report totalling £1.148million; (5) a table which provided a breakdown of items requiring the use of contingencies in 2010/11, which amounted to £2.830million of the £3.467million which had been set aside; and (6) a list of additional growth items faced by services totalling £7.940million.

 

The report advised of the updated current position, as per Appendix 2 to the report, highlighting that total projected expenditure less total funding was £10.662million. Further savings proposals, as contained within Appendix 3 to the report, totalled £2.916million which, when taken, reduced the shortfall in the budget to £7.746million.

 

Appendix 2 to the report also showed how the previously reported 2010/11 position had moved since reported to Council on 16^th December 2009. This outlined that at present there was a gross spend of £465.223million for 2010/11 if all of the 2009/10 budgetary pressures (£9.297million) and growth items for 2010/11 (£8.140million) were accepted. This updated position reflected the previously identified 2009/10 cost risks relating to sports income, children’s out of city placement/specialist care and the increasing demand for adult services.

 

The current projected spend for 2010/11 also included:-

• A revised corporate budget provision/contingency of £3.467million
• A sum of £1.897million for a revenue investment fund
• A total of £36.963million for Joint Boards requisitions
• A sum of £2.375million for the former ring fenced Fairer Scotland Fund

 

The report touched upon the additional growth items as set out in Appendix 4 to the report and highlighted that there was no pay award built into the base budget other than for teachers, whereby a negotiated settlement had previously been agreed for 2010/11. The budget did reflect, however, a freeze on the level of remuneration for elected members in 2010/11.

 

In regard to funding, the report stated that the total funding available to the Council would be £454.561million, assuming Council Tax levels were frozen and the Council received additional funding of £0.650million for adult support and protection which was expected to be notified separately. Contained within the settlement figure was the Council’s share of the whole of Scotland reduction in funding of £131million, this equated to £4.737million for Aberdeen or 3.6% of the whole of Scotland total. The report emphasised that Aberdeen City Council continued to be one of the lowest funded Councils in Scotland on a per head of population basis. The Scottish average was currently £2,049 per head compared to Aberdeen City Council receiving £1,724 per head (excluding the Council Tax freeze grant).

 

Referring to 2011/12 and future years, the report proposed that more of a zero-based approach be undertaken, rather than a predominantly incremental based approach, which would include stakeholder consultation and links to the development of the Council’s Interim Business Plan and Service Business Plans. The three year settlement for the period 2011/12 to 2013/14 was as yet unknown but predictions suggested that there could be reductions of around 12%, or 4% per annum, which would equate to around £14million per annum based on the 2010/11 grant settlement.

 

The General Fund Revenue report recommended:-

that the Council -

(a)              consider the content of the report;

(b)              make recommendations in regard to a final package of savings and efficiency options from those outlined to achieve a balanced budget taking account of 2009/10 budget pressures, 2010/11 growth items and feedback from consultation;

(c)               approve the commencement of a zero based budgeting approach to achieve a balanced budget for 2011/12 and future years, which included stakeholder consultation and links to the development of the Council’s Interim Business Plan and Service Business Plans; and

(d)              instruct the Head of Human Resources and Organisational Development and the Head of Legal and Democratic Services to report to the Finance and Resources Committee in due course on the outcome of a review of employment costs.

 

The draft Non Housing Capital Programme report explained that in order to maintain its capital programme at affordable levels, it was essential that the Council adopted a clear asset management strategy. The aims of such a strategy should be to utilise the Council’s asset base in the most efficient and effective way thus ensuring that capital investment was focused on making the best use of that asset base. In conjunction with this, it was important that the use of assets was critically assessed in order to identify where assets could be rationalised and disposed of as appropriate, in order to provide funding which could then be invested in the remaining assets.

 

The report appended (1) a definition of the different criteria used by services to distinguish between high, medium and low priority projects - each project had also been assessed to determine whether it was legally committed, partially committed or not legally committed; (2) a summary of the programme under consideration and the funding available should the programme, including those new bids ranked as high and medium, be approved - this showed a programme for 2010/11 totalling £96.518million before slippage; (3) details of individual projects within each service including the priority and legal commitment status given to each project by the service - this included those low priority projects which it was recommended should not be approved; (4) details of all new bid projects to be considered; (5) details of projects being funded from the Capital Fund; and (6) the Prudential Indicators the Council needed to approve in order to allow delivery of the approved programme.

 

 

The report explained that based on the programme within Appendix 2 to the report, the estimated total increase in capital financing costs from 2009/10 to 2013/14 was £18.386million. This effectively represented the cost the Council would have to meet in order to fund a programme at this level, which was not sustainable going forward and it was therefore essential for the programme to be reduced to an affordable level such that it could be funded solely by supported borrowing, capital receipts and grants and contributions.

 

The report concluded that the Council was currently in the position of undertaking a number of critical corporate, strategic and city-wide projects that would require a high level of capital investment over the next few years. This included the 50m Pool and Corporate Office Accommodation as well as various other major roads projects. It was however important that the overall programme reduced in later years to an affordable long term programme. The report added that once the programme was approved, regular monitoring would be undertaken and reported in detail to each service committee and in summary to the Finance and Resources Committee.

 

The draft Non Housing Capital Programme report recommended:-

that the Council -

(a)              consider and approve the revised Non Housing Capital Programme for 2010/11 as indicated in Appendix 2 to the report, which excluded projects identified as low priority;

(b)              consider the new bids as per Appendix 4 to the report, identifying any to be excluded from the programme subject to the comments by the City Chamberlain;

(c)               approve the continuation into 2010/11 of projects funded by the Capital Fund as per Appendix 5 to the report with the condition that projects must be completed during 2010/11 and no further carry forward of the funding would be available;

(d)              instruct Directors, in conjunction with the Head of Finance, to develop a ten year programme covering financial years 2011/12 to 2021/22 taking account of the approved Corporate Property Asset Management Plan, the Capital Prioritisation Process and the development of the Council’s Interim Business Plan and individual Service Plans;

(e)              agree that the Head of Resources Development and Delivery/Head of Asset Management and Operations, in conjunction with Directors, undertake a critical assessment of the use of assets in order to identify where they could be rationalised and disposed of, as appropriate, in order to provide funding which could then be invested in the remaining assets; and

(f)                 approve the Prudential Indicators as per Appendix 6 to the report, or as amended to take account of any programme changes agreed.

 

The report on the Social Care and Wellbeing annual grant making programme contained the table below, which showed the organisations in receipt of a grant and the recommendations in respect of those monies for 2010/11:-

 

Organisation	Funding Allocation	Recommendation	Anticipated Consequence
Aberdeen Action on Disability	£20k	Cease	The organisation will not continue in current form.  Potential to join with the Disability organisations.
Aberdeen Council of Voluntary Organisations	£22,837	Allocate fund through corporate governance	ACVO provides support to 3rd sector organisations across the spectrum of service provision.  Potential to develop Council wide SLA.
Age Concern Advisory Service	£3k	Cease	Local organisation service may cease - potential to be picked up by carers services, NHSG etc.
Age Concern Scotland	£20k	Cease	National organisation which can reallocate funds.
Befriend A Child	£40k	Allocate fund to mainstream funds and develop a service level agreement	This is a critical service to support children and young people and will be commissioned on an ongoing basis.
Counselling and Family Mediation	£20k	Allocate to mainstream funds and develop on Service Level Agreement	This organisation provides, amongst other things, a service to the Courts, e.g. in residence/ custody disputes. Local MSP and Sheriffs are keen to retain the service.
James Tyrell Centre	£40k	Allocate fund to mainstream funds and develop a service level agreement	Essential part of day care services for older people.
Quarriers	£5k	Cease	National organisation which can reallocate funds.
Samaritans	£10k	Allocate to mainstream funds and develop a service level agreement	Critical support for people with mental health problems in Aberdeen.
Scottish Motor Neurone Disease	£1,196	Cease	National organisation which can reallocate funds.
Shop Mobility Aberdeen	£22k	Cease	Now seeking funding from a range of other sources.
Victim Support Scotland -Aberdeen Service	£15k	Cease	National organisation who can reallocate funds.
Newhills Parish Church	£5k	Cease	Church organisation which has the potential to seek other funding services.
Who Cares? Scotland	£15k	Allocate to mainstream funds and develop a service level agreement	This service supports and advocates for children and young people who are looked after or looked after and accommodated.
WEA Reachout Project	£13,626.57	Cease	Services now integrated in learning disability day opportunities.
FARE (Food Action Reaching Elderly) DC	£4,500	Cease	Organisation has option to seek other funding sources.
Alten’s Over 50’s Project	£3k	Cease	Organisation has option to seek other funding sources.
Inchgarth Community Centre	£5,400	Allocate to mainstream funds and develop a service level agreement	This project is part of learning day opportunities.
Grampian Employment Opportunities	£4,500	Cease	Organisation has opportunities to seek other funding sources.
Cornerstone Aberdeen Employment Service	£9k	Cease	National organisation which can reallocated funds.
Bread Maker	£21,300k	Allocate to mainstream funds and develop a service level agreement	Allow purchase of services on a spot purchase basis.

 

TOTAL GRANT SAVED                                                          £115,822.57

 

TOTAL GRANT ALLOCATED

TO MAINSTREAM BUDGETS                                                £174,537.00

 

The report on the Social Care and Wellbeing annual grant making programme recommended:-

that the Council -

(a)              consider the grant awards and the recommendations of officers in regard to each organisation;

(b)              approve the mainstreaming of the amounts recommended and the subsequent savings from the grant fund; and

(c)               approve the discontinuation of the annual grant making programme from this year.

 

The report presenting proposals for Mental Health Day Services redesign advised that it had been requested by the Council at its meeting of 16^th December 2009 (Article 13 of the minute refers). The report expanded upon the proposal to tender for a single, mental health day support service which had the capacity to cater for existing service users at both Pillar Aberdeen and Mental Health Aberdeen’s Alford Centre, with the purpose of achieving required budget savings. The report also detailed the requirements of a single service.

 

The report presenting proposals for Mental Health Day Services redesign recommended:-

that the Council -

(a)              agree to the commissioning of a single mental health day support service;

(b)              agree to a contract being awarded following the tender process; and

(c)               agree that achievement of the saving of £150,000 would be made through a combination of part-year budget reduction to the current service providers and the commissioning of a new service.

 

Councillor John Stewart addressed the meeting in the manner reproduced in Appendix A to this minute and moved, seconded by Councillor Corall:-

            That the Council agree:-

            In relation to the General Fund Revenue Budget:

(a)               the additional measures set out on the schedule tabled, and within the reports by the Director of Social Care and Wellbeing, to ensure that a balanced budget was set for 2010/11;

(b)               that there be no increase in Council Tax for 2010/11;

(c)               that the Head of Human Resources and Organisational Development, in conjunction with the Head of Legal and Democratic Services, review the Council’s employment costs looking at reducing agency costs, new ways of working, giving employees flexibility on working hours wherever possible, assessing pay awards and pay scale increments;

(d)               that the review of such costs be undertaken in conjunction with widespread consultation with the Council’s employees and the Trades Unions and that their views inform the recommendations to be brought back to the relevant committee;

In relation to future Financial Planning:

(e)               that the Chief Executive and her Directors make all necessary arrangements, including the commencement of a priority based budgeting approach to achieve a balanced budget for 2011/12 and future years, which would include stakeholder consultation, to bring forward a costed five-year business plan for the Council for the period 2011-2016;

(f)                 that this plan be brought to the Council in time for it to inform the decisions to be taken on the budget proposals for 2011/12 which would be considered in December 2010;

 

In relation to the process of setting the budget:

(g)               that the Council acknowledge the hard work of officers and elected members that had gone into producing the budget proposals already agreed by the Council late last year and those before us today; and

(h)               that thanks go to those partners and stakeholders who took part in the budget engagement meetings conducted as part of this process.

 

In relation to the Non Housing Capital Programme and Prudential Indicators 2010/11 to 2013/14, that the Council:-

(1)               approve the Non-Housing Capital Programme for 2010/11 as reflected in paper 5 of Appendix A to this minute;

(2)               approve the continuation into 2010/11 of projects funded by the Capital Fund as circulated herewith;

(3)               instruct Directors, in conjunction with the Head of Finance, to develop a ten year programme taking account of the approved Corporate Property Asset Management Plan, the Capital Prioritisation Process and the development of the Council’s Interim Business Plan and individual Service Plans;

(4)               instruct the Head of Asset Management and Operations, in conjunction with Directors, to undertake a critical assessment of the use of assets in order to identify where they can be rationalised and disposed of, as appropriate, in order to provide funding which could then be invested in the remaining assets; and

(5)               approve the Prudential Indicators as per Appendix 6 of the report.

           

In relation to thereport on the Social Care and Wellbeing annual grant making programme, that the Council approve the mainstreaming of the amounts recommended, and the subsequent savings from the grant fund, with Service Level Agreements to be developed for those organisations, and that a report be submitted to the Social Care and Wellbeing Committee.

           

Councillor Crockett moved as an amendment, seconded by Councillor Graham:-

That this Council (a) defers its final budgetary decision pending the outcome of urgent talks with the Edinburgh Government’s Finance and Sustainable Growth Secretary ensuring that the Council can produce a budget on or before 11^th March 2010; and (b) agrees that Aberdeen City Council withdraws from COSLA at such a time as it was permitted to do so within the terms of the COSLA constitution.

 

 

On a division, there voted:-

 

For the motion  (32)  -  Lord Provost Peter Stephen; Depute Provost Dunbar; and Councillors Boulton, Cassie, Clark, Corall, Cormack, Cormie, Dean, Donnelly, Farquharson, Greig, Jaffrey, Kiddie, Leslie, McCaig, McDonald, Malone, May, Milne, Noble, Penny, Reynolds, Robertson, Jennifer Stewart, John Stewart, Kevin Stewart, Wendy Stuart, John West, Kirsty West, Wisely and Yuill.

 

For the amendment  (10)  -  Councillors Adam, Allan, Collie, Cooney, Crockett, Graham, Hunter, Ironside, Laing and Young.

 

Absent from the division  (1)  -  Councillor Fletcher.

 

The Council resolved:-

to adopt the motion.