Item 6-Appendix 8
West Dunbartonshire Council · 5 March 2025
Back to West Dunbartonshire Council — 5 March 2025 and its agenda
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saa.gov.uk/dab-vjb assessor@dab-vjb.gov.uk Peter Hessett Chief Executive Officer West Dunbartonshire Council 16 Church Street Dumbarton G82 1QL 30 January 2025 Dear Peter DABVJB Constituent Contributions – 2025/26 I would like to provide an update to you on the financial challenges facing the Board and the estimated 2025/26 – 2027/28 revenue budget gaps, along with a request to increase the level of contribution that your authority makes to the Board. Since 2012/13, the core constituent funding to the Board has either reduced or been ‘flat cash’ having settled upon a figure of £2,611,171 for the past 7 years. Carrying out only statutory services, for which no charge is levied to users, the Board has no ability to raise extra income, and is therefore reliant on constituent contributions to ensure the statutory obligations carried out on behalf of each unitary authority are met. With constituent contributions having been frozen for so long, the Board has been heavily reliant on reserves, and direct grant funding from Scottish and UK Governments over previous years in order to meet its ongoing revenue requirements which include continuous cost pressures coming from increased pay awards and high inflation. The table below shows the depletion in reserves, indicating that the revenue reserves will be fully utilised by 2025/26. This is consistent with the trend reported within the long-term finance strategies as presented to Board: Year Movement in reserves Revenue Reserve £ £ 20/21 700,111 21/22 202,314 902,425 22/23 (71,643) 830,782 23/24 (197,723) 633,059 24/25 (est) (253,116) 379,942 25/26 (379,942) 0 Kilbrannan House Bolgam Street Campbeltown PA28 6JY 01586 555300 235 Dumbarton Road Clydebank G81 4XJ 0141 562 1200 APPENDIX 8
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saa.gov.uk/dab-vjb assessor@dab-vjb.gov.uk Cost Pressures The Board faces ongoing financial challenges, specifically noted as follows: 2025/26 Pressures • Nationally agreed payawards have been funded by reserves for many years, with no additional funding provided by Scottish Government or constituent authorities. • Increase to Employers National Insurance Contributions effective from 1 April 2025. • Non-domestic Rates Revaluations (occurring more regularly following Barclay reforms) will be required during 2025/26; requiring the issue of Draft Valuation Notices (another Barclay Reform) in addition to final Valuation Notices. • An additional Electoral Registration write out as required by the UK Elections Act. In a change to funding models, the Board will no longer receive Grant funding for the additional costs arising from the UK Elections Act. Instead, the UK Government (via MHCLG) have distributed the additional funding in England through Revenue Support Grants to Local Authorities. The consequence of this is that the money to fund these additional burdens on Electoral Registration Offices in Scotland is now transferred through Barnett Consequentials. At present, it does not look as though the funding is being passed on to the Board, and therefore no income has been included within the estimates. • The continuing new (since 2022/23) requirement for Assessors to establish on an annual basis whether each Self Catering property on the Valuation Roll satisfies the new legislative requirements to remain on the Valuation Roll, transferring those that do not, to the Council Tax List. The Board has a high proportion of these properties, with around 2500 properties requiring to be corresponded with, and provided information being scrutinised, a decision being made, and the Valuation Roll/Council Tax Lists being updated in response. No extra funding has ever been provided for this new annual burden, and it is therefore being resourced with existing staff. 2026/27 Specific Pressures • 2026/27 will see the Employers superannuation contribution rates increase from 6.5% to 17.5%. • The Board will deliver Electoral Registration functions for the Scottish Parliamentary Election. With such short timescales on the run up to a large scale election, the only way the statutory service can be delivered is with a reliance on existing staff to work overtime. Replacement Scottish Assessors (SA) Portal System • The SA Portal is a shared system among all Scottish Assessors. The Portal is jointly managed and funded by all Assessors in Scotland and has seen greater provision of information to ratepayers in recent years following Barclay recommendations. The Board contributes towards the maintenance of the current system; which represents exceedingly good value at a cost of approximately £15,000 per year. The technology behind the Portal is now end of life, and a project has begun to deliver a refresh of the system, using current technologies. Indicative costs are in the region of £2.5m. Discussions are taking place with the Scottish Government in an attempt to secure funding, however the Board may require to fund a share of the upfront capital costs and then continue to support the ongoing revenue maintenance costs.
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saa.gov.uk/dab-vjb assessor@dab-vjb.gov.uk The Budget Gaps Taking the above cost pressures into account, the initial work carried out on the estimates for the next 3 years indicates the following budget gaps: 2025/26 2026/27 2027/28 Net Expenditure £3,414,952 £3,714,635 £3,820,425 Constituent Contribution (£2,611,171) (£2,611,171) (£2,611,171) Assumed Barclay Funding (TBC) (£190,886) (£190,886) (£190,886) Use of Reserves (£379,942) £0 £0 Budget Gap £232,953 £912,578 £1,018,368 Measures to Balance the Budget The statutory functions provided by the DABVJB provides a challenge in terms of identifying saving options to help address the future budget gaps. Employee costs represent 75% of the net expenditure budget. The establishment list was revised and streamlined during the 2024/25 estimates process, with 5 posts being deleted in order to help fund the cost of the new Assessors system. Moreover, the service continues to be put under immense pressure, due to the large number of trainee staff in post, placing additional demands on the limited qualified members of the team. Reducing staff would mean that statutory duties would not be fulfilled Essential operating costs such as postage and printing, computer licences and central support costs make up the remaining 25% of the net expenditure budget. Efficiencies have already been sought where possible through contract re-negotiations for machine rentals and computer software and increased efforts to channel shift where possible in terms of reducing printing & postages Other Considerations The condition of the DABVJB office buildings continue to deteriorate, with the Clydebank office being particularly bad. The outcome of a RAAC survey is awaited to establish if the building is affected. Once the outcome of this survey is known, consideration will be given to the future of the property, which may be as much a liability as it is an asset. The Board’s occupation of the property is relatively cheap, with no rent or service charges being payable, and repairs and maintenance expenditure being low, as only the most urgent of repairs are being carried out. Request for an increase in Constituent Contributions With the Chancellor of the Exchequer announcing significant increases in revenue and the anticipated additional Barnett Consequentials coming to the Scottish Government, and the funding model from both UK and Scottish Governments being toward funding via constituent authorities (rather than direct grants to the Board), it is now time to revisit the unsustainable approach of previous years to maintain contributions at a standstill level. The request for an increase in contributions aims to 1. rebuild the Prudential Reserve and 2. bridge the funding gaps as follows: 1.The Prudential Reserve The Board’s Prudential Reserves Policy states that the core “Prudential” Reserve be maintained at a level of 2% of net expenditure or £0.100m, whichever is higher.
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saa.gov.uk/dab-vjb assessor@dab-vjb.gov.uk 2. Bridging the funding Gap The impact on each authority, in order to rebuild the prudential reserve next financial year and to fully fund the budget gaps going forward is shown below: Increased contribution to core funding 2025/26 2026/27 2027/28 Additional Contributions: East Dunbartonshire 92,476 160,989 29,383 West Dunbartonshire 93,899 163,466 29,835 Argyll & Bute 146,578 255,171 46,572 Total increase in “core” funding 332,953 579,626 105,790 The estimates assume that the Scottish Government continues to provide Barclay funding to Local Authorities and that each authority continues to pass this through to the DABVJB. These contributions are in addition to the “core” funding increases highlighted above. However, should this funding cease, the shortfall would also need to be met from council contributions. The revised anticipated revenue contributions are as follows: Council Revenue Contributions Standstill 2025/26 Requested 2025/26 Estimate 2026/27 Estimate 2027/28 East Dunbartonshire 725,243 817,719 978,708 1,008,091 West Dunbartonshire 736,400 830,300 993,765 1,023,600 Argyll & Bute 1,149,528 1,296,105 1,551,277 1,597,849 Total contribution 2,611,171 2,944,124 3,523,750 3,629,540 The Board has been driving efficiencies for around twenty years now, and has reached the point of being at minimum resource requirement to deliver solely its statutory responsibilities. I have charted the Board’s progress on its journey of delivering efficiencies. The table below shows the Board’s agreed budget in 2005/06, compared with the estimates for 2025/26. I have also index linked the 2005/06 Budget with RPI to show where the coming years budget would be if funding had been kept simply in line with inflation. By my calculations, this demonstrates that the Board has delivered efficiency savings of over £1.8m annually, a reduction of 35% over a period of 20 years. The majority of the savings have been realised through a reduction in workforce numbers of 27%.
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saa.gov.uk/dab-vjb assessor@dab-vjb.gov.uk 2005/06 Budget Estimate As % of Total 2005/06 Estimates indexed to 2025/26 2025/06 Estimated Budget As % of Total % increase of Budget 2005/06 to 2025/26 Employee Costs £2,063,550 78.74% £4,147,735 £2,552,459 74.54% 24% Property Costs £119,800 4.57% £240,798 £128,367 3.75% 7% Supplies and Services £19,750 0.75% £39,697 £175,471 5.12% 788% Payments to other bodies £7,000 0.27% £14,070 £10,856 0.32% 55% Admin Costs £370,450 14.13% £744,604 £556,822 16.26% 50% Other Expenditure £40,250 1.54% £80,902 £227 0.01% -99% Gross Expenditure £2,620,800 100.00% £5,267,808 £3,424,202 100.00% 31% The Joint Board have a further new obligation arising from the Barclay Reforms, and that is a report required under s.24 of the Non-Domestic Rates (Scotland) Act 2020 on the resourcing of assessors. The Board requires to report to the Scottish Government by 31 May this year. A paper on the report will require to be approved by the Board in March. I would ask that if you would like to input to this paper, that you engage with myself and the Treasurer by the end of February. I would seek your support in preparing for the above requested assistance to the Board, and would be pleased to reach an agreed position ahead of the Joint Board meeting on the 28th March, where the Board will agree its budget for the next financial year. If I can be of any further assistance, please do let me know. Best wishes, Russell Hewton Assessor & Electoral Registration Officer