PAPER C

 

SCRUTINY ENQUIRY SCOPING DOCUMENT

 

RESPONSIBLE BODY

 

SCRUTINY COMMITTEE

 

ENQUIRY NAME

 

BUDGET PROCESS

 

REFERENCE NUMBER

 

SC/04/05

OUTLINE OF ENQUIRY

 

To investigate the budget process.

 

REASON FOR ENQUIRY

 

To investigate whether the budget process is sufficiently focussed and timely in terms of member, officer and stakeholder involvement in order to deliver the best possible budget for the statutory services the authority must provide, and the discretionary services it chooses to provide.

 

PROPOSED OUTCOME/S

 

Recommendations for a budget process which:

 

  1. Assists in delivering a balanced budget sufficient to provide required services.
  2. Engages all stakeholders in a timely manner to ensure all necessary information is fed into the budget making process.

 

TERMS OF REFERENCE

 

Information, evidence and advice from:

 

·         Cllr Jilly Wood

·         Paul Wilkinson

·         Voluntary sector organisations in receipt of council grants

 

About:

 

·         Timing of requests for and receipt of financial information.

·         The budget process in general.

·         Current methods of consultation.

 

What will not be included:

 

·         Capital budget process

 

RELEVANT CORPORATE AND/OR COMMUNITY STRATEGY/IES

 

Corporate Plan

 

TBC

 

Community strategy:

 

 

KEY STAKEHOLDERS

 

Cllr Jilly Wood

Paul Wilkinson

 

 

LEAD MEMBER

 

Cllr Roger Mazillius

 

OFFICER INVOLVEMENT

 

Lead Link Officer:

 

Paul Wilkinson

 

Overview and Scrutiny Team:

 

April West – Lead

Paul Thistlewood

 

 

 

OTHER RESOURCES REQUIRED

 

Specialist advice from council officers.

 

 

DATE OF INITIATION

 

18 June 2005

 

PROPOSED DATE OF COMPLETION

 

TBC

 


 

SCRUTINY COMMITTEE – 18 JULY 2005

 

BUDGET PROCESS

 

REPORT OF THE CHIEF FINANCIAL OFFICER

 

1                     There are numerous uncertainties surrounding the grant settlement for next year, and the situation will not be clarified until December. Nevertheless, it would be prudent to assume that savings of over £9 millions will be required to deliver the Council’s year one priorities. This will be three to four times greater than the typical savings achieved each year over the last decade, and is comparable proportionately with the budget reductions made on creation of the Unitary Council in 1995, but without the same opportunities for economies of scale.

2                     Given the scale of the changes needed it will be more important than ever to ensure that the budget process is robust enough to deliver the requirement, and timely enough to allow full participation of stakeholders through a meaningful consultation framework.

3                     There will need to be a number of parallel processes underway. The efficiency agenda will play a major role, both at service and corporate levels, as will prioritisation and, equally importantly, identification of non-priorities. Crude pro-rata savings targets should be avoided as far as possible, but are probably inevitable.

4                     The appendix to this report sets out further suggestions about each of the budget ‘strands’, including consultation where appropriate. There will also be a separate presentation from Policy Unit staff responsible for drawing up the consultation arrangements with outside parties.

5                     The issues identified here will be considered by Cabinet Members and Directors during the latter part of July, with a view to agreeing a firm timetable to commence shortly thereafter. This would be an ideal forum to receive any Scrutiny recommendations.

Contact:          Paul Wilkinson, Chief Financial Officer ( 823606    [email protected]

 

Paul Wilkinson

Chief Financial Officer

Item: Service efficiency savings

Background:

As part of the service planning framework, all service heads are required to identify efficiency savings, along with benchmarking and unit cost information to demonstrate their level of efficiency. No specific targets for cashable efficiency savings have been issued at this stage, but will be when performance data is available.

Key Dates:

Sept – Service plans completed, with efficiency savings and performance data

Sept – Additional cashable efficiency targets issued as appropriate

Consultation:

No service impact, so staff are only stakeholders to consult.

Progress reports to Cabinet.

 

Item: Corporate efficiency savings

Background:

As well as service specific efficiency projects, there is a need to generate corporate or cross service initiatives which might include, for example, energy conservation, transport costs, absence management and so on.

The primary source of project identification will be Directors/Heads of Service.

Key Dates:

Aug. – Directors identify cross cutting initiatives, select lead officer for each

Consultation:

No service impact, so staff are only stakeholders to consult.

Progress reports to Cabinet.

 

Item: Efficiency gains – process re-engineering

Background: The partnering agenda is intended to deliver service effectiveness improvements over the medium term, particularly within central support functions, but will initially involve costs rather than savings.

In order to generate efficiency gains which will benefit the 2006-07 budget, address service areas not within the scope of partnering for the time being, and ensure that efficiency gains from in-scope functions accrue in the first instance to the Council, expressions of interest have been invited from consultants specialising in this field. 

Key Dates:

June – expressions of interest invited

July – responses evaluated, specification refined

Aug. – one or more projects commissioned

Consultation:

No service impact, so staff are only stakeholders to consult.

Progress reports to Cabinet.

 

Item: Prioritisation – bids for additional resources

Background:

The service planning process will produce bids for extra resources to further Council priorities, and also to manage key risks to the delivery of those priorities. These then need to be prioritised from a corporate perspective.

Key Dates:

Sept – Bids identified from service planning process

Oct. – Directors and Service Heads recommend prioritised list to Cabinet

Dec. – Provisional grant settlement known, affordable top priorities incorporated in draft budget.

Consultation:

Scrutiny Committee need an opportunity to comment on chosen and rejected bids.

 

Item: Prioritisation – non-priorities

Background:

Whilst it would be preferable to make all savings through efficiencies, the scale of the requirement is too high to be achieved in one year. A political ‘zero-based’ exercise is required to identify functions which do not match the Council’s priorities or which do not make a value for money contribution to those priorities.

Key Dates:

Aug. to Nov. – Member group supported by Directors/Heads of Service conduct function level base budget review of all services except schools, and compile options for service cessation in priority order. Those services where early notice of reductions is most important, e.g. those involving the voluntary sector, will be dealt with first.

Consultation:

Because this initiative will affect service levels, it is important that early consultation takes place with users, providers, staff and members on potential service reductions.

 

Item: Pro-rata savings

Background:

Given the scale of reductions required, it is likely that further pro-rata budget cuts will be required. The scale of these should be apparent by late September (leaving aside the grant uncertainties), which allows two to three months to identify them.

Key Dates:

Sept. – pro-rata savings targets quantified and allocated

Dec. – Service heads report proposals

Consultation:

These savings may include service reductions and increased charges as well as additional efficiency savings, and as such will require consultation with users, providers, staff, members and other stakeholders.