strategic finance presentation to chief executives 9 may 2012 sue mcgonigal chief executive (thanet...
TRANSCRIPT
![Page 1: Strategic Finance Presentation to Chief Executives 9 May 2012 Sue McGonigal Chief Executive (Thanet District Council) Julie Gibbs Assistant Director –](https://reader036.vdocuments.site/reader036/viewer/2022062516/56649e405503460f94b3251d/html5/thumbnails/1.jpg)
Strategic Finance
Presentation to Chief Executives 9 May 2012
Sue McGonigalChief Executive (Thanet District Council)
Julie Gibbs Assistant Director – Finance (Gravesham Borough Council)
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Key Aim
“Develop a medium term financial strategy that will make Kent more
resilient to loss of RSG and promote more efficiency through joined up approaches to service planning,
commissioning and delivery”
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Or in other words...
How can we work together more effectively and improve overall
financial planning
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Scoping Actions
• Review Current Financial Practices• Total Place View of Financial Pressures/Savings• Innovative Solutions• Asset Review and Rationalisation• Income Generation• Shared Services• Alternative Delivery• Decommissioning Services
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Context
Mid-2010 Population Gross Spend Income Net Spend
Ashford 115.5 £90.2m £77.9m £12.3m
Canterbury 153.2 £99.0m £79.7m £19.3m
Dartford 94.6 £46.8m £41.7m £5.1m
Dover 106.9 £68.2m £54.0m £14.2m
Gravesham 99.6 £78.7m £67.4m £11.3m
Maidstone 149.8 £92.8m £72.8m £20.0m
Sevenoaks 114.1 £51.0m £37.2m £13.8m
Shepway 101.2 £99.2m £79.5m £19.7m
Swale 133.4 £73.2m £57.4m £15.8m
Thanet 132.2 £153.3m £133.2m £20.1m
Tonbridge and Malling 118.8 £70.9m £56.9m £14.0m
Tunbridge Wells 108.2 £67.0m £55.0m £12m
Kent County Council 1427.5 £2,177.2m £1,272.9m £904.3m
Kent Police Authority 1427.5 £317.6m £42.9m £274.7m
Kent & Medway Fire & Rescue Authority 1427.5 £79.7m £7.5m £72.2m
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Medium Term Financial Planning
• Most Councils 3,4 or 5 year
• Sevenoaks 10 year
• Govt Settlement– Supposedly 3 year, but no news on 2013/14– Next CSR early...next summer?
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MTFP Assumptions
Formula Grant - 0% to real terms reductions
Council Tax - no increase over MTFP...how realistic?
Tax base - historic growth 0.7% to 1%...trend is slowing?
Pay award -1%p.a. for 2013/14 & 2014/15 per Govt policy
New Homes Bonus - growth in line with tax base but varied assumptions around its use
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Financial Resilience
Substantial balances and reserves held across Kent – £136m in general balances (inc £52m schools)
– £235m in earmarked reserves
Approach to balances – 2% of Gross Revenue Expenditure – 2% to 10% Net Revenue Expenditure – Typically for districts £1.25m to £2m
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New Homes Bonus
2011/12 £6.9m Kent£7.9m K&M
2012/13 £14.2m Kent £16.5m K&M
Variable use– base budget contribution– taken to balances– used to fund specific initiatives
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Putting on the Pressure
All authorities face similar issues:
• Increasing spending demands– Inflation– Demography– Central Government demands increasing
• Reducing income– Govt grants – Reduced demand for fee raising services– Increasing arrears & bad debts
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More for less....a lot less
• Formula Grant Reduction – £72m (Kent) £84m (K&M) for 2011/12– £47m (Kent) £54m (K&M) for 2012/13
• Forecast Reductions– £30m for 2013/14– £50m for 2014/15– £50m for 2015/16
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Wholesale changes to funding....both how and what
• Localising Support for Council Tax
• Retention of National Domestic Rates
• Universal Credit
• Cuts in Administrative Grant for Housing Benefit / Council Tax Benefit
• Greater flexibility to raise taxes locally– CIL, TIF, s106
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‘Local’ choices
Potential changes to Council Tax:
• Discounts
£1m disallowed on Second Homes
• Exemptions
£10m excluded on 6 month empty
£1.3m excluded on 12 month empty
£0.5m excluded on repossession
• Single Person Discount £65M
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Finding solutions
• Review
• Generate
• Share
• Co-operate
• Reduce
• Stop
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The need to innovate
How can authorities help each other?
• Greater collaboration on areas of common interest e.g. preceptors contribute to improving Council Tax collection
• Partnership sharing of risks e.g. Local Authority Mortgage Scheme
• Remove duplication e.g. financial assessment of social care clients
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Asset Review and Rationalisation
• Gains already made...– Gateways– Swale deep dive– Co-located Multi Agency Teams – ICT systems
• Plenty of opportunities still out there...– Adult Ed centres used approx 17% of the time– Fire retained stations?
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Income Generation
• Generate new income streams–Review charging for discretionary services–Maximisation of Government Grants–Sponsorship
• Maximise recovery levels–Examination of level of write-offs –Fixed penalty notices, parking notices etc
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Savings
• Short to Medium term– Staffing structures– Opportunistic cuts to discretionary spend– Few service cuts – Outsourcing– Service transformation
• Longer term– Focus on reducing demand – Re-set & manage expectations
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Alternative Delivery Models
Alternative models:• Joint Ventures• Trusts• Community groups • Collaborative
agreements• Shared services
Benefits:• Tax efficiencies• Access to grants• Private sector partners• Cultural differences• Equal footings• Community
engagement
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Shared Services
• What is being shared
• Who are the partners
• What is working
• What isn’t working
• What is saving money
...but at what cost?
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Strategic collaboration
• Joint procurement
• Pooling of resources– common infrastructure– Joint initiatives
• Reducing cross-authority competition
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Decommissioning Services
• Few examples and many reversed– CCTV– What others?
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Way Forward
• Drill down into “specific” areas to feedback to Joint Kent Chiefs
• What involvement the Kent Forum?
• Produce a simple and regular “Kent Financial Statement”?