Agenda item

The Resources Director introduced this item and delivered a related presentation which covered:

·             Reasons for the projected £6.0million budget gap

·             Trajectory of the medium term General Fund revenue budget gap of £2.7million in 2022-23 rising to £6.0million by 2025-26

·             The Savings Strategy

·             Definitions of Savings Types

·             Options / Workstreams

·             Considerations

·             Resources

·             Potential costs and benefits

·             Issues, assumptions and risks

·             Dependencies, constraints and opportunities

·             Reviewer List

·             Corporate Management Team and Executive Liaison Feedback

By way of introduction, the Director advised that the Savings Strategy related to the next five years and was intended to assist with mitigating the estimated £6.0million General Fund revenue budget shortfall.  There was an anticipated overspend of £9.0million in the 2020/21 financial year with expected financial pressure in 2021/22 owing to a delay in the Government’s pandemic lockdown easing plan.  Therefore, there was an urgent requirement to identify any and all potential savings that could assist with bridging the budget gap over the next few years.  Savings delivered to date included a reduction in staffing costs of £4.3million through the Future Guildford programme.

Areas highlighted in the presentation included the receipt of some one-off Government grants to provide financial support during the pandemic.  However, in general, Government funding had reduced by approximately 50% over the last five to six years.  In terms of the £6.0million budget gap, factors such as the Local Government Finance Settlement, the final accounts for 2020/21, the findings of the Capital Investment and Outturn Report and debt interests likely to be incurred in 2022/23 could all have an impact on the 2021/22 and 2022/23 financial years.

The Savings Strategy was a high priority piece of work required to secure the Council’s future financial viability which overarched a number of savings project workstreams that would each have their own individual mandate.  In terms of potential costs and benefits, some costs would be incurred in the process of identifying potential savings.  Attention was drawn to the need to apply the entire Strategy to closing the budget gap as no single savings strand would be sufficient to achieve this alone.

The Lead Councillor for Resources highlighted the fact that this Council spent significantly more on some service areas compared to other similar councils on a per head of population basis.  Although this would not render savings in such areas any less unpopular or controversial, it was emphasised that the Council needed to identify and progress spending reductions to address the budget gap.

The following points arose from related questions, comments and discussion:

1.           In terms of the Future Guildford programme, its Board had met on limited occasions during the past year owing to difficulties associated with the pandemic lockdowns.  The programme was nearing completion following the implementation of Phase B of the related restructuring and of the majority of the associated new technology.  However, some teams remained in a transitional period.  Following the instigation of the remaining ICT modules, a development pipeline for the new technology would be introduced, particularly around the Business World and Salesforce systems.  New processes such as the customer portal and revamped website were now operational.  Post project evaluation work would be undertaken and it was anticipated that the programme would be closed in September 2021 after which time consultants would no longer be required.  Ongoing savings of approximately £1.7million associated with the programme, mainly relating to procurement and asset investment, were yet to be delivered and it was anticipated that these areas would generate additional income over the next two to three years.  Other workstreams that were yet to realise savings had been absorbed into the Savings Strategy and formulated part of the Discretionary Services review.

2.           As the Benefits service was a statutory function, it did not form part of the Discretionary Services review and there were no proposals to reduce staffing in that service area beyond the reductions already made through the Future Guildford programme, which had also introduced related on-line accounts.  Whilst Housing Benefit was set by the Government and therefore out of the Council’s control, the Local Council Tax Support Scheme was determined by the Council, however, no guarantee could be made regarding possible future benefit reductions.

3.           Although town planning fees were statutory fees set by the Government and outside local authority control, the Council did have some discretion in respect of charges for pre-application advice and planning performance agreements and it was suggested that these should be increased as a measure towards offsetting the budget gap.  Whilst the Council had raised planning application fees in line with Government increases in recent years, they did not cover the cost of the planning service which was subsidised by the Council Tax payer.  There had been a significant increase in the volume of planning applications received recently.

4.           Whilst the potential costs and benefits associated with unitary authority / council merger options did not include potential redundancy or ICT costs as these would not emerge until the initial scoping study and business case had developed, such costs associated with Future Guildford were recorded and could possibly be shared with Waverley Borough Council in the light of a merger.

5.           ICT software costs and licence fees remained under review to ensure best value for money, particularly when the re-procuring of systems and services became due.  The increase in software costs related to the new systems introduced as a feature of, and funded by, the Future Guildford programme, which had been agreed as part of the related business case.  The costs were associated with the ‘Software as a Service’ cloud based facility which featured the payment of regular ongoing licence fees in place of the former arrangement where a software package was purchased as an initial one off capital sum.

6.           There was no certainty regarding the future Government grant trajectory.  The Government had launched a consultation in respect of the Fair Funding Review and Business Rate Retention Reforms in 2019 which gave an indication of its plans and informed calculations undertaken by the Council’s local government finance advisers regarding the Business Rate retention trajectory.  However, there was scope for the Government to pursue alternative courses of action and it was expected that further consultations would emerge in due course offering an indication regarding the future funding direction.

7.           Equality Impact Assessments (EIAs) would be undertaken in respect of some savings proposals, particularly those of a complex nature which would feature a mandate followed by a business case report to the Executive, via an EAB, which would include an EIA.

8.           Regarding measuring the impact of funding economies on services, there were a number of key performance indicators across services which were reported to the Corporate Governance and Standards Committee.  Performance indicators were also aligned to the Corporate Plan.  Any deterioration in service would become apparent through measurement against performance indicators.