Agenda item

APPENDIX A

 

BUDGET SPEECH 2010/2011

 

Introduction

Lord Provost, members of Aberdeen City Council.  As Leader of the Council it is my responsibility to propose the General Fund Revenue and Non Housing Capital budgets along with the Council Tax for the coming financial year.

 

As I do so, I wish to put on record my appreciation of the hard work by elected members and officers which has gone in to producing the budget proposals already agreed by Council late last year and those before us today.  I also wish to thank those partners and stakeholders who took part in the budget engagement meetings led by the Chief Executive in the weeks running up to the Council meeting in December.

 

The revenue budget I propose today Lord Provost will allow the Council to spend £456 million providing services to the citizens of Aberdeen.

 

Financial Context

Lord Provost, every member of the Council is well aware of the unprecedented global financial situation we currently face and the impact it is likely to have for some years to come.  I am proud to lead the Council in one of only a handful of cities in the UK well-placed both to ride out the difficult times ahead and indeed to play a major role in bringing the country out of recession. 

 

We must recognise however, that this puts an extra burden of responsibility on the Council to ensure that we do everything we can to enhance and augment the economic sustainability of the City and indeed the wider North East while at the same time dealing with the impacts of the recession closer to home. 

 

Grant Settlement

One of the less fortunate consequences for the Council of the vibrancy of the City’s economy is a view that seems to prevail with some that given the relative wealth of Aberdeen, the City’s public sector including the Council does not require similar levels of investment to those provided elsewhere in Scotland.  This is a fallacy Lord Provost.  A fallacy that short changes the people we serve.

 

The situation has been further compounded recently by the Cabinet Secretary for Finance and Sustainable Growth accepting the COSLA position that the local government funding distribution formula is “fit for purpose” and contains “no genuine anomalies”.  The Cabinet Secretary has been left in no doubt that the perspective from Aberdeen is somewhat different and I am grateful that my Leadership Board colleagues will be joining me in making the case for the Council and the people of Aberdeen face to face with Mr Swinney when we meet him.

 

2009/2010

Lord Provost, against a background of international financial instability and given an unfair level of grant funding from central government the key responsibility for the Council is to identify the best way to provide the services that the people of Aberdeen need and deserve while ensuring a firm financial footing is established and maintained for the Council itself.

Massive strides have been made in this direction by the Council during the current financial year and it was hugely gratifying to have this work endorsed during last summer by the Accounts Commission which commended the Council on its progress across a range of activity and welcomed both the start made in improving our budget setting and the establishment of new management structures at both committee and officer level.

 

In addition to the work that has gone in to stabilising the Council’s finances and which continues to be at the forefront of our activity I think it is important to pause and recognise the considerable number of successful developments the Council has delivered or supported during the current financial year including the four new 3Rs schools opened to date, the opening of Aberdeen Sports Village and the reopening of the Linx Ice Arena for the European Curling Championships. 

 

Aberdeen Beach won a Keep Scotland Beautiful Award this year, six awards in the Beautiful Scotland in Bloom were taken by Aberdeen including the Gold Medal and the City Award and at the same time we have launched one of Scotland’s first and largest food waste collection services.  We launched the Green THI scheme in August to upgrade the historic heart of Aberdeen, we played an active role in the successful opening of Union Square and our City Wardens are now a familiar sight on our streets.  I would also like particularly to highlight our success in continuing to recruit new foster carers and adopters for our most vulnerable children.

 

However, I fully recognise that stabilising the Council’s finances has meant that difficult decisions have had to be taken on when, how, to whom, by whom and to what level services are delivered but it is our responsibility to ensure that in managing the difficult financial circumstances that face us we take the decisions that best provide for the long-term interests of the citizens of Aberdeen.  At the same time, the Council continues to deliver every day of every week services vital to the lives of those who live and work in the City. 

 

2010/2011 – General Fund

The budget I propose today continues this work.  Lord Provost, we wish to achieve the very best services for the people of Aberdeen but we must live within our means.  We have to spend the money entrusted to us wisely, we must be creative in maximising the value we gain from that spending and we must be honest with our residents about what we can and cannot do.  It is this thinking that underpins the budget proposals agreed by Council in December and the further decisions to be taken today.

 

The revenue budget set out today allows spending of £456 million during 2010/2011 including £183 million on Education, Culture and Sport, £120 million on Social Care and Wellbeing, £56 million on Housing and Environment and £27 million on Enterprise, Planning and Infrastructure.  In addition £25 million will be spent on Corporate Governance, £770,000 on the Office of Chief Executive and £37 million will be allocated to the Joint Boards including Police and Fire. 

 

These are substantial sums in anyone’s terms and it is the responsibility of our Committees supported by our senior management team to ensure that this public funding is used efficiently, effectively and in a targeted fashion to secure the very best outcomes we can for the people we serve.

 

At the same time, I am also pleased to highlight the fact that the Council’s working balances are moving back towards a prudent 3.5% of net spend.

 

However, 2010/2011 sees a further tightening of the public purse-strings and given the financial settlement the Council is likely to receive in future years I believe we must re-examine our major area of expenditure – staff costs.  With this in mind I request that the Head of Human Resources and Organisational Development, in conjunction with the Head of Legal and Democratic Services, review our employment costs looking at new ways of working, giving employees flexibility on working hours wherever possible, assessing pay awards and examining the potential for freezing pay scale increments.  

 

It is critical that all these reviews are progressed in conjunction with wide spread consultation with our employees and the Trades Unions which represent them to ensure that their views inform the recommendations brought back to Committee.  These recommendations must set out sustainable expenditure reductions to be implemented during 2010/2011.

 

However, I am also pleased to announce today that funding will be allocated in the revenue budget for 2010/2011 to introduce a minimum wage of £6.72 per hour for Council staff.

 

2010/2011 – Non-Housing Capital

The proposed Non-Housing capital programme for the coming year provides for the delivery of a number of major projects including the proposed 50m pool, new corporate office accommodation, the new biomass heating system for the Duthie Park Winter Gardens and major improvements to the City’s roads infrastructure.

 

Priorities

Lord Provost, I believe it is important on budget day not to lose sight of the fact that the budget is a means to an end, not an end in itself.  While in no way underestimating the difficulties in achieving it, establishing a balanced budget and living within it should be a given.  The crucial issue for us is that the financial resources which we are discussing today must be deployed to support our efforts to deliver on the major priorities which face the City.  In focussing on achieving this, at the Council meeting in December last year we agreed an Interim Business Plan which brings together our commitments as set out in the Council’s policy statement Vibrant, Dynamic and Forward Looking and the City’s Single Outcome Agreement with the Scottish Government.

 

I believe that we need to press forward and re-double our efforts in five key areas of activity:-

 

• the services we provide and secure for the most vulnerable members of our community

 

• the opportunities we provide for all our school children to attain and achieve to the very best of their potential

 

• the arrangements we make to encourage an increase in recycling as a means to address the challenge of the City’s waste

 

• the framework we establish to encourage the building of new affordable housing within the City

 

and

 

• the support we put in place to ensure the sustainable economic future of the City

 

At the same time we must continue to ensure that our internal support services are modernised to underpin efficiently and effectively the Council’s delivery of outcomes for the people of Aberdeen.

 

2011/2016

Lord Provost, I have spoken already about the impacts we, like all other public sector bodies, face as a result of the measures taken in response to the global economic downturn.  I have spoken too about the impact on the Council of the unfair local government funding formula.  These provide the financial context within which we must operate now and into the foreseeable future.

 

I commend to the Council the work that has taken place to date in delivering on the 2009/2010 budget and in establishing the 2010/2011 budget proposals in order to continue to move the Council’s finances onto a more firm and sustainable footing for the longer term.  But we are all aware that in the coming years we are likely to have to manage further reductions in the funding made available to us with which to deliver the services required within the City.

 

For this reason, I wish to see the 2011/2012 budget process begin today and I request that the Chief Executive and her Directors make all the necessary arrangements to bring forward a costed five-year business plan for the Council for the period 2011/2016.  This plan should be brought to the Council in time for it to inform the decisions to be taken on the budget proposals for 2011/2012 which will be considered at our meeting in December 2010.

 

I wish to see the business plan developed through open public engagement with citizens, service users, stakeholders and partners which honestly prioritises the services to be delivered by the Council in the coming years and clearly sets out those areas of activity which can no longer be funded.  I believe that we need to find more and better ways to debate openly with those we serve the constraints we face and the need there is to focus squarely on delivering the services that matter most to the citizens of Aberdeen.  We need to listen and then act.  We will seek to work closely with our public, private and voluntary sector partners in developing and examining options for service delivery.  

 

This service prioritisation will be further developed by taking a priority based approach using zero based budgeting principles.

 

Today

Returning to today Lord Provost and the 2010/2011 budget.  As members know, the Council agreed at its meeting on 16 December 2009 savings totalling just over £23 million on the General Fund revenue budget.  I now recommend that the Council agrees the additional measures set out on the schedule that has been tabled (papers 1 and 2).  These ensure that we today set a balanced budget providing for £456 million to be spent on services in the coming year.

I further recommend that there will be no increase in the Council Tax for 2010/2011 and that the Council agrees the proposals as tabled here today (paper 3).

 

On the Non-Housing capital budget I move the recommendations contained within the tabled paper before us along with the detailed proposals set out in the schedule tabled today (paper 4 and 5).

 

Conclusion

Lord Provost, there can be no disguising the difficult financial background against which the Council must deliver the services our citizens have a right to expect from us.  Public sector finance is under intense pressure and our own situation is further exacerbated by the many clear anomalies of a funding distribution formula which is far from fit for purpose.

 

This is a challenging financial situation which must and will be managed for the long term benefit of the people of Aberdeen.  I commend to members the work undertaken in the current year, the proposals formulated for the next financial year and the request I have made for the development of a costed business plan for the five years beyond 2010/2011.

 

For some years now the clear priority for the Council has been to re-establish and maintain the firm financial foundations from which to deliver on its obligations to the people we serve.  The budget before the Council today builds on and continues the progress we are making.  We can not be complacent; much remains to be done.  We will not shirk our responsibilities and we commit ourselves to driving forward the improvements the citizens of Aberdeen have a right to expect of us.

 

I so move.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paper 1

 

GENERAL FUND REVENUE BUDGET 2010/11

 

It is recommended that the Council agrees:-

 

In relation to the General Fund Revenue Budget:

a)                 the additional measures set out on the schedule that has been tabled, to ensure that a balanced revenue budget is set for 2010/11;

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

c)                  the Head of Human Resources and Organisational Development, in conjunction with the Head of Legal and Democratic Services, review our 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)                 the review of such costs is undertaken in conjunction with wide spread consultation with our 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)                 the Chief Executive and her Directors make all the necessary arrangements, including the commencement of a priority based budgeting approach to achieve a balanced budget for 2011/12 and future years, which includes stakeholder consultation, to bring forward a costed five-year business plan for the Council for the period 2011 -2016;

f)                    this plan should be brought to the Council in time for it to inform the decisions to be taken on the budget proposals for 2011/12 which will 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 has gone into producing the budget proposals already agreed by 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paper 2

 

ABERDEEN CITY COUNCIL ADMINISTRATION BUDGET PROPOSALS 2010/11
	£'000	£'000
Net Spend Approved by Council 10 December 2009	447,786
2009/10 Budgetary Pressures (Per Appendix 2)	9,297
Joint Boards Requisition	200
		457,283
2010/11 Growth Items - Appendix 4
Environment, Planning and Infrastructure
- International Direct Marketing	60
- Energy Management	5
- Affordable Housing Research	10
		75
Education, Culture and Sports
- Free school breakfasts in areas of deprivation	177
- Kaimhill Decant Provision	255
- Secondary Management Structures	435
- Primary 1 to 3 class sizes in areas of deprivation	246
- Management Information System for schools	125
- ICT Investment in Schools	60
		1,298
Social Care and Wellbeing Growth
- Elmwood Resettlement	250
- Impact of Demographic Changes	500
- Intensive Community Support	730
- Post Adoption Support	50
- Kinship Care Payments	300
		1,830
Additional Items  - Costs/(Savings)
- Winter Maintenance	15
- Special Waste Collections	22
- Transport Marshals	20
- Schools Teaching - Appendix 1 (L01)	200
- Contribution to Reserves/Contingency	3,571
- Introduction of £6.72 minimum wage	137
- Voluntary Severance/Early Retirement	(2,500)
- Review of Employment Costs	(4,500)
		(3,035)
Revised Net Spend		457,451
Additional Efficiencies - Appendix 3
- Water Savings	(171)
- Joint Public Sector Group	(20)
- 50% Reduction in Investment Fund	(900)
- NESTRAN Funding	(16)
- Democratic Services Structure	(13)
- Pets' Corner Income Generation	(34)
- Merge Welfare Rights/Debt Counselling	(82)
- Infosmart Creditors Processing	(183)
		(1,419)
Proposed Net Spend 2010/11		456,032
FUNDING
Available Funding (Per Appendix 2)	(454,561)
General Funding Grant Adjustments	(34)
Additional Efficiencies - Appendix 3
- Trading Services Revised Surplus	(320)
- Private Sector Housing Grants	(1,117)
		(456,032)
Proposed Budget Deficit/(Surplus)		0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paper 3

 

ADMINISTRATION PROPOSALS
ABERDEEN CITY COUNCIL
BREAKDOWN OF PROPOSED COUNCIL TAX CHARGES - 2010/11
	Council Tax	Water (Combined Water & Waste)	Total
Band	£	£	£
A	820.26	262.38	1,082.64
B	956.97	306.11	1,263.08
C	1,093.68	349.84	1,443.52
D	1,230.39	393.57	1,623.96
E	1,503.81	481.03	1,984.84
F	1,777.23	568.49	2,345.72
G	2,050.65	655.95	2,706.60
H	2,460.78	787.14	3,247.92
Notes
No increase in Council Tax
No overall increase in Water Charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paper 4

 

 

The Non Housing Capital Programme and Prudential Indicators 2010/11 - 2013/14

 

 

It is recommended that Council:

 

1. Approves the Non Housing Capital Programme for 2010/11 as circulated herewith; and

 

2. Approves the continuation into 2010/11 of projects funded by the Capital Fund as circulated herewith; and

 

3. Instruct Directors in conjunction with the Head of Finance to develop a 10 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; and

 

4. Instructs 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 can then be invested in the remaining assets; and

 

5. Approves the Prudential Indicators as per Appendix 6 of the Non Housing Capital Programme 2010/11 – 2013/14 and the Prudential Indicators report.

 

 

 

 

 

 

 

 

 

 

Paper 5

 

Appendix 3 (Page 1 of 8) Non Housing Capital Programme Summary
	Total Project Cost	Prior Years Spend	Projected Outturn 2009/2010	Estimated Budget 2010/2011	Estimated Budget 2011/2012	Estimated Budget 2012/2013	Estimated Budget 2013/2014
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Expenditure
Corporate Governance	27,860	3,031	4,741	12,720	4,204	3,164	0
Legally Committed	2,106	1,386	608	112	0	0	0
Partially Legally Committed	13,514	751	3,883	8,098	3,404	3,164	0
Not Legally Committed	12,240	894	250	4,510	800	0	0
Education, Culture and Sport	118,323	40,550	19,186	13,524	24,196	20,868	0
Legally Committed	56,667	38,638	14,566	3,403	30	30	0
Partially Legally Committed	44,656	1,912	4,349	8,738	15,075	14,583	0
Not Legally Committed	17,000	0	271	1,383	9,091	6,255	0
Enterprise, Planning and Infrastructure	198,204	27,098	29,873	56,234	28,975	26,258	29,766
Legally Committed	77,053	18,233	13,730	35,293	8,470	1,327	0
Partially Legally Committed	88,714	1,463	8,667	12,441	16,796	21,731	27,616
Not Legally Committed	3,350	7,402	7,476	8,500	3,709	3,200	2,150
Housing and Environment	38,764	1,271	12,295	12,174	9,352	3,226	446
Legally Committed	35,414	1,127	12,077	11,776	8,249	2,185	0
Partially Legally Committed	0	0	0	0	0	0	0
Not Legally Committed	3,350	144	281	398	1,103	1,041	446
Social Care and Wellbeing	11,528	8,460	760	2,108	200	0	0
Legally Committed	9,403	8,460	725	218	0	0	0
Partially Legally Committed	0	0	0	0	0	0	0
Not Legally Committed	2,125	0	35	1,890	200	0	0
Total – All Services	394,679	80,410	66,855	96,760	66,927	53,515	30,212

 

 

 

 

 

 

 

 

 

 

 

 Appendix 5

Projects Funded from the Capital Fund

 

		Revised Budget £’000	Total Spend to Date £’000	Under /  (Over) Spend £’000	Funding Required 2010/2011 £’000	Comment
1	ICT Schools	300	300	0	0	Complete
2	ICT Continuous Improvement	395	325	70	70	Various projects ongoing. Proposed to remove surplus funding.
3	Roads Investment	5,000	4,742	258	258	A full programme of works has been outlined and is ongoing.
4	Street Lighting	4,000	4,000	0	0	Complete
5	Repairs and Maintenance – Health & Safety	488	488	0	0	Complete
6	Improvements to Play Parks	450	403	47	47	Various projects ongoing.
7	Improving DDA Access	375	370	5	0	Complete
8	Improvements to Car parks	250	206	44	0	Complete
9	George Street	575	468	107	107	Project has commenced and is ongoing.
10	Improvements to Public Toilets	250	163	87	87	A programme of toilet refurbishments is ongoing.
11	Small Environmental Improvements	100	180	(80)	0	Complete
12	ICT investment	200	176	19	19	Various projects ongoing.
13	CRM investment	451	451	0	0	Complete
14	Investment in Cleaning	250	0	250	250	Held due to requirement for additional vehicle parking facilities.
	Total	13,084	12,272	781	812