Council publishes 3 year budget plan to deliver £64.5m savings

A radical re-think about how local services are delivered will enable Plymouth City Council to deliver its priorities for the city despite a £64.5m funding gap caused by Government cuts.

The Council’s Cabinet is set to recommend a £202 million revenue budget for next year to deliver more than 300 day-to-day services such as refuse collection, street cleansing, libraries, parks and protecting vulnerable children and adults.

The draft budget to be considered by the Cabinet on December 10 aims to deliver the Council’s ambitions to become a brilliant Co-operative Council and protect front line services, while investing in growing the city’s economy, reducing health inequalities and improving Plymouth’s roads.

This is despite the Council having to deal with Government cuts of £30m over the last few years and another £33 million of funding cuts over the next three years – a real terms cut of 26 per cent.

The Council is aiming to achieve this by taking a proactive approach to addressing the cuts, which along with rising costs and increased demand for services, has led to projected £64.5m shortfall within three years.

As part of its proactive approach the Council will be setting an indicative three year budget for the first time.

The key elements of its plan to reduce spending and raise income are:

Transformation programme: The Council is embarking on a radical programme that will deliver more than £24m savings per year by 2016/17. It aims to achieve this by growing the economy and raising income by taking a more commercial approach; joining up how health, well-being and social care is commissioned and delivered with partners; providing services in new ways such as shared services and co-operatives; changing how customers can interact with the Council and refocusing its support services.

Raising income: As well as taking a more commercial approach to how it uses its assets, the Council will take a proactive and fairer approach to fees and charges. It has introduced a revised fees, charges and concessions policy which means fees and charges will be reviewed when appropriate instead of being part of an annual budget setting process. Increases will now be linked to the consumer price index to better reflect the impact of the cost of living on residents and existing arrangements will be reviewed to recover the full cost of service delivery where relevant. It is anticipated that these changes will raise an extra £3.6m a year by 2016/17.

Redesigning services: Redesigning a range of services and providing them in new ways. For example, the Education, Learning and Family Support service could become a co-operative to enable it to continue to provide high quality services while trading and generating income.

Co-operative partnerships: The Council is exploring ways of working in partnership such as setting up a shared ICT service and joint working with other public sector partners.

Reducing costs: The Council will be continuing to challenge all spending and to negotiate contracts that provide better value.

Council Tax: The budget assumes Council Tax will need to rise by 1.9 per cent, which will protect £1.7 million funding for local services. The rise is the equivalent of 38 pence a week extra for most Plymouth households (Band A) and 42 pence for households in Band B.

Plymouth will still have the lowest average Council Tax levels in the South West.

The Council understands the impact any rise will have on residents and will be changing the Council Tax support scheme to ensure that 16,000 people who currently pay a maximum of 25 per cent towards the cost of their council tax will in future pay a maximum of 20 per cent. This means an average real terms benefit of around £50 per person.

A smaller workforce: It is inevitable that the financial reductions will result in a smaller Council workforce. The budget anticipates a reduction of more than 300 posts. The Council remains committed to minimising the impact on individuals where possible by managing vacancies and running a voluntary release scheme.

It has been working to reduce management overheads in order to protect frontline services. Over the last two years chief officer costs have reduced by £960,000.

The proposals aim to deliver the savings needed but the Council has still to identify how it will find another £1m savings before it can set a budget in February and residents’ views will influence how this is achieved.

The Government has still not announced its funding settlement for local Government so there is also uncertainty over future funding levels. The implications of any announcements will be reported to the Cabinet in February.

As part of its commitment to taking a co-operative approach to working with Plymouth residents and its partners, the Council is carrying out a Listening Plymouth survey to hear views about what services residents value most and how they would like to be involved in decision making about local issues in the future. Residents can give their views until Friday 6 December.

Councillor Mark Lowry, Cabinet Member for Finance, said: “The scale of the challenge we face due to Government funding cuts is daunting but we have been determined not to let it devastate local services. The only way to address the scale of what’s ahead and protect front line services is to radically rethink how we do things. This means using our co-operative values to fundamentally change how we deliver services.

“The scale of the change that we need to deliver should not be underestimated. I am confident that we can do it as we have a strong vision and a commitment to working co-operatively with our communities and our staff to achieve it but there are still some very difficult decisions ahead.

“I would encourage everyone to get involved and have their say by taking part in the Listening Plymouth survey as this is a real opportunity to influence important decisions about local services.”

The draft budget will be considered by Scrutiny in January. At its meeting in February the Cabinet will consider the recommendations from Scrutiny, the results of the consultation exercise and any funding settlement changes. A final budget is due to be adopted by Full Council on 24 February.