I got a letter today

I got a letter today.

It's from someone who works for a Government that directly controls around 80% of my Council's funding. The same person works in an institution that has frozen any ability for Councils to influence the 'envelope' of the remaining 20%.

Basically, this means that despite growing service demands on Councils - central Government controls almost all of our funding.

The letter tells me that I'm only getting my annual grant settlement this year if our Council does 3 things ... can I be clear, these are not, per se, bad things to pursue:

1. spend specific ring-fenced monies on Integrated Health and Social Care
2. spend specific ring-fenced monies on support for teachers
3. not flex the 'envelope' in relation to the 20% of revenue I notionally control

If I don't accept these conditions (as a complete package) here's what it would mean for Edinburgh:

1. we will be penalised - and lose - some £20million of funding
2. we will be penalised - and lose - some £6million of funding
3. we will be penalised - and lose - some £7million of funding

So - if we don't do all of these things, as a complete package --- then Edinburgh will lose £33million of funding. That's equivalent to a 14% rise in Council Tax.

Now - I don't mind pursuing the three things above ... as I said, they are not, per se, bad things to pursue --- but I don't really have a choice do I.

For me - as someone committed to the delivery of local public services; with no interest in ever being a Holyrood or Westminster legislator (as that's what they're supposed to do there) - the letter is a complete disgrace, and makes an utter mockery of any semblance of a belief in local democracy.

Shame on those who wrote it - as they know full well what they're doing ... centrally directing local services.

What a truly sad day for local democracy in Scotland.

Time to let go ...

Spoke at the 3rd annual City of Edinburgh Council Conference this morning - some details via here ...

... I'll re-produce my speech-note below for those interested ;-)

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City of Edinburgh Council Conference

Many thanks for that introduction Euan …

 

… and good morning colleagues, & can I add my own very warm welcome to this “City of Edinburgh Council Conference” event,

here in the City Chambers.

 

It’s great to see so much interest in today's 3^rd annual Council Conference.

Euan, in the next 15-minutes or so, I want to start today’s proceedings by focusing on 3 main points:

 

1.   The City of Edinburgh itself

2.   The wider City Region & our Partners

3.   The view from Scotland’s 7 main Cities

& finally; I’ll say a few words about the Future City?

 

And talking through these 3 areas, I want to make the argument that Edinburgh is approaching a pivotal point in its development; and that a series of key – quite imminent – decisions, will have a crucial impact on our future direction.

 

For me, these are decisions that cannot be taken in isolation by the Council, the wider public sector, the private sector, or the voluntary sector … the whole City, and wider region, needs to be involved.

  

So – firstly; starting with the City of Edinburgh itself …

 

For all of the obvious challenges, there is absolutely no doubt in my mind that 2015 has been another successful year for the Capital City of Scotland.

 

Edinburgh continues to be a hugely attractive place to live, with an average of an additional 5,000 people choosing to move here every single year – that’s a 1% annual growth, which will soon see Edinburgh reach the half-million population mark.

 

Very few other UK-cities are drawing anything like this level of population-attraction to them on a yearly basis – and, for me, it still remains the case that Edinburgh’s overall ‘Quality of Life’ is what makes us stand out from the crowd.

 

And there’s simply no doubt that our local economy is a significant draw as well …

 

… Edinburgh is still outperforming all of our major UK-competitors; with Edinburgh continuing to rank as the city with the second highest ‘Gross Value Added’ (GVA) per resident, after London.

 

We also have the lowest claimant rate for Jobseekers Allowance – currently at less than 1.5% - of any major city throughout the whole of the UK.

 

And Edinburgh today has one of the most talented workforces in the whole of Europe – with 2015 seeing the percentage of the population of the capital, educated to degree level or above, almost reaching 50% for the first time.

 

And dare I mention that even the tram has had a successful year; with tram patronage increased by some 12% when compared to last year,

and the projected total of 5.1million passengers for the whole of 2015 meaning that the service continues to outperform targets set in the business model.

 

Turning to 2016, there is no question that the overall economic prospects for the City are positive. But that does not mean we are short of significant challenges; as perversely the success of the City economy does not translate to any direct, additional funding for the Local Authority.

 

Indeed, we face the double-whammy of an increasing population – with consequential growing demand for our services at both ends of the age-spectrum: more +80 years olds than ever before, requiring more social care than ever before; and more 3-5 year olds that ever before, requiring more Nursery and Primary education than ever before – and the undeniable fact that our revenue-funding is now declining;

 

… and anyone who noticed the local Council Budget being set last week, will know that these pressures have made for some extremely difficult decisions.

 

And inside the Council, as is often the case periodically whether in the public, private or voluntary sectors, we are seeing the implementation of a new management-structure; with a new Senior Management Team.

 

But, being the eternal optimist, these are all constructive challenges to be facing ... challenges of success and growth, not decline and stagnation.

 

And with a Scottish Parliament election on the horizon in May this year, we may even see the beginnings of a return of some fiscal flexibility to Local Authorities; with a serious debate already raging about the future of the Council Tax and how Local Government generally is currently being funded.

 

So clearly, there is much to look forward to here in Edinburgh - but also much work to do in the year ahead.

 

 

So - moving on Euan – secondly --- what of the wider City Region & our Partners therein …

 

I’ve clearly mentioned the strengths within the Capital itself …

 

… but I also absolutely understand the importance of the relationships we have with our surrounding areas of – particularly:

 

·        East Lothian

·        Fife

·        Midlothian

·        the Scottish Borders

·        and West Lothian

 

As most – if not all - of you in this room will know only too well, our local economy does not operate on local authority boundaries. We all rely on each other to help ensure the prosperity of our region and its residents.

 

And over the last year or so; I’ve been delighted to have been working closely with regional colleagues to help develop our city region deal bid.

 

Whilst we are not all of the same political persuasion, we do understand the challenges - and opportunities - for our region; and the role that a City Region Deal could have in helping to tackle these.

 

… because, despite the overall positive picture I’ve just painted of Edinburgh – you simply cannot deny that we are a very successful butALSO very divided City Region.

 

Collectively together we are responsible for over 30% of the Scottish economy and are a key economic driver of the UK – as mentioned earlier, we are indeed, the second most prosperous city in the UK and also the most productive city in Scotland. Foreign direct investment has been high, particularly in the city and the demand for workers is rising. 

 

However, we are also a divided region; with significant numbers missing out on the prosperity enjoyed by many.

As well as the strengths already outlined, the Region continues to be held back by issues of deep rooted inequality and needs to overcome significant infrastructure constraints and meet connectivity challenges if it is to fulfil its growth potential.

 

In the light of these strengths and constraints, it is crucial that the Region makes a step change in economic growth by seeking a City Region Deal with Scottish and UK Governments and establishing an associated Infrastructure Fund, with a complementary skills package.

 

And City Deals --- are already an important feature of the economic landscape down South, and as many of you will know Glasgow signed a deal around 18-months ago. Whilst each deal has been different they have all been targeted at empowering local areas to drive economic growth by providing them with additional resources and freedoms.

 

This city region has a unique set of assets. We have world class offerings in relation to our knowledge base, technology activity and cultural offering and we are keen to build on these.

 

We may have an impressive story to tell at a UK level but the competition is increasing, along with the pace of change.

 

Together our City Region partnership has a clear vision for the future:

 

In a fast-changing world we will create a region where investment, intellect and culture will fuse to create new ways of doing things. In the next 20 years the Edinburgh and South East Scotland City Region will become the most connected, most creative, most inclusive and most entrepreneurial place in Europe. We will build a network of businesses, universities, technical and creative skills attracted by a great lifestyle and cultural offer.

 

Our focus goes beyond infrastructure investment and includes a fresh approach to skills and innovation activity across the region. We are looking at the journey from school to the workplace and we want to ensure a better fit between the skills businesses require and those of our workforce.

 

At the heart of this proposition is the desire to secure additional substantial funding for Edinburgh, the Scottish Borders, Fife, Midlothian and East and West Lothian councils, in priority areas for investment such as transport, housing, economic regeneration, energy and digital connectivity.

 

It is crucially important that while doing this we also tackle the pockets of inequality, and other constraints, that threaten to hold the region back.

 

According to the Scottish Index of Multiple Deprivation 2012, over 12 per cent of the region’s population; is among the 20 per cent most deprived in Scotland.

 

So whilst the unemployment rate for the area, as a whole, remains around the Scottish average, there are localities with persistent high unemployment that must be tackled.

 

Skills are another area which needs creative thinking.

 

In areas such as construction, healthcare and tourism, we need more skilled workers to ensure that, in the decades to come, the wider City Region has a competitive edge to help us meet the challenges of a growing and ageing population.

 

Any investment would be supported by a complementary package of skills and innovation measures, such as business-led training academies in key growth sectors.

 

Our next steps will be to seek further dialogue with both the UK and Scottish Government on the development of a detailed proposition, which will ensure that we continue to grow, and at the same time reduce inequalities across one of Europe's most successful City Region economies.

 

Assuming a positive response from Ministers, detailed work - in partnership with representatives from both Governments - on prioritising potential investments would continue throughout the early months of 2016 … and by the middle of this year, there is every prospect of a multi-billion pound City Region Deal being in place.

 

 

So – thirdly Euan --- I thought I’d broaden the discussion out and mention a bit about the view from Scotland’s 7 main Cities …

 

… some of you will be aware of the Scottish Cities Alliance --- of Scotland’s 7 main cities: Glasgow, Edinburgh, Aberdeen, Dundee, Stirling, Perth and Inverness.

 

I currently Chair this Alliance – which is a partnership between the 7 cities and the Scottish Government --- whose support and encouragement has been crucial to the formation and development of the early years of the Alliance.

 

And I’ve already mentioned the challenges that our own City and surrounding Region is facing …

 

… just to re-emphasise the challenges --- in Edinburgh, the Lothians, Borders and Fife ... a region that many assume is relatively wealthy ... we have 21% of children living in poverty. We also have 24% of the population living in fuel poverty.

 

In 2015 - this is frankly unacceptable for a region that boasts nearly 50% of the population educated to degree or equivalent level; a city that is the second most prosperous in the whole of the UK; with some fantastic recent success stories, including being home to two tech companies now valued at over $1bn each, Skyscanner and FanDuel.

 

That picture of social inequality – sadly – can be evidenced from across any of the surrounding areas of Scotland’s 7 main cities.

 

That is why the seven cities are currently making 5 key asks of the Scottish Government in a ‘Discussion Document’ that we recently launched – entitled ”Empowering Scotland’s Cities”. (on SCA website)

 

That discussion document is essentially our pitch – our bid – into the welcome refresh of the ‘Agenda for Cities’ that the Scottish Government is currently consulting on – Scotland’s cities were key partners in developing the first ‘Agenda for Cities’ (basically – cities policy) back in 2011; and we’re very keen to play a constructive role in the refresh of that agenda as we approach the Holyrood Elections in May 2016.

 

And the 5 key asks, in our document, are:

 

1.   Control over decisions relating to key infrastructure projects. This could include- for example - transport, water, skills, health and local economic development

2.   Passing on to local areas all of Non-Domestic Rates and a proportion of the fiscal retention to be granted to the Scottish Parliament by the current Scotland Bill

3.   Freedom to raise local taxes

4.   A commitment to the continuation of support to progress City Deals and City Regions Deals in Scotland.

5.   The allocation of dedicated national resources at a city region level for inward investment.

 

Of course – and I think it’s really, really important to stress this point - this would not be one-way traffic.

 

In return, Scotland’s seven cities would:

 

1.   Ensure Scotland’s cities became increasingly recognised and desirable places for capital and foreign direct investment.

2.   Work more closely with the private sector on joint investment and long term growth and productivity

3.   Ensure that Place-making is at the heart of development

4.   Promote Greater community involvement and responsibility for shaping localities, including allocation of budgets.

5.   Help ensure that there is Greater participation in local democracy.

 

 

In essence - what we want to see happen is for decisions to be made locally – for communities to decide on issues affecting them, which can deliver greater efficiencies, reduce duplications and generate better outcomes.

 

This is not to say that we are not aware of the need for national grant support to equalise variable local tax bases; variable costs of providing services; and variable patterns of need and demand.

 

However, there is growing evidence that decentralising systems of government, can deliver better outcomes both economically and socially.

 

In March 2014, the Council of Europe reported that the main area of economic concern for the UK was ‘the financial resources of local authorities, their limited taxation powers and their dependence on government grants’.

 

Certainly, when you compare us to other countries we are very much the poor neighbour.

 

According to Audit Scotland, revenue directly raised locally, amounts to only 17% of local public expenditure in Scotland’s cities; while in other developed countries it is three times that of our own. In Germany, for example, local government areas raise on average approximately half their budgets (50% not 17%) from local taxes on incomes and business profits.

 

Our cities have the potential to deliver so much more but ...

 

... and this really isn’t a Party-political point – it’s a democratic-point - the nature of our systems of government mean we are currently unable to realise our full potential.

 

And worryingly we are currently seeing our competitor city regions in England move to a more decentralised model --- and, as mentioned,  there is much evidence to demonstrate that more decentralised systems of government are associated with higher national growth. 

Finally Euan - what of the Future City?

 

Well – I hope I’ve provided some evidence … and at least some serious food for thought … that no matter how economically successful; a city the size of Edinburgh (or Glasgow, or any Scottish City for that matter) needs a wider ‘economy of scale’ to realise not just raw economic success; but also a broader success in equalising access and opportunity for all --- or for as many as feasible.

 

And neither the public, the private, nor the voluntary sectors can achieve this alone – it needs a partnership of all those interests if we’re truly going to ensure we can cope with the imminent demands of growth in the near, if not immediate, future.

 

I’ve personally come to the very firm conclusion that in order to deliver such thriving local economies; that can also improve peoples’ lives --- cities and their regions need a bit more control of their own destiny.

 

And I think that debate is actually beginning to take some hold – here in Edinburgh; at the City Region level; and amongst the wider Scottish Cities Alliance members …

 

… as the eternal optimist, I continue to hope that the main Scottish Parties – as they approach this crucial 2016 Holyrood Campaign – do think radically about the future of our Cities and Regions.

 

If we, as a Country, are serious about building strong and smart Cities and Regions, then there really does now need to be some further devolution within Scotland.

 

How hard can that really be!

 

 

Many thanks for listening. 

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Council Budget for 2016/17 now confirmed

I've referenced this week's Council Budget Meeting in several recent blog posts - see here and here, in particular ...

... the actual Meeting was yesterday (Thursday 21st), and the approved Coalition Motion is now available via the following link:
http://www.edinburgh.gov.uk/download/meetings/id/49614/capital_coalition_budget_motion_version_2

The relevant Council News Release follows here:
http://www.edinburgh.gov.uk/news/article/2001/council_budget_focuses_on_protecting_frontline_services

And all of the Reports/Motions from the meeting are visible via this link:
http://www.edinburgh.gov.uk/meetings/meeting/3855/city_of_edinburgh_council

The webcast of the whole meeting is here:
http://www.edinburgh.public-i.tv/core/portal/webcast_interactive/206829

... my own contribution to the debate can be seen directly via this link: http://bit.ly/1Ugb5HI

As I say at the end of that contribution; I do want a clear message to go to all those - in this election year - who are standing for Holyrood ...

... the days of centralised control of local community services have to come to an end. Enough really is enough. It's time to re-empower local communities and give Local Authorities back some control over their own destiny.

Time to let go.

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Reform of Local Government funding now urgent

In my last blog-post, from earlier this morning (click here to view), I re-produced the local Labour/SNP Coalition Budget Motion ...and as previously mentioned, our local Budget will now be formally decided at the Special Full Council Meeting, at 10am on Thursday 21st January - all the relevant Reports & Papers are available via here.

I do though want to emphasise again just how serious this situation is - I have blogged before about why I've long-believed Local Government funding is broken; but I'm sadly more convinced than ever, after this year's financial settlement.

As many regular readers will be aware - I've been a Local Councillor since the very first days of devolution, being elected to the City of Edinburgh Council in May 1999 at the same time as the Scottish Parliament was established.

And, there is just no doubt that this year's local budget settlement has been the most challenging I've had to face in those near two-decades of public service.

And I think it important to stress that I post all of this, as my close colleagues well know, as someone who has only ever had an interest in Local Politics; never having had (nor never will have) any aspiration or desire to be a Holyrood or Westminster politician ... those establishments are Parliaments and they legislate - Councils deliver local services; and that's where my interest has always been, and will always remain.

So, it frankly pains me that this year's budget settlement from the Scottish Government is going to damage those local services.

And I am now more certain than ever that the system of Local Government funding in Scotland is broken.

No longer is this a minority view - the recently published 'Commission on Local Tax Reform'; jointly Chaired by a serving Scottish Government Minister, and the serving President of COSLA, concluded thus:

The present Council Tax system must end, with any replacement designed to be fairer, more progressive and locally empowering.

But this is not only about Council Tax - as the Local Tax Commission concluded - change also needs to be 'locally empowering' ...

... they recommended not just change to the main aspect of revenue raising - but also that all Local Authorities should have access to a menu (or basket) of local tax varying options - paragraph 13.15 says:

"We have identified that taxes on property, land and income are the three potential
tax mechanisms that have the revenue raising capacity to match the present system.
Broadening the local tax base could include environmental, resource, sales or tourist
taxes, as appropriate to local circumstances and local authority decisions. We see
no reason in principle why such options should not be identified, developed, and, if
found to be workable, made available to Local Government. These options would not
be anticipated as forming the main basis for local taxation, but could, in addition to the
aforementioned options, make a contribution to local revenues."

Well - this could have been enacted by the Scottish Parliament at any time since May 1999 - Local Government finance is totally devolved - but all 4 devolution-Governments have failed to act.

It simply cannot be sustainable that Scottish Local Authorities have control over only 18% of their revenue-raising, whilst most other similar levels of local government in western Europe or northern America have control of circa 40%.

Frankly - devolution from Westminster to Holyrood is all well-and-good ... but we urgently now need further fiscal devolution from Holyrood to Scotland's 32 Local Authorities.

The Scottish Government needs to let go ...

... isn't that, put simply, what they want Westminster to do?

The status quo is just no longer acceptable - an 18th year of stasis on this issue will start damaging local services irreversibly.

The system of Local Government funding in Scotland is broken - it needs to be reformed; and that reform now needs to happen urgently.

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2016/17 Budget proposals

As indicated on Tuesday, we're publishing this morning - a week prior to actual Budget Day - the full and final draft of our revised budget proposals for 2016/17.

You can read about the record-levels of public feedback, which we received to the consultation on our draft proposals, in this earlier blog-post and the links therein.

The actual Reports for the Budget debate are now all available on-line via here, along with the Coalition Motion.

I think the motion speaks for itself ... and it will now be debated at the Budget Day Council Meeting, 10am on Thursday 21st January, to be webcast here.

There's just no doubt that, for the whole 17-years I've been a local Councillor, this is the most challenging budget we've ever had to set ... my own words, and those of the Council's Deputy Leader, made after receiving confirmation of the financial settlement, remain entirely valid:


Council Leader, Andrew Burns, said: “A reduction in revenue funding of the scale now being proposed, will undoubtedly have a negative impact on a whole range of vital services that local government is responsible for delivering: the children in our care, the elderly struggling with dementia whom we look after, and vulnerable adults whom we assist daily; all these individuals rely on the support that only a council can provide.

Council Deputy Leader, Sandy Howat, added: “A revenue cut of this scale would be very damaging for jobs and services within Scottish local government generally, and here in Edinburgh specifically – the harsh reality is that this will translate to real job cuts that hit real families, in real communities throughout our capital city. Everyone will be hurt by this.


I'll now replicate the 'main text' of our final draft motion for 2016/17 below (along with the two Appendices, which follow paragraph 5):


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MOTION by the CAPITAL COALITION
 
Revenue Budget 2016/17, Capital Investment Framework 2016-2024,
Housing Revenue Account 2016-2021 and Budget Framework 2016-2020

1.	Introduction
1.1	Last year’s Capital Coalition budget was set in the context of continuing financial constraint and rising demand for Council services.  In 2016/17, we know that there will be even more challenges. As the UK Conservative Government Spending Review was delayed until 25 November 2015, the Scottish Government’s Draft Budget was consequently later than usual.  The Capital Coalition has sought to set a four-year budget framework to enable us to target services at the areas of greatest need and to provide stability to staff and citizens over future service provision.  However, because of the UK Government’s cut in the Scottish Block Grant, the Government’s Financial Settlement sets out expenditure plans only for 2016/17.  Consequently the City of Edinburgh Council, whilst setting out a four-year budget framework, is only able to agree the finalised budgetary detail for 2016/17.  For following years of the framework we will need confirmation of future UK and Scottish Government financial settlements. We have taken account of the Scottish Government’s commitment to continuing the council tax freeze.  Along with its funding for health and police, which taken with the decision by Westminster to remove the National Insurance rebate and additional teachers superannuation costs, means that local government funding overall will reduce by around 7% in real terms in 2016/17. The Commission on Local Tax Reform reported in December on the back of which the Scottish Government announced that they would publish their plans to reform local taxation in the New Year.   Health and Social Care continues to demand greater resource.  Education and care for children remains a priority.  We do not intend to cut services however, what we do want to see is efficient and effective ways of delivering them.  This is exactly what the Capital Coalition has implemented through the transformation programme – greater efficiency and effectiveness.  With Scottish Government spending priorities focusing around health, schools and police we as a Council have tried to prioritise areas of spend where we know the citizens of Edinburgh want us to invest.
1.2	Despite the challenging financial situation, the Capital Coalition has prioritised a programme of specific investment over the last 12 months based on our six strategic themes: highlights of this work are listed in more detail in Appendix 1. But the biggest change of all has been the transformation of this organisation, which employs over 18,000 staff and provides a wide range of services, each one touching the lives of many citizens.  Appendix 2 also illustrates the wide-range of efficiencies that the Capital Coalition has developed, within the context of an extremely challenging financial environment.
1.3	The UK economic environment is improving and increasing employment is helping to offset spending pressures.   Edinburgh’s economy continues to do well although the climate for local government funding is becoming even more challenging.  The pressure of a further £16.7million reduction in our overall budget, in addition to £68.7million already assumed, has led to the Capital Coalition reviewing savings proposals while protecting key services and outcomes.
	The projected challenge we face is to make budget savings of £85.4million for 2016/17 and at least £147million over the period to 2020.  The Financial Settlement increases the savings requirement in 2016/17 by £16.7million.  These additional savings will be made by: ·         Removing the additional £5.9million demography money included within the Council’s budget for social care given the £250million increase provided by Scottish Government to Health and Social Care partnerships; ·         Accelerating savings of £3.1million through the transformation programme, bringing savings forward from 2017/18; ·         A revision to the additional Health and Social Care framework investment, recognising the current year’s monitoring position providing £3million; ·         Amending the level of required provision for pay awards given planned staff reductions providing £0.9m; ·         Using £3.3million of the budget ‘headroom’ to close the funding gap with the remaining sum of £2.5million being used to support council priorities; ·         Saving an additional £0.5million to be funded from reduction in energy consumption and ·         Agreeing that any remaining gap to be funded by an increase of 4% in charges. Other activity includes: ·         Working with partners to improve infrastructure such as roads, parks, cycleways and pavements so we can all get around the city; ·         Designing services to meet growing demand from vulnerable older people and rising school rolls; ·         Analysing the City’s future transport requirements; ·         Funding changes to both National Insurance and Teachers pensions which requires £10million and £1.3million respectively in 2016/17; ·         Reducing energy consumption by 10% in 2016/17 to deal with rising costs and carbon taxes; ·         Alleviating fuel poverty by working in partnership to deliver an energy plan for the city  in 2016/17 and ·         Continuously monitoring our debt and investment portfolios to ensure we are operating effectively and efficiently and that any savings in interest payments are fed back into services.
1.4	Outcome of the consultation In line with previous years, the Capital Coalition has given the people of Edinburgh the opportunity to have their say in the budget process.  The consultation was launched on 1 October and once again Edinburgh’s citizens have risen to the challenge with over 4,000 responses.  The quality of information received has been extremely high and allowed us to refine our proposals.
	As a direct result of the consultation we have: ·         Removed the draft proposal to reduce street crossing patrols; ·         Reinstated the night noise team; ·         Removed the draft proposal to reduce the size of in-house home care service; ·         Concluded that the redesign of day care services for adults with learning disabilities should not proceed; ·         Removed the proposal for a reduction in community centre staff; ·         Agreed to continue to  provide music tuition in schools in 2016/17; ·         Amended the proposal to review support staff in special schools, ensuring maintenance of both staff numbers and service delivery; ·         Removed the £0.5million proposal to review family and pupil support; ·         Invested £15.069million in roads, pavements and cycleways to continue to make it easier for people to get around the city; ·         Funded the Cycling, Walking, Safer Street Initiative to a level of £540,000; ·         Allocated 9% of both the net capital expenditure and the net revenue expenditure of the Transport Division of the Council to cycling and ·         Listened to the comments coming out of the ‘Invest to Save’ exercise and as a result limited the council rent increase to 2% in 2016/17. As a Capital Coalition we have also decided to: ·         Increase the funding available to invest in our property estate by £3million; ·         Invest in a new state-of-the-art CCTV system; ·         Realign and revise our strategy on income maximisation to generate £1million of additional funds in 2016/17 and ·         Work with partners to ensure that the Council receives appropriate remuneration from its portfolio of companies including increased dividend payments.
1.5	None of these decisions have been taken lightly.  We do, however, continue to take forward the six strands which form our Contract with the Capital and into that we have woven the Council’s transformation programme – these proposals are all contained within Appendix 2.
1.6	Capital Additional capital expenditure of £13million was approved last year for 2015/16.  An estimated £3.95million will be available over the period of the capital investment programme  This budget will focus on delivering in 2016/17: ·    £15.069million on roads and pavements; ·    £9.8million on street lighting including LED replacement programme; ·    £11.6million on the Water of Leith Flood Prevention Scheme phase 2; ·    £19.5million on National Housing Trust; ·    £30million on schools; ·    A robust business case to replace the ageing Meadowbank Sports Centre; ·    £4million on Royston care home and ·    £24million on property maintenance and asset management. Continuous monitoring of the Council’s capital programme will be undertaken to ensure projects are delivered on time and on budget. This programme will be reported through Finance and Resources Committee and referred to the Governance Risk and Best Value Committee for scrutiny.
2.0	Savings As indicated earlier, the economic environment may be improving with a growing economy and increasing employment, but the climate for local government funding is becoming even more challenging.  The pressure of a further £16.7million reduction in our overall budget, in addition to over £60million already assumed, has led to the Capital Coalition reviewing savings proposals while protecting key services and outcomes. Savings have thus been the subject of much debate over the last four months and will concentrate on: ·         Workforce Transformation; ·         Reductions in fleet; ·         Reducing sickness absence; ·         Property rationalisation; ·         Reduction in carbon tax; ·         Transformation; ·         Procurement; The total being £85.4million in 2016/17.
3.0	Risks and Challenges The Council continues to face significant challenges which are clearly defined in the Revenue Budget report 2016/17, Risks and Reserves (Appendix 7).   These will be actively managed and reported through Council/Committee.  The Council’s top 4 risks are as follows: 1.    maintenance of property infrastructure; 2.    cyber security and data privacy; 3.    integration of health care and social services and 4.    increasing service demand due to demography. It should be noted that to mitigate these risks the Council has invested £12million per annum.
4.0	Future Budget Development The Council further agrees to: ·         Prioritise and target areas of spend in order to provide the best quality services for the people of Edinburgh through funding of the localities model: ·         Continue with the implementation of the transformation programme focusing on the following areas: o   Business Support; o   Asset management; o   Customer services and o   Locality working. ·         Reduce the headcount of the organisation by using, as far as possible, the mechanisms of Voluntary Redundancy (VR) and Voluntary Severance (VS) and by doing so focus the outputs of the Council into the areas of service prioritisation; ·         Continue to work with partner agencies to co-produce, maximise outputs and deliver the highest quality integrated services; ·          Work with the Health and Social Care Integrated Joint Board to deliver improved services; ·         Use any potential underspend in Property Conservation to fund infrastructure repairs in the Council’s asset portfolio; ·         As part of the drive towards greater partnership working we instruct the Chief Executive to prepare a report for the March 2016 Finance and Resources Committee on the benefits, outcomes, management and improved transparency of various funding streams including grants, co-production and contracts for the voluntary sector; ·         Continue to investigate alternative sources of income in line with the findings of the Commission on Local Tax Reform report; ·         In 2016 close off the Property Conservation legacy issue which has caused such reputational damage to the Council; ·         Instruct the Chief Executive to allocate £100,000 to develop and maintain a Common Good Asset Register and deliver a report to the Council in June 2016 detailing progress; ·         Continue to work with Police Scotland through the agreed Service Level Agreement to ensure that we get the support we require both as Scotland’s capital city and a city of communities each with their own specific needs and instruct the Chief Executive to review the Service Level Agreement with Police Scotland annually to ensure efficient and effective delivery of service; ·         Reduce energy consumption across the Council estate by 10% in cash terms in 2016/17 and to work with partners to develop an energy reduction unit in the Council which will deliver net savings of £1million in 2016/17; ·         Work with communities, organisations and individuals to ensure greater commitment to participatory budgeting firstly at a local level then moving on to a strategic level and ·         Establish a mid-term budget review meeting of the Council which will monitor progress against the Coalition financial commitments and act as an early warning system to highlight potential risks.
5.0	Conclusions Council notes: ·         The report by the Acting Executive Director of Resources setting out the Revenue and Capital Budget framework; ·         The report by the Acting Executive Director of Resources setting out the potential Equality rights and Carbon risks associated with the Revenue Budget framework; ·         The consultation undertaken and the continuing commitment to increasing participatory budgeting in setting future budgets; ·         The continuing review of the role of the Third Sector including partnership working, grants and the mechanism for future delivery of services; ·         The impact on the Council’s estate of the implementation of the Community Empowerment (Scotland) 2015 Act and ·         The outcomes of the transformation programme and the operational function to deliver high quality, efficient and effective services within a pre-determined budget limit.
	Council approves: ·         Appendix 1 ·         Appendix 2 ·         The Revenue Budget set out in the reports, subject to the adjustments in Appendix 3 to this motion; ·         The 2016/21 Capital Budget as set out in the report by the Acting Executive Director of Resources; ·         A band ‘D’ Council Tax of £1,169; ·         The Council Tax and Rating Resolution set out in Appendix 4 to this motion; ·         The schedule of charges for Council Services as set out in Appendix 5 to this motion; ·         The prudential indicators as set out in Appendix 6 to this motion and ·         The recommendation by the Executive Director of Place to increase rents by 2% and the outline 5-year Housing Revenue Account Capital programme for 2016/2021.
Moved by		Councillor Alasdair Rankin
Seconded by		Councillor Bill Cook

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	APPENDIX 1
	Ensuring every child has the best start in life Ensuring that every child has a first-class education is one of our most important pledges.  We currently spend £234million on education and we will be increasing this funding by £1.8million a year to meet the costs of an increasing number of school pupils.  We believe that we can generate additional income by opening up our school facilities to appropriate groups and individuals. Inspectors have judged education services in Edinburgh to be good. They have commended the strong political and managerial leadership of schools, improving exam results, strong leadership of the Curriculum for Excellence and good engagement of parents and pupils. Exam results are improving every year:  ·         85% of pupils in S4 achieved 5 or more awards at Level 3, an increase of 3% since 2011; ·         93% of pupils achieved Level 3 in Literacy and Numeracy by the end of S5, an increase of 12% since 2011; ·         61% of pupils gained 1 Higher or more by the end of S6, an increase of 7% since 2011 and ·         47% of pupils gained 3 Highers or more by the end of S6, an increase of 5% since 2011. School leaver destinations have seen significant improvement year on year with the number of young people leaving school in October 2015 to a positive destination in education, employment or training at the highest it has ever been at 92.3%. In addition, the Council is investing in new accommodation for primary schools:    ·           £6million to secure the cost of land to provide a permanent solution to primary school capacity and accommodation pressures in South Edinburgh;  ·           £5.3million to provide a new gym and dining hall, ten new class spaces and a new 3G pitch at Kirkliston Primary School; ·           £3million to provide new halls at Cramond and East Craigs and extensions at Sciennes and Towerbank; ·           £4.1million to provide replacement gym and nursery facilities at Leith Primary School and make the remainder of the existing Duncan Place building secure and ·           £0.6million to provide a new gym hall at Buckstone Primary School. The wave 3 school replacement programme involves total investment of around £128million: ·           £32million for a new Boroughmuir High School; ·           £38million for a new James Gillespie’s High; ·           £38million for a new Portobello High School including £1million to deliver a new park on part of the existing site; ·           An estimated £12million for a new St John’s RC Primary School and ·     An estimated £8million for a new St Crispin’s Special School. In addition: ·      The Council has approved funding of £11million towards the estimated total cost of £30million to replace Queensferry High School and ·      The Council has approved £0.7million towards the early design fees for a new secondary school in Craigmillar with delivery of a new facility within a 5 year programme.
	Reducing poverty, inequality and deprivation We continue to provide assistance to people who find themselves in difficult circumstances.  Through the Emergency Fund we have retained our pledge to ensure that no-one is evicted from their Council tenancy through rent arrears due to the Under Occupancy Tax. Our commitment to developing the economy and helping people back to work will enable individuals to train for the types of jobs which will support both them and the wider city region economy. By working with the Third Sector we will grant aid projects to develop community hubs which will have additional funding of £250,000 to allow them to meet local needs.  This additional funding to come from the Department of Place through budget realignment. We have protected services for vulnerable children by: ·         maintaining strong child protection services which are judged by the Care Inspectorate as being amongst the strongest in Scotland; keeping high levels of investment in services for looked after children and children with additional support needs/ disabilities; implementing self-directed support to give greater choice to families affected by disability; increasing our number of foster carers and kinship carers; increasing allowances to kinship carers;  expanding family group decision-making and maintaining investment in voluntary sector provision to support children so they don't need to come into care. The quality of our residential children's homes is consistently judged to be very good and we are rebuilding two homes over the coming years.
	Providing for Edinburgh’s economic growth The Edinburgh Guarantee is a vision that all sectors in the city will work together to ensure that every young person in Edinburgh will leave school with the choice of a job, training or further education opportunity available to them. The Modern Apprenticeships are a key part of the Edinburgh Guarantee.  To date the Council has supported 210 apprentices. Last year 39 apprentices graduated and this year that number has risen to 54.  The Council also has 78 apprentices who are still working towards completing their apprenticeships. To date, Economic Development Service (EDS) has assisted around 3,190 people into work and learning. In 2015, EDS has supported the creation and safeguarding of 2,952 jobs.
	Investment The Edinburgh 12 has demonstrated that the value of the Council’s collaborative working with the development community.  Considerable progress has been made in advancing all 12 sites. Projected economic outputs are: ·           Approximately 1,822 residential units ·           Gross Value Added (GVA) of approximately £2billion; ·           Up to 19,021 FTE jobs and 6,777 construction jobs; ·           Approximately 2,074 hotel bedrooms; ·           Approximately 128,400 sq ft of Grade A office space and ·           Approximately 120,400 sq ft of retail and leisure space. Examples of achievements to date as a result of this partnership working include: ·           Edinburgh St James - partnership working between the Council, Scottish Government, developer and investors resulted in the creation of the Growth Accelerator Model (GAM). The value of the works funded via the GAM will be £61.4million; ·           New Waverley - collaboration between the Council and developer has resulted in a fund of £200,000 being made available for physical improvements to the site and surrounding area, which will benefit residents, businesses and visitors; ·           The Haymarket Edinburgh - the Council has facilitated high-level discussions between the developer and Network Rail, which have enabled progression of this build and ·           King’s Stables Road and India Buildings are progressing well and will release significant capital receipts.
	Small Medium Enterprise (SME) opportunities Creative Exchange Leith provides 80 workspaces for individuals, groups or businesses and is a hub for creative talent in the city. Business Gateway also supports SMEs and offers access to free business support services, gives assistance and impartial advice to people starting or growing their business.
	Creative Industries and SMEs The official opening of the Edinburgh-Shenzhen Creative Industries Incubator in Shenzhen, China took place in May 2015.  The opening was attended by 10 Edinburgh Companies and six of them are planning to occupy space within the incubator.
	City Region The Council is working in partnership with neighbouring authorities (East Lothian, Fife, Midlothian, Scottish Borders, and West Lothian Councils) and other partners on the development of a City Region Deal bid to the Westminster and Scottish Governments. This City Deal aims to accelerate regional economic growth and reduce inequalities, by securing additional investment and decision-making powers from the United Kingdom and Scottish Governments to stimulate private sector investment, drive innovation, unlock synergies, and deliver the improvements to our regional infrastructure and skills base necessary to achieve a step change in economic performance. An outline bid was submitted to the Westminster and Scottish Governments on 4th September 2015, with further information provided on 18th December 2015, and we are now awaiting a formal response so the proposition can be taken to the next stage of development and any budgetary implications for the Council quantified. On award of a City Deal in 2016/17 further detailed work will be undertaken to provide a financial strategy to support the project.
	Strengthening and supporting our communities and keeping them safe The budget motion of 2014 identified £1million capital to upgrade the current Public Space analogue CCTV system to a new digital platform.  The CCTV Investment Project Manager is working with the Council’s new ICT partners CGI to produce an Outline Business Specification, which will set out the proposed options for upgrading the system.  The development of an open protocol operating system will allow integration of other Council CCTV services to provide a single more efficient service; This integrated model will also include our partners who currently have access to and usage of the system from their respective locations – Lothian Buses, Police Scotland, Scottish Fire and Rescue Service and Urban Traffic Control.  Consideration will also be given to working more closely with other CCTV providers, such as tram and business improvement districts. The high cost of privately renting or owning a home in Edinburgh is increasing the cost of living for many families on low to middle incomes already struggling to cope.  This is why the HRA budget sets out the Capital Coalition’s ambitious plans to tackle the city’s housing crisis by expanding the Council led house building programme to build 8,000 new affordable homes over 10 years.  This investment will generate benefits to the local and national economy of around £2billion, sustain 1500 new jobs and bring in additional council tax revenue at a time when the council’s resources are severely constrained. Discussions have taken place with not-for-profit Housing Associations who have agreed to match the council’s commitment bringing the total number of new affordable homes in the city up to 16,000 over 10 years.  Existing council tenants are among the most hard pressed financially and we have consulted widely with them in preparing this budget.  The consultation showed that increased house building was the top priority for tenants, followed by investment to reduce their energy costs through replacement heating, cheaper energy and better advice services.
	The strategy will also look at other measures that will have a big impact on tenants cost of living, including cheaper broadband, discount cards and making land available to support tenants to grow fruit and vegetables. All this will be achieved through a combination of making the housing service leaner; making efficiencies in service delivery and through modest rent increases of 2%, ensuring that we keep rents affordable, whilst delivering tenants priorities to reduce their cost of living.
	Ensuring Edinburgh and its residents are well cared for ·           The Shared Repairs Service enters a new phase of its development following a successful pilot scheme in 2015.  Phase 2 of the Shared Repairs roll-out commences in April 2016; ·           The Castle Crags day care and respite service for people with autism and a learning disability is now operational and is the first of its kind in Scotland, offering 20 day support service places and overnight accommodation for six people; ·           The Council working with its partner organisations opened the Milestone residential unit for people with alcohol related brain damage (ARBD); ·           The Firrhill Technology Hub has developed an innovative approach to help disabled people maximise their independence by using mobile computing devices; ·           The Royston care home for older people will open by June 2016, offering state of the art facilities from 60 beds and able to look after residents whose higher levels of need mean many other Edinburgh care homes are unsuitable; ·           Use the integration of Health and Social Care and the establishment of the Integrated Joint Board to deliver effective services at a lower cost; ·           Improve services for people with complex needs through the “Inclusive Edinburgh” review, many of whom may struggle with homelessness, unemployment, drug and alcohol problems, mental or physical ill-health, and who are often the victims of violence and ·           Tackle domestic abuse though a range of process improvements across all relevant agencies to ensure services intervene early, engage with all family members, coordinate provision and deliver better outcomes.
	Maintaining and enhancing the quality of life in Edinburgh The changing face of libraries is reflected in the wide range of services on offer.  The Capital Coalition continues to support the services which our libraries provide and whilst a review of library buildings will take place, the service will continue to develop along the lines of the projects which are highlighted below: ·        VIP – award winning service for visually impaired people; ·        GET online: BYOD (bring your own device) digital training in 6 neighbourhood libraries and other community settings and ·        YouthTalk: award winning youth engagement partnership project.  YouthTalk provides opportunities for young people to have a say and involvement in the delivery and development of local services.
	Investment and importance of festivals to the city Edinburgh is the world’s leading festival city, attracting over 4 million visits to the capital each year which delivered an economic impact of £170million for Edinburgh and £260million for Scotland.  Edinburgh’s festivals are a unique cultural phenomenon and only the Olympics and football World Cup exceed the number of tickets sold in the capital each year.  Including Hogmanay, the Council invests £4.3million in 11 of the 12 annual festivals which results in the creation of 5242 full-time jobs in Edinburgh and contributes £170million to the Edinburgh economy. Sports infrastructure improvements: ·      Meadowbank Sports Centre is the biggest sport infrastructure project being progressed by the Council at present. The latest report, indicates a total cost of £41.1million.  The Capital Coalition will consider the funding package for this project on the basis that Sportscotland contributes at least £7million; ·     A new cycling hub at Hunters’ Hall Park continues to make good progress with the Council investing £1.2million.  Once complete, facilities at the new cycling hub will include an outdoor velodrome, cycle speedway track and bmx track as well as two 3G pitches; ·      The National Performance Centre for Sport at Heriot-Watt University’s Riccarton campus is making excellent progress and is scheduled to be completed in 2016.  The new venue will include an indoor full-size 3G pitch with spectator seating, outdoor grass and 3G pitches as well as an indoor sports hall, gym and sports science facilities. The total project cost is over £30million with the Council investing £2.7million in partnership funding and ·      After many years in development we are now moving toward opening up the Council’s sports assets to the wider community with the management of many facilities transferring to Edinburgh Leisure.  Edinburgh Leisure is developing a detailed business plan on this transfer and a progress report including a timeline for a phased changeover is scheduled for Spring 2016.    ------

APPENDIX 2

Despite the challenging financial situation, the Capital Coalition has prioritised a programme of specific investment over the last 12 months based on our six strategic themes: highlights of this work are listed below:

·         Expanded the council-led house building programme started in 2008, to 22 sites in the city building nearly 3,000 homes and making it one of the largest house builders in the country;

·         Signed a 7-year £185million ICT contract with CGI to improve services across the board from payments to schools access;

·         Delivered a balanced budget in 2014/15 in spite of huge additional pressures such as the growth in demand for adult social care with a balanced budget projected for 2015/16;

·         Commenced construction on new high schools at Portobello, James Gillespie’s, and Boroughmuir, a new special school - St Crispin’s and  St John’s new Primary School;

·         Developed a transformation programme which is targeted at delivering at least £73million in annual savings by 2019/20;

·         Developed a successful Service Level Agreement with Police Scotland which is delivering localised police services where people want them, in the heart of the community;

·         Worked with Edinburgh Trams to ensure that the Tram service exceeds patronage and revenue targets;

·         Put in place a mechanism to improve our generation of income through new and innovative sources with a target of £1million set for 2016/17;

·         Discussed with the Scottish Government issues following publication  of the  Commission on Local Tax Reform report;

·         Established the Health and Social Care Integrated Joint Board for better, more efficient delivery of health and social care services;

·         Moved towards a substantial resolution of the complex legacy issues surrounding the Property Care and Property Conservation services and initiated the new Shared Repairs Service;

·         Established a register for the City’s Common Good assets in order that they be monitored and protected;

·         Continued to support economic growth;

·         Improved employment levels especially among school leavers and those seeking employment;

·         Developed a culture of promoting sustainability and published a Sustainable Energy Action Plan;

·         Proposed a detailed implementation plan for the re-structuring of Asset Management including facilities management, estate rationalisation, the Council’s investment portfolio and asset conditions report and

·         Started work on a further new care home; 

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