Birmingham City Council approved its Business Plan and Budget 2016+ on the 1st of March. The document is 244 pages – you can find the link to it at http://www.birmingham.gov.uk/budget. Here we are publishing some 6 pages of extracts which bring together the key points. We have commented on some of them in previous posts and will continue to do so in future posts.
PART FIVE – FINANCIAL PLAN
Chapter 1: Budget Summary
Excluding those grants which are ringfenced to be spent on specific services and projects, the City Council will be subject to a cash reduction in corporate grant funding of £59.7m (13.4%) in 2016/17. After taking account of income from the local share of business rates and from Council Tax, total corporate funding will reduce by £46.5m (5.1%) in comparison with 2015/16 on a like for like basis (£39.7m in cash terms).
1.5 At the same time, there is the need to increase funding for some services by £23.7m. This includes providing further resources for child protection services (an extra £4.7m) and continuing to invest in adult social care (£10.5m), both to meet the costs of the increasing number of older people requiring care and also to address the extra costs within the care sector arising from the implementation of the Living Wage.
1.6 In addition to this, inflationary costs are estimated to be £17.4m, a net movement in corporate reserves of £17.8m offset by a reduction in corporately managed budgets of £10.3m.
1.7 Therefore, it will be necessary for further savings of £88.2m to be made in order to balance the revenue budget in 2016/17.
1.8 After taking account of medium term resource forecasts and additional future pressures, further savings of £163.0m are planned. This will enable the council to set out balanced financial plans for the years to 2019/20, including an indicative budget for 2017/18.
1.9 It is expected that total savings of £815m will have been made over the 9 year period from 2011/12 – 2019/20.
- Financial Challenge
2.1 The City Council’s financial plans have been developed to take account of the following:
The continuing reductions in Government grant funding.
Expectation of income from Council Tax and Business Rates.
Funding to meet budget pressures and the cost of investment in priority services, including changing needs in the City’s population.
Provision for increased employer’s pension costs.
Equal Pay liabilities.
Costs of redundancies.
Capital financing costs based on the capital budget, informed by interest rate expectations.
The strategic use of corporate reserves on a planned and sustainable basis.
2.2 After taking account of the above factors, savings have been planned in order to balance the budget in the medium-term. Further cumulative savings of £251m are planned over the next four years.
- Investing In Priorities and Addressing Pressures
3.1 The budget for 2016/17 includes increased budget allocations of £23.7m, both to fund investment in priority services and to address budget pressures. This figure rises to £109.7m by 2019/20.
3.2 Despite the challenging financial position, the Council is continuing to provide further resources each year for child protection services – an extra £4.7m in 2016/17, growing to £7.0m from 2017/18 onwards, in addition to the extra £24.5m per year already put in place in previous years. These resources will meet the expected increase in needs and allow for the recruitment of more social workers.
3.3 The Council will continue to invest in adult social care, both to meet the costs of the increasing number of older people requiring care (£6.6m in 2016/17, rising to £26.6m by 2019/20) and also to address the extra costs within the care sector arising from the implementation of the Living Wage. By providing additional funding of £3.9m in 2016/17, in addition to general inflationary increases, the City Council expects to be able to have funding which will allow social care providers to be able to afford an hourly rate of pay of at least £7.50 per hour. Budgetary provision is planned to increase further throughout the four years of the financial plan, allowing the Birmingham Living Wage to be affordable by 2018/19.
3.4 The City Council will utilise the Social Care Precept to contribute towards these extra costs of adult social care. This will provide additional funding of £5.5m in 2016/17, rising by similar amounts in each subsequent year to total £22.9m by 2019/20. Should the council not adopt the Social Care Precept it would impair/prevent the council’s funding of these measures.
3.5 In addition to the above investment in social care services, the City Council has also made policy decisions to fund other priorities. Full details are set out in Appendix 5 with the largest items being:
The costs of undertaking the Council’s responsibilities under the Care Act now that specific grant funding is being discontinued (£5.0m).
Further staff costs, reflecting the revised approach to salary progression under the new “My Appraisal” process (£3.2m).
£2.0m in order to set up a Community Initiative Fund, which will provide resources for locally-determined spending priorities.
Additional waste disposal costs, reflecting expected increases in the number of households in Birmingham together with the impact of changes in taxes (£0.8m rising to £1.9m).
In the coming year the Council expects to work closely with its partners in the proposed WMCA to start delivering the Devolution Deal agreed with the Government. This is estimated to bring additional capital investment in excess of £8 billion over ten years across the West Midlands and associated LEP areas. This will require new ways of delivering capital investment involving a variety of delivery mechanisms appropriate to each investment programme. (p73)
Our Workforce Savings Programme
It is a delicate balance to ensure that we have an organisation ready for the future in an environment where significant savings are required. We recognise that these challenges will have a fundamental impact on our people just when we need to be ready for a complete step change in delivery.
We will work with our people and their representatives to identify different options and approaches to address this challenging agenda.
Our people will be affected by our savings programme in the following ways as we need to:
Improve the effectiveness of our people planning to reduce costs and improve efficiency – to be implemented in 2016/17
Proposed changes include the following:
a recruitment freeze on all posts unless the role is classed as critical.
an increase in the number of apprenticeships as a way of broadening the diversity of the workforce and creating a supply of skilled workers for the city.
reduce expenditure on agency workers over the next 12 months.
develop a comprehensive internship programme to develop local talent.
review and, where appropriate, remove layers of management to ensure decision making happens closest to the citizens.
unpaid leave sabbaticals for staff.
Savings target of £10.5 – £16m.
Change to terms and conditions of employment – to be implemented in 2017/18
We need to develop a package of measures which will enable us to reduce the wage bill by circa £18m a year. The ideas so far are:
increase the standard working week from 36.5 hours a week to 37 – in line with the majority of other local authorities.
review JNC pay and reward.
amend the provision of the sickness pay scheme.
freeze the payment of performance related increments for three years.
remove subsistence allowance for those away on business.
revise the hours for night pay from 8pm – 6 am to 10pm – 6 am.
apply a single standardised standby payment scheme.
Savings target of £15-£18m.
Provide a new employee benefits package
We will create a new core offer for our people that will enable agile working, a career portfolio and is supported by the Birmingham Reward & Benefits. The purpose of these proposed changes is to ensure that we continue to attract and retain great talent by providing employees with:
Greater autonomy and agility in working practices, locations and hours of work – wherever practicable.
Opportunities to develop careers and experience within the council and with our partners.
A reward package that offers choice and options.
Core contractual offer for those moving to other providers.
These proposals could deliver a number of benefits – financial and non-financial:
enable employees to buy and sell annual leave.
reduced property costs through an increased use of ‘hot desking’.
create a new framework to facilitate greater opportunities for agile & flexible working that works for the business & our employees.
reduction in recruitment costs because of more effective succession planning and talent management.
Achieve a reduction in headcount and change ways of working
We have launched consultation on a range of proposals to change or reduce services and ways of working that could lead to a reduction of around 1,200 jobs in 2016-17.
APPENDIX 1: EQUALITIES IMPACT ANALYSIS OF SAVINGS PROPOSALS
Theme – Preventing Family Breakdown
PFB1 Resilient families
By improving our early help and social work service we propose to support more children to live safely and thrive at home. We propose doing this by providing support to our staff to work creatively with disadvantaged families to bring about positive change. Where children do have to come into care, we will provide more local foster placements and we will speed up the process of children in care finding permanent families. We will work with families openly and collaboratively, but where children need to be protected from significant harm, we will always intervene to make sure that they are protected.
PFB2 Improved processes and productivity
By supporting staff better through supervision, staff development, manageable caseloads and a learning culture we propose to reduce reliance on agency staff and manage a staff vacancy factor (turnover rate) of 4% for specific groups of staff. As the proposal develops the Council will need to let service users know if there is any more detail or information to provide to them or if it needs to consult with them further.
P22 Step up of previous Early Years savings
On 30th November 2015 a consultation including plans for a new model for delivering a more joined up Early Years offer to support parents and young children was launched. The new services are planned to be in place by 1st September 2017. The savings shown here are the increases in savings which have been built into previous consultations. These savings will be achieved through a review of services pending the wider review. Once we have got your views on the principles of how the changes set out in the Early Years Health and Wellbeing Consultation should work we may then develop more detailed proposals for services. We will hold a second period of consultation once we have these proposals to check we have heard you correctly and have the detail right. In addition to the formal consultations there will be opportunities for people to become more involved in working with us to develop the proposals
Maximising the Independence of Adults
MIA2 Design and Implement a new approach to Special Educational Needs and Disabilities and move away from a high dependency model
The Council is proposing a longterm, wide ranging development of the services to children with special educational needs. This would involve working with the children, families, and partner organisations to design and implement the optimum approach to these services shaped by the use of shared data and intelligence, learning and best practice. This may include commissioning of new services, changes to the way services are delivered, and potentially decommissioning of services. The intention would be to give children with special educational needs services which help them to prepare for adulthood so that they will have the best possible level of independence into later life Working closely with partners including social care and housing, NHS colleagues, relevant community groups, charities, schools, Department for Work and Pensions, skills organisations and businesses. Engagement and consultation with families and children with special education needs
MIA3 Promote independent travel and reduce reliance on council funded transport, underpinned by clear policy
We propose to work with families and young people to develop travel solutions that enable the child or young person to access education in the same way that members of their peer group who do not have special educational need or disability would access their education. This includes travelling independently for young people and family based travel solutions for younger children. We want to actively encourage children and young people’s Working to understand the motivations and attitudes of families, showing them where a difference is being made and supporting them through change. Collaborating closely with all our key partners, such as schools, to present a consistent, structured message and keep them up to date about our developments.
MIA5 Internal Care Services – Younger Adults Day Care
Birmingham City Council intends to reorganise its internally provided services so that people may choose to buy these or different community based services which meet their assessed needs. Birmingham City Council is committed to developing services for people that help them to live as independently as possible, exercising choice and control over the planning and delivery of the support they need. In the short term we intend to make better use of spare capacity in these services. We intend to undertake a detailed piece of work to identify which centres we propose to close. We intend to consult further once these proposals have been developed. Offering people a reassessment of their needs and working with them to plan their future support. Securing specialist support planning services to help people to develop their own support plans. Extensive consultation with staff, service users and other stakeholders.
MIA6 Homelessness : licensing and enforcement in the private rented sector
We propose to make more information and advice available online for tenants and landlords. Access to direct phone support will therefore be restricted to high priority cases in an attempt to reduce the demand for telephone and face to face support. This will help us to refer tenants seeking help to appropriate agencies or to use online material to request landlords to carry out repairs, and enable us to focus on high priority cases. The Council will still provide email and phone service but this will be for high priority cases and not for initial advice and information. The Council will ensure that information is available in key service centres such as libraries and Customer Service Centres to help tenants and landlords understand their rights and responsibilities. The Council will work with local partners such as Homestamp, to ensure there is a range of advice points available to tenants and landlords, such as the recently launched Check Before You Rent mobile application (app) from Homestamp. The Council will refresh its webpages for the Private Rented Sector and provide more material for tenants to use to take initial action on their own behalf.
MIA7 Health & Prevention
This proposal is about reducing the need and therefore the demand for long term care services. The Council will encourage the development of a number of health and prevention schemes which aim to support people to live independently for as long as possible and help reduce the long term reliance upon support from Council services. As the proposal develops the Council will need to let service users know if there is any more detail or information to provide to them or if it needs to consult with them further.
MIA8 Older Adults Offer
In line with the Care Act and new ways of thinking we need to consider our policy ‘A Fair Deal in Times of Austerity’ and its implications over the forthcoming years – for example we need to be explicit about what this means for citizens and their responsibilities. As the proposal develops the Council will need to let service users know if there is any more detail or information to provide to them or if it needs to consult with them further.
MIA17 Internal Care Review – Home Care Enablement
Exploring opportunities to work closer with our NHS partners in the development of future enablement services and to explore opportunities to deliver ‘enablement’ in different ways through different providers. Ensuring future providers have the skills and abilities to deliver better outcomes for people. Ensuring that the way in which enablement services are provided deliver better outcomes for people. Continuously monitor providers to provide assurance of quality.
MIA18 Internal Care Review – Care
The Council feels that it cannot provide residential care for older adults in the Care Centres in a way which represents value for money when compared to providers of similar services within the care market. In order to ensure that it achieves better use of the public purse it must now explore alternative options for their future operation.
Offering people a reassessment of their Centres needs and working with them to plan their future support. Commissioning alternative services from other care and support providers to meet people’s identified needs and outcomes.
MIA20 Internal Care Review – Older Adult Day Care
Birmingham City Council intends to reorganise its internally provided services so that people may choose to buy these or different community based services which meet their assessed needs. Birmingham City Council is committed to developing services for people that help them to live as independently as possible, exercising choice and control over the planning and delivery of the support they need. In the short term we intend to make better use of spare capacity in these services. We intend to undertake a detailed piece of work to identify which centres we propose to close. We intend to consult further once these proposals have been developed.
Offering people a reassessment of their needs and working with them to plan their future support. Securing specialist support planning services to help people to develop their own support plans.
MIA21 Internal Care Review – Learning Disability Short Breaks
Birmingham City Council intends to reorganise its internally provided services so that adults may choose to buy these or different community based services which meet their assessed needs. Birmingham City Council is committed to developing services for people that help them to live as independently as possible, exercising choice and control over the planning and delivery of the support they need. In the short term we intend to make better use of spare capacity in these services. We intend to undertake a detailed piece of work to identify which centres we propose to close. We intend to consult further once these proposals have been developed.
Offering people a reassessment of their needs and working with them to plan their future support. Securing specialist support planning services to help people to develop their own support plans.
P10 Reduction in Adults Running Costs
For a number of years the Council has been seeking to ensure that the administration and management of all services is as efficient as possible. This means continually reviewing spend on supplies and services, transport and premises costs and indirect employee costs. As the proposal develops the Council will need to let service users know if there is any more detail or information to provide to them or if it needs to consult with them further.
P17 Step-up of savings re: Third Sector Commissioning and Supporting People
We propose to re-commission services provided through the third sector, reduce funding for housing support services to people with physical or sensory disabilities by 50%, and commission a redesigned Supporting People ‘Disability housing support service’. Previous experience of the contract mobilisation period demonstrates that this can be a complex process and may be unsettling for service users; learning from previous experience will be called on to minimise disruption and to ensure contracts are mobilised on time.
SN43 Community Leisure Centres
We propose to renegotiate the contract to generate savings. As the proposal develops the Council will need to let impacted groups know if there is any more detail or information to provide to them or if it needs to consult with them further.