Friday, February 06, 2015

2015/16 Budget proposals

As indicated yesterday, we're publishing this morning - a week prior to actual Budget Day - the full and final draft of our revised budget proposals for 2015/16.

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 here, along with the Coalition Motion including all the background figures - here!

And I'll now simply replicate the 'main text' of our final draft motion for 2015/16 below.

I think the motion speaks for itself ... and it will now be debated at the Budget Day Council Meeting, 10am on Thursday 12th February, to be webcast here.



Report Title: - Revenue Budget 2015/16, Capital Investment Framework 2015/20, Housing Revenue Account 2015/16 and Financial Strategy 2015/18


There is little doubt that these are extremely challenging times for Councils and their partners with growing service demand and reducing resources.  Due to changes in grant distribution to Councils, Edinburgh’s grant allocation in 2015/16 is £13 million lower than in the current year, despite additional demography funding of £10m included within the budget.  It is clear that we, as a Council, need to focus on what the people of Edinburgh want us to deliver and with this in mind have embarked on the widest consultation on financial matters that has ever been undertaken.  We asked and people responded in their thousands:

        1,719 responses to the online planner; 
        129 submitted budget leaflets;
        782 telephone calls, emails and letters;
        457 social media comments;
        31 group activities with stakeholders and staff;
        Plus an additional 289 signatories to submitted petitions;
        30 articles in print and broadcast media.

And we listened…..

As a direct result of this year’s consultation we have now agreed to amend our budget proposals by:

·           Maintaining funding for commissioned homelessness services;
·           Continuing to collect winter garden waste;
·           Working with Edinburgh Leisure to ensure sports facilities remain open;
·           Limiting the rent increase for 2015/16 to inflation – the lowest rent increase for over a decade;
·           Reviewing Licence costs to ensure that local communities are not deterred from holding events;
·           Not increasing allotment charges in line with the proposals which were put out to consultation, however there will be talks with allotment holders and FEDEGA over the coming months to discuss ways of increasing income and reducing costs across the Council’s estate.  The Council will begin these negotiations from 31 March 2015;
·           Agreeing to implement savings of £300,000 for 2015/16 as part of a review of the closure of public toilets.  There will be ongoing discussions with Lothian Buses and potential partners around the development of a community toilet scheme whereby sports facilities and businesses will open their toilets up to members of the public;
·           Reviewing taxicards.  In an effort to improve equalities and mobility for people who rely on this service we will review the operation of the taxicard service.  The proposal is to implement a charge of £20 over 3 years to cover administration charges.   The benefits of this revised scheme will be to offer unrestricted travel with a 20-25% discount on fares to cardholders;
·           Developing an energy services company (ESCO) in order to mitigate the impacts of fuel poverty, improve efficiencies and reduce carbon emissions.  We will therefore, seek to secure £150,000 of Government/Scottish Enterprise funding, matched by £150,000 from the Council, to support the project in 2015/16;
·           Using the additional dividend of £2m from Lothian Buses to increase investment in roads and pavement repairs and to devolve more of this function to a local neighbourhood level;
·           Reducing the savings required from Children and Families Third Party Grants by £614,000 to ensure continued support for vulnerable children;
·           Ensuring that the proposed reductions in community learning development service budget will not result in the closure of any community centre.  However, community centre management committees are encouraged to explore new ways of working and to share resources to help maintain the present level of services provided by individual centres.

In spite of the financial pressures the Coalition has continued, as highlighted in our Contract with the Capital in 2012, its work to promote Edinburgh as a vibrant international city whilst protecting spending on key front line services, particularly those needed by Edinburgh’s younger, older and more vulnerable residents.  We will, as a Coalition, continue to work with communities and neighbourhoods by providing funding to empower them to prioritise works.  By allocating an additional £100,000 to each neighbourhood local people will have an even greater say in how their area can be improved.

Performance across the Council is improving, however it is getting harder to provide services with the budgets we have.  This is one of the reasons why we need transformational change.  Over the next three years we will review every service the Council provides to ensure that it is what people need.  Stresses are however, beginning to show.  Even now Health and Social Care are currently reviewing their position as they face a £4.7m budget overspend in 2014/15, while all other areas of the Council endeavour to provide fit for purpose infrastructure and respond to continuously increasing demands for services.  The Coalition is clear that Directors have a responsibility to remain within budget and with this in mind, will reinforce robust monitoring systems through the Finance and Resources Committee which will provide an early warning system for identifying any budget pressures and the opportunity to recommend subsequent actions.

For the Council, staff is its greatest resource and we will continue to work with all employees and their representatives to support them through this period of transformation and change.  We are committed to paying our employees the Living Wage with an increase to £7.85 per hour payable from 1 April 2015.  In developing this further we will undertake a pilot project in 2015, amending our procurement processes to firmly encourage companies, contracted to deliver services on our behalf, to pay their workforce a minimum of the living wage.

Despite the difficult financial background awards have been won.  Employees have been recognised for their commitment and hard work and initiatives such as the Edinburgh Guarantee continue to support the city’s hunger for skilled staff by supporting young people into work and of course, Edinburgh continues to hold its own as one of the must visit destinations on the planet.

With incremental savings required of £22 million in 2015/16, £30 million in 2016/17 and £15 million in 2017/18 we need to radically review the way in which the Council operates.  In order to do this we will reshape the Council, as set out in the ‘Organise to Deliver’ report approved by Council on 11 December 2014, to offer greater flexibility to our citizens and visitors.  We will make getting in touch with the Council easier, providing services where they are needed and working with colleagues in the third sector to ensure the best possible outcomes within a framework of best value.

As part of the change programme the following 4 projects will be delivered from April 2015:

1.         Business and Customer Services;
2.         Localities;
3.         Channel Shift/Digital and
4.         Payments to Third Sector.

Number 5 (Workforce) will be reported to Finance and Resources Committee in March 2015 and 6 (Property) shortly thereafter.  Progress will be reported, by the Director of Corporate Governance, through the Finance and Resources Committee on a monthly basis from March 2015, with updates to Policy and Strategy Committee every three months.

Whilst initial savings will accrue from 2015/16, significant returns will be seen from 2016/17 onward.  Indicatively the level of savings attributable to each workstream by 2016/17 is as follows:

·                Business and Customer Services
£5 million
·                Localities
£10 million
·                Channel shift/Digital
£1 million
·                Third Sector
£7 million
·                Workforce
March 2015
·                Property
To be finalised

There is considerable pressure on the Council to deliver the financial savings set out in each of the workstreams whilst continuing to provide high quality front-line services.

Capital budget

The Capital Coalition values the development of the city’s infrastructure and to meet that pledge has instructed capital works to the value of over £400 million (2015-2020) to be initiated to improve the lives of its citizens.  In 2015, the focus of these additional resources will be a
£13.3 million investment on school infrastructure, property, roads and pavements and the continuing work into the redevelopment of Meadowbank sports centre.

Capital Position:

  • Better Outcomes Leaner  Delivery (BOLD)  Channel Shift Infrastructure

  • Local Development Plan investment

  • Rising school rolls

  • Carriageway and footways

  • Property

At the same time, the capital programme monitoring process has been improved and now 98% of all projects are delivered on time and on budget.

The following projects have been approved for the period 2015/20:

·               New High Schools at Portobello, Boroughmuir and James Gillespie’s;
·               New St John’s Primary School and St Crispin’s Special School;
·               An extension to the gym hall at Liberton High School;
·               New gym halls at Blackhall, Cramond and East Craigs Primary Schools;
·               Water of Leith Flood Prevention Phase 2;
·               Creation of a heritage centre in Leith by purchasing Custom House through the Common Good Fund;
·               Roads and pavements improvements;
·               Development of Central Library;
·               6th New Care Home;
·               Autism Day and Respite Centre;
·               Millerhill Zero Waste Plant;
·               National Housing Trust Phase 3 to deliver 400 new affordable homes;
·               Investment of over £40m in the Children and Families estate over the next 5 years including an additional £5m for rising school rolls;
·               Feasibility work into redevelopment of Meadowbank sports centre and
·               Feasibility study into the extension of the tram line to Leith and Newhaven.  

We also have a commitment to:
  • A new high school at South Queensferry and
  • A new high school in Craigmillar as a catalyst for regeneration of the area.

The Council, working with the Scottish Government, has secured approval for a £850m investment in the St James Quarter which will lead to the redevelopment of that area of the city creating a new commercial centre with additional retail, hotels, office and residential space.


The saving for 2015/16 is £23.1 million and the focus for delivery will be through:

·           Continuous delivery of procurement savings

·           Transformational change

·           Reduction in carbon emissions and reducing fuel poverty through the Council ESCO
42% by 2020

·           Support to third sector

·           Maximising income

·           Workforce management

·           Property rationalisation and disposal strategy

·           Efficiency measures

·           Other measures

£23.1 million

Risks and Challenges

The Council continues to face significant risks and challenges which are clearly defined in the Council’s Budget 2015/16 – Risks and Reserves Report No 4.2c and include:

·            Health and Social Care Integration;
·            Rising school rolls;
·            An ageing population with more complex needs;
·            Barriers to generating income;
·            An ageing infrastructure including school buildings, care homes and sports facilities;
·            Uncertainty over future financial settlements;
·            Achievement of Transformation Programme and estimated budget savings;
·            Pay and price inflation and
·            Austerity measures imposed from Westminster government.

Future budget development

Council further agrees to:

·               Deliver savings of £67 million over the next three years by realigning the organisation and working with partner agencies to deliver the highest quality integrated services;
·               Restructure the organisation, within the framework of the Coalition’s pledges and the Organise to Deliver report agreed by Council, to ensure greater efficiency, agility and effectiveness across all services;
·               Work with Council companies to maximise returns received;
·               Review the Council’s property portfolio to release maximum benefit and bring forward a capital receipt on the sale of Atria in 2015/16;
·               Support the Strategic Investment Fund with £4.5 million;
·               Continue to support the redevelopment of Meadowbank sports centre by undertaking feasibility work and seeking to secure a funding package making best use of public and private sector support;
·               Reinforce the workstreams, agreed by the Finance and Resources Committee in November 2014, as the spine for  transformational change in 2015 and beyond;
·               Work with the Scottish Government and NHS Lothian to deliver better patient outcomes and more efficient services through the integration of Health and Social Care;
·               Reduce carbon emissions by the Scottish Government target of 42% by 2020;
·               Continuously review the implementation of the new Shared Repairs Service to ensure quality standards and financial prudence allowing citizens to assume responsibility for their own property but offering support when necessary;
·               Develop further our work with partner organisations to achieve a more cohesive approach to budgeting and to develop the role of the Checkpoint group to support this process;

·               Continue to work to reach out to those who find interaction with the Council difficult and to develop a model, involving partners, the third sector and the Scottish Government, for a more participatory budgeting approach in future years;
·               Work with the Scottish Government on effective empowerment of communities in the delivery of Council and partner services;   
·               Support community policing through the Service Level Agreement with Police Scotland at current levels but in negotiation with the organisation, seek to reduce our financial commitment from 2016/17 onwards;
·               Working with the Green Investment Bank and others to provide revenue neutral funding in cash terms for projects including the replacement of street lighting following the successful contract with SALIX completed this financial year;
·               Commit capital funding of £3m plus £2m of additional Lothian Buses dividend to improve the city’s roads and pavements infrastructure;
·               Allocate an additional £5m of capital to support rising school rolls;
·               Reinstate Christmas trees and lights for local communities;
·               Maximise savings across the council from the introduction of a robust management controlled purchase order system and where possible use this funding to offset transformational costs;
·               Work with Health and Social Care to ensure that the challenges which the department faces from demography and increasing needs are managed within the level of allocated resources identified in the framework of the 2015/16 revenue budget;
·               Allocate £2.9m from the ICT efficiency fund to meet BOLD implementation costs and
·               Commit £2m from Spend to Save Fund to meet upfront capital costs relating to the Channel Shift business case.


Council notes:

·               The report by the Director of Corporate Governance setting out the Revenue and Capital Budget Framework 2015/18;
·               The report by the Director of Corporate Governance setting out the potential equality and rights and carbon risks associated with the Revenue Budget Framework and the mitigating actions to be progressed.  Where significant mitigation measures are required, or further work needs to be undertaken to meet equalities and rights requirements, the results should be reported back to the appropriate Committee;
·               The appendix to the report by the Director of Corporate Governance detailing the consultation undertaken on the 2015/16 revenue budget and the continuing commitment to further increase engagement and communication in setting future budgets;
·               The review of the role of third sector funding and the mechanism agreed to continue to improve work in that area;
·               The work undertaken to restructure the organisation as laid out in the report to the Council detailing the Organise to Deliver programme and its implementation and
·               The delivery of the six strategic workstreams by the Director of Corporate Governance, highlighted in the report to the Finance and Resources Committee in November 2014, will result in a more efficient and effective organisation allowing both the continuing delivery of services where they are most needed and the fulfilment of the Capital Coalition’s pledges made to the people of Edinburgh in 2012.

Council therefore approves:

  • The Revenue Budget 2015/16 set out in the reports, subject to the adjustments in Annex 1 to this motion;
  • A band ‘D’ Council Tax of £1,169 for 2015/16;
  • The Council Tax and Rating resolution set out in annex 2 to this motion;
  • The 2015/20 Capital Investment Programme as set out in the report by the Director of Corporate Governance subject to the additions set out in Annex 3 to this motion;
  • The Charging Policy and schedule of charges for Council services as set out in Annex 4 to this motion;
  • The prudential indicators as set out in Annex 5 to this motion and
  • The recommendation by the Acting Director of Services for Communities for a rent increase of 2% in 2015/16 and the outline 5 year Housing Revenue Account Capital programme for 2015/20.

Moved by
[Councillor] Alasdair Rankin
Seconded by
 [Councillor]Bill Cook

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