CITY AND COUNTY OF CARDIFF AGENDA ITEM 5 DINAS A SIR CAERDYDD POLICY REVIEW & PERFORMANCE SCRUTINY COMMITTEE 20 February 2013 DRAFT BUDGET PROPOSALS 2013-14 Reasons for this report 1. To provide Members with the context for the scrutiny of the 2013/14 draft budget proposals. 2. Attached to this report are a series of appendices which will aid Members in their scrutiny of the budget proposals: Appendix A – Senior Management structure chart (as at Apr 2012) Appendix B – Draft Cabinet Budget Proposal - Savings 2013/14 Appendix C – (to follow) - List of posts affected by Savings proposals Appendix D – Draft Cabinet Financial Pressures Summary 2013/14 Appendix E – Draft Cabinet Proposed Capital Programme 2013/14 - 2017/18 Appendix F – Draft Cabinet Proposed 2013/14 Budget Reductions re: Grants Appendix G – Breakdown of 2012/13 net revenue budget Appendix H – Budget Consultation 2013-14 survey Background 3. The Council’s constitution allows for all Scrutiny Committees to scrutinise the draft budget proposals prior to their consideration by Full Council. The Committee's consideration of the budget will allow Members to feed its comments or recommendations to the Cabinet when it considers the draft budget proposals on 21 st February. The proposals will then be presented to Full Council on 28 th February. 4. The Policy Review and Performance Scrutiny Committee’s remit provides for it to consider the overall budget proposals from a corporate context, in terms of how they align to the Council’s priorities and commitments. Members have been provided with a copy of the draft Corporate Plan for 2013-17 to scrutinise at Agenda Item 4. 5. This Committee also has a remit to scrutinize the budget proposals for those specific services aligned to its terms of reference, in the context of the draft Corporate Plan, which Members will find at Agenda Item 4. The 2013/14 budget proposals have been developed by the Cabinet and senior management team under the management structure currently still in place, rather than the directorate structure to which the Council is currently recruiting. Attached at Appendix A is the existing Council organisational structure to assist Members. 6. Members will therefore have an opportunity to examine the following service Budget Proposals which align with the Committees terms of reference: Corporate Management Corporate Services: Legal & Democratic Services Scrutiny, Performance & Improvement Finance Strategic Estates Commissioning & Procurement Shared Services: HR People Services Internal Services (ICT, Business Administration) Customer Services Central Transport Services and Facilities Management Communications And Equalities (part of the Communities Directorate). Issues Budget assessment process 7. Savings proposals and financial pressure proposals undergo an assessment process. In the case of the former this is a three stage process, comprising Risk Assessment, an evaluation of achievability, and an Equality Impact Assessment. Financial Pressures are assessed in terms of risk and equality impact. 8. Risk assessment is carried out in accordance with the Council Risk Management Policy, Strategy and Methodology 1. Proposals are given a ‘traffic light’ risk rating, savings in terms of the risk posed if the proposal is accepted, and financial pressures in terms of the risk posed in the proposal is not accepted. 9. Savings are also assessed in terms of their achievability, again following a traffic light system. The achievability may be affected by factors such as the source of the saving i.e. whether from cutting a post, reducing external spend or generating income. 10.The proposals are also Equality Impact Assessed. Under the Equality Act 2010, as a public authority, Cardiff Council is required to have due regard in its decision making to eliminating unlawful discrimination, harassment and victimisation and to advancing equality of opportunity. Part of this is assessing the potential equality impact of proposed changes to policies, procedures and practices. The Council does not need to carry out a full impact assessment of each individual budget proposal, but has put in place a simplified process to undertake an initial assessment of each proposal to identify which equalities groups or ‘protected characteristics’ 2 are likely to be most affected by the proposal; and quantify and qualify the seriousness of the impact. Once this has been assessed, a perceived equalities traffic light rating can be allocated to the savings or financial pressure proposal. If a differential impact is likely to occur, a fuller assessment will take place. 1 Available on the Council’s website at: http://www.cardiff.gov.uk/objview.asp?Object_ID=12879& 2 Age, disability, race, gender, pregnancy & maternity, marriage & civil partnership, language, race, religious or non-religious belief and sexual orientation Budget scrutiny process 11.All scrutiny Members were invited to participate in two budget briefing sessions by the team of the Corporate Chief Officer (Corporate Services) & Section 151 Officer, to gain an understanding of the context in which the 2013/14 budget is delivered. Members were also invited to attend additional training run by the Chartered Institute of Public Finance and Accountancy. All Members have been circulated copies of these presentations for information 12.The meetings of the other four scrutiny Committees have been scheduled for the 18 th and 19 th February 2013. The Committees will consider the sections of the draft Budget Proposals and draft Corporate Plan which are relevant to their terms of reference. Following these meetings, the Chair of each Committee will write a letter to the Cabinet summing up their Committee’s comments. Copies of these letters will be tabled at the Policy Review and Performance Scrutiny Committee meeting, if available in time, in order to allow Members an overall picture of the Committees’ comments. Budget Strategy 2013/14 13.The Budget Strategy report 3 presented to the Cabinet in July 2012 indicated a level of uncertainty regarding the Welsh Government settlement, with respect to the impact of any specific grants transferring into the settlement and the level of grant funding which may subsequently be received. It was anticipated that the Learning Disability Resettlement Grant would be brought into the Revenue Support Grant, which it subsequently has been. 14.The Budget Strategy report presented to the Cabinet in July 2012, reiterated a number of challenges facing the Council which had been identified as part of the Risk Assessment process carried out during the preparation of the 2012/13 budget. These included: The level of additional borrowing undertaken in previous years and proposed, which may require more revenue resources to be diverted for capital financing in future years; 3 Available on the Council’s website: http://www.cardiff.gov.uk/objview.asp?object_id=23288 The financial impact of the new pay and grading model once implemented; The service impact of the significant reduction in headcount expected over the medium term; The necessity to deliver net cashable savings from transforming services. 15.In the Budget Strategy report, it was predicted at that point that the Council would face an £18 million gap in 2013/14 which would need to be closed by savings and the use of reserves. As changes to the grants received by the Council could widen this gap to £21 million, service areas were asked to plan for both scenarios, proposing savings of 12.5% of their controllable budgets as well as identifying further savings to a higher level of 14.8%. Members were informed at their budget briefing sessions that following receipt of early savings proposals, further savings of £5m were requested to meet additional growth and to provide headroom for options being considered. Draft Budget Proposals 2013/14 16. To enable Members to scrutinise the 2012/13 budget proposals, the proposals for the whole Council are attached at Appendices B to F: Appendix B – Draft Cabinet Budget Proposal - Savings Appendix C – (to follow) - List of posts affected by Savings proposals Appendix D – Draft Cabinet Financial Pressures Summary 2013/14 Appendix E – Draft Cabinet Proposed Capital Programme 2013/14 - 2017/18 Appendix F – Draft Cabinet Proposed 2013/14 Budget Reductions re: Grants 17.To further help Members understand the context of the overall Council budget, a diagram is attached at Appendix G which shows the 2012/13 net revenue budget as it is allocated to service areas. 18.The Budget Proposals relating to services specific to this Committee’s remit are highlighted in colour: Yellow: Corporate Management Green : Corporate Services Blue : Shared Services There are also a small number of budget proposals which do not relate to these service areas (for example relating to the Equalities team, Corporate Grants, or to the European and International Team). These are highlighted in pale orange. Consultation Process 19.This year, the Cabinet chose to make its draft Budget Proposals available to all Members following the Full Council meeting held on 31 st January. The budget proposals have also been available on the Council’s website since that date for members of the public to view. On Tuesday 5 th February, a survey 4 went live on the Council’s website which invited comments on the draft Proposals as well as views on alternative savings which the Council could make. A copy of the survey questions is attached at Appendix H. 20.The survey sets out a number of principles which underpin the budget approach: Supporting hard-pressed families Protecting the most vulnerable in our communities Protecting vital services such as schools and social services Stimulating jobs and opportunities Ensuring that external service providers and grant recipients share the burden of cuts with the Council Making real savings through better procurement and improvements to service delivery. 21.The survey will close at midnight on Tuesday 19 th February, and the results collated will be presented to the Cabinet to inform their decision at their meeting on 21 st February 2013.