Draft Financial Plan 2020 - 2024
Total Page:16
File Type:pdf, Size:1020Kb
DRAFT FINANCIAL PLAN 2020 - 2024 CONTENTS LEADER’S FOREWORD ........................................................................................................................ 1 CHAPTER 1: POLICY CONTEXT .......................................................................................................... 3 CHAPTER 2: FINANCIAL STRATEGY ................................................................................................. 12 CHAPTER 3: REVENUE BUDGET ...................................................................................................... 23 CHAPTER 4: SCHOOLS’ BUDGETS ................................................................................................... 49 CHAPTER 5: HOUSING REVENUE ACCOUNT (HRA) ....................................................................... 53 CHAPTER 6: COMMONWEALTH GAMES .......................................................................................... 59 CHAPTER 7: CAPITAL STRATEGY AND PROGRAMME ................................................................... 64 CHAPTER 8: SECTION 25 REPORT – ROBUSTNESS OF ESTIMATES .......................................... 73 CHAPTER 9: SECTION 25 REPORT – ASSESSMENT OF RESERVES ........................................... 82 APPENDIX A: LONG TERM FINANCIAL PLAN ................................................................................... 86 APPENDIX B: GRANTS ........................................................................................................................ 87 APPENDIX C: RESERVES POLICY .................................................................................................... 94 APPENDIX D: OTHER EARMARKED RESERVES ........................................................................... 101 APPENDIX E: BUDGET RISK ............................................................................................................ 102 APPENDIX F: PRESSURES............................................................................................................... 107 APPENDIX G: SAVINGS .................................................................................................................... 118 APPENDIX H: COUNCIL TAX ............................................................................................................ 144 APPENDIX I: RESPONSE TO CONSULTATION............................................................................... 145 APPENDIX J: CAPITAL RECEIPT FLEXIBILITY ............................................................................... 174 APPENDIX K: REVENUE BUDGET ................................................................................................... 175 APPENDIX L: HRA BUSINESS PLAN ................................................................................................ 179 APPENDIX M: CAPITAL POLICIES ................................................................................................... 180 APPENDIX N: TREASURY MANAGEMENT STRATEGY ................................................................. 183 APPENDIX O: TREASURY MANAGEMENT POLICY ....................................................................... 193 APPENDIX P: SERVICE & COMMERCIAL INVESTMENT STRATEGY ........................................... 203 APPENDIX Q: CAPITAL RESOURCES ............................................................................................. 211 APPENDIX R: CAPITAL PROGRAMME ............................................................................................ 214 APPENDIX S: TEN YEAR SUMMARY CAPITAL PROGRAMME ...................................................... 218 APPENDIX T: DEBT REPAYMENT POLICY ..................................................................................... 220 APPENDIX U: PRUDENTIAL INDICATORS ...................................................................................... 225 APPENDIX V: PAY POLICY STATEMENT ........................................................................................ 230 APPENDIX W: FEES AND CHARGES ............................................................................................... 244 LEADER’S FOREWORD This document sets out the Financial Plan for the Council for the 2020/21 financial year, outlining the vision and priorities that will inform future decisions and spending. I make no apology for repeating the fact that ten years after Government cuts to public spending began, this continues to be the most challenging period in Birmingham City Council's history. We've had to make savings of around £728m to 2019/20 across vital services to support the people of Birmingham since 2010 and it remains to be seen whether the new Government's Fair Funding review will lead to even deeper future cuts here in Birmingham. Over the period of austerity, demand for many services (especially adult social care) has grown and inevitably that has meant tougher budget decisions than ever before. In November 2019, we launched our latest Budget Consultation, setting out how we aim to meet the current and future financial challenges by redesigning services to better meet the needs of Birmingham citizens. We have listened and allocated resources to the top priorities identified from this consultation. Our aim is to transform and modernise services in response to changing demand from a growing population. And we will focus resources on six key priorities: 1. Birmingham - an entrepreneurial city to learn, work and invest in. 2. Birmingham - an aspirational city to grow up in. 3. Birmingham - a fulfilling city to age well in. 4. Birmingham - a great city to live in. 5. Birmingham residents gaining the maximum benefit from hosting the Commonwealth Games. 6. Birmingham - a city that takes a leading role in tackling climate change. The sixth priority was added to the Council Plan in June 2019 when the Council declared a climate emergency and we will continue to work with our partners to make Birmingham a city in which all of our residents, including those from our most deprived communities, can lead healthy, safe and fulfilling lives. Starting with the introduction of the Clean Air Zone this summer, we will take decisive action in response to the climate emergency. Where 2019 was a year of pledges, the decade now underway will be a time for action as we adapt to changing circumstances. Birmingham will become a cleaner, greener and healthier place to live and work. We will seize the new opportunities to power our economy, because even in challenging times, Birmingham is a resilient and ambitious city. We continue to attract record levels of investment and projects like the Metro extension, Curzon, Birmingham Smithfield and the Commonwealth Games are just a few of the reasons why developers and investors from around the world are heading to this city. 1 We will make this investment work for the people of Birmingham, building more homes and creating more jobs in a golden decade for the city. Preparations for the 2022 Commonwealth Games are gathering pace and, in addition to the major redevelopment of Perry Barr, we will ensure that the benefits of hosting such a major global event are felt by as many people, in as many neighbourhoods, as possible. This is our chance to shine and I have no doubt that we show the world what the people of Birmingham can do. There are many reasons for optimism in Birmingham – but we know that the impacts of austerity are still being felt in communities and neighbourhoods right across the city. This continues to be a city of challenges. So, this Financial Plan sets out how we will meet those challenges, improving and modernising services as we tackle inequalities to protect the most vulnerable in our city. I would like to thank everyone who responded to the consultation and, as you will see from the programme outlined in this document, your feedback helped shape our plans for the 2020/21 financial year. Together we’re building a better Birmingham. 2 CHAPTER 1: POLICY CONTEXT Birmingham – a city of great opportunities but big challenges Our Financial Plan is based firmly on the context in which the Council is operating – national policies and funding, the pressures impacting on our various services, our partnership working and the Council’s own priorities and objectives. Birmingham is one of the fastest growing economies in the UK, the local economy grew by £1.2bn (4.0%) between 2017 and 2018, outperforming the growth achieved in London (2.0%) and the UK as a whole (1.4%) 1 The city has a strong and diverse business sector and is becoming a hub for advanced manufacturing, financial services and technology; it’s also the most entrepreneurial city outside London. Our strong business base, combined with the concentration of world-class universities, means the city is well-placed to harness the future economic opportunities around creative industries, digital, automation and decarbonisation. The Council continues, alongside key partners, to support a significant programme of private and public sector investment, mostly from beyond the Council’s own budgets. Significant projects include the Smithfield development and the Curzon Investment Plan and major infrastructure schemes such as HS2 and the Midland Metro Tram extensions. Both schemes are already attracting both private investors and new businesses to the region with Birmingham a key focal point. We continue to work collaboratively with our geographic neighbours through the West Midlands Combined Authority. A devolution white paper and the anticipated 2020 Spending Review