Budget Approach
Argyll and Bute Council · 13 October 2022
Back to Policy and Resources Committee — 13 October 2022 and its agenda
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE FINANCIAL SERVICES 13 OCTOBER 2022 BUDGET APPROACH 1. INTRODUCTION 1.1 2. 2.1 The purpose of this report is to update the Policy and Resources Committee on the budget approach already commenced by officers to assist in identifying options to help close the gap and provide a high level draft budget timetable for 2023-24. RECOMMENDATIONS It is recommended that the Policy and Resources Committee consider the 2023-24 budget approach. 3. BUDGET OUTLOOK 3.1 The budget outlook position is continually monitored with an update reported to each Policy and Resources Committee. The latest budget outlook which is included within today’s agenda advises that in the mid-range scenario, the budget gap estimated over the five year period 2023-24 to 2027-28 is £33.011m with a gap of £7.284m in 2023-24. 3.2 Officers have already looked at some areas where there will be savings or additional income that could be built into the budget next year to reduce the budget gap. These emerging savings options amount to £5.240m and have already been built into the budget outlook. The most significant being the savings in respect of the service concession flexibility and a potential saving in Education due to the forecast pupil numbers over the next 5 years. The cost of the pay award in 2022-23 added £2.112m to the gap with a further £2.234m added to the pay award assumption in 2023-24. 4. 2023-24 BUDGET APPROACH 4.1 Officers have already commenced work on a budget approach for 2023-24 and there are two main aspects to this work: A review of services considering whether it’s a duty, power or non- statutory service. A service redesign exercise assuming 75% of existing budget. Duty, Power or Non-Statutory Review 4.2 A number of years ago, templates were populated with information as to the legislative basis for the provision of service i.e. statutory duty, statutory power or a non-statutory service. The Executive Leadership Team (ELT) agreed that it would be beneficial to revisit and update the information contained in these
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templates as they did provide good evidence that could assist the Budget Working Group and full Council in any future decisions they need to take on the budget. 4.3 A new template has been created based on lessons learned from the previous template to make it much clearer on what elements of a service fall into which legislative category. Financial Services have produced a list of service activities based on the controllable budget and the templates will align to this list. The list of activities is attached in Appendix 1 for Members information. 4.4 In 2022-23 only 27% of our budget is controllable and the service activity appendix shows where this budget is being spent. In order to balance the budget, a number of the activities would need to significantly reduce or stop altogether. You will see that this is a challenging task as many of the activities provide much needed services for our communities. 4.5 The templates have now been completed by all services and an ELT group will be reviewing over the month of September. It has been agreed that we will review the information provided in relation to discretionary activities first and consider if any of these could be materially reduced or stopped. As required we would then move on to Powers then Duties and again consider if any of these activities can be challenged/materially reduced/delivered in a different way. Service Redesign 4.6 An additional template, at Head of Service level, has been completed by all Services outlining what the service would look like if it had to be redesigned with 75% of the current funding. The templates should provide sufficient clarity that outlines what the service would be doing, what they wouldn’t be doing and what would be getting done differently. 4.7 As with the duty, powers templates, the ELT group will be reviewing these over the month of September. It is the group’s intention to go through and identify (a) any specific options which could be used to reduce the budget gap in 2023- 24 and (b) see what the group can come up with in terms of (i) picking out the genuine redesign proposals in the submissions and (ii) as a group coming up with any further ideas on service redesign which will deliver savings in the longer term. 4.8 The ELT group will meet on a weekly basis in September and report progress initially to ELT for discussion and then onto Budget Working Group. It is hoped to have a set of proposals in October. 5 Budget Timetable 5.1 A high level budget timetable has been produced and is included in Appendix 2. The timetable includes the following: Late October – once a set of proposals has been produced by the ELT group.
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8th December Policy and Resources Committee – a report on the budget proposals identified to date. 15th December – estimated date for the Scottish Government budget announcement. Should further working groups be necessary these can be scheduled as required. A Members Seminar has been scheduled for the end of January prior to the budget pack being published. 6. CONCLUSION 6.1 Officers continue to monitor the budget outlook position regularly and update and report to Members any changes. The Council is facing a significantly challenging budget gap which will likely require some services to be stopped in order to balance the budget. 6.2 7. 7.1 7.2 7.3 7.4 7.5 7.5.1 7.5.2 7.5.3 7.6 7.7 7.8 A budget approach has been developed by ELT alongside a budget timetable and a set of proposals will be brought forward to a future budget working group and Policy and Resources Committee for consideration. IMPLICATIONS Policy – sets out that budget approach that will inform policy decisions. Financial – Sets out the budget position as reported in the budget outlook. Legal – None directly form this report but the Council will need to balance the budget. HR – None directly from this report but there is a strong link between HR and budgets. Fairer Scotland Duty – See below - Equalities – None directly from this report but any proposals to address the estimated budget gap will need to consider equality issues. - Socio Economic Duty - None directly from this report but any proposals to address the estimated budget gap will need to consider socio economic issues. - Islands Duty - None directly from this report but any proposals to address the estimated budget gap will need to consider any island specific issues. Climate Change – The Council is committeed to addressing climate change and reviews how Services are delivering this on an ongoing basis within the available budget resources. Risk - None directly from this report but any proposals to address the estimated budget gap will need to consider risk. Customer Service - None directly from this report but any proposals to address the estimated budget gap will need to consider customer service.
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Kirsty Flanagan Executive Director/Section 95 Officer 15 September 2022 Policy Lead for Finance and Commercial Services: Councillor Gary Mulvaney APPENDICES: Appendix 1 – Budget Activities 2022-23 (Controllable) Appendix 2 – 2023-24 Draft Budget Timetable For further information contact Anne Blue, Head of Financial Services anne.blue@argyll-bute.gov.uk
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APPENDIX 1 Budget Activities 2022-23 Controllable Budget Only
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APPENDIX 2 2023-24 DRAFT BUDGET TIMETABLE Date Event Purpose 7 Sep 2022 Budget Working Group Introductory meeting to set out approach, updated budget gap, and provide initial indication of any emerging options. Month of September ELT Group working through Duty, Powers & Non-Statutory Templates and 75% Service Redesign Templates To identify savings options for 2023/24 and possible future years. Early October 2022 ELT Review saving options identified by ELT group. 13 October 2022 P&R Committee Updated Budget Outlook 2023/24 to 2027/28 Late October 2022 Budget Working Group Update on emerging saving options. 8 December 2022 P&R Committee Updated Budget Outlook 2023/24 to 2027/28. Report on budget proposals identified to date. Estimated 15 December 2022 SG Budget Announcement Week beginning 19 December 2022 Budget Working Group Update following SG Budget Announcement. Week beginning 16 January 2023 Budget Working Group Update on proposals to balance the budget. End of January 2023 Elected Members Seminar Budget 2023/24 Update 9 February 2023 Budget Pack published Budget pack included in release of P&R papers. Including: Individual EqSEIA’s; EqSEIA covering budget as a whole 16 February 2023 P&R Committee Consider budget proposals and make recommendations to Council. ? February 2023 EJCC Budget 2023/24 Update 23 February 2023 Council Set Budget By 30/06/23 Services Proposed date of redundancies for any proposals that have been agreed by Council