Last week the UNISON regional office wrote to the Chief Executive at Notts Council to ask some searching questions about the budget cuts. The text of the letter is reproduced in italics below.
UNISON have reviewed the budget proposals contained in the Cabinet report of 18 November 09 we have some questions.
Budget pressures
The 2009/10 budget report to full Council on 25 February 2009 initially identified budget pressures of £11.9m in 2010/11.
However, the 2010/11 budget report to the Cabinet on 18 November 2009 now identifies budget of pressures of £31.1m; an increase of £19.2m.
We have been able to identify that of the additional £19.2m budget pressures, £9m is from the decision to freeze Council Tax. We are puzzled as to where the additional £10.2m in budget pressures has come from in fewer than nine months.
These additional budget pressures over and above the original £11.9m identified in February budget report are not individually identified in November budget report. We believe that identifying the specific additional pressures will assist the council in producing a transparent and balanced budget.
Our question is:
1. Can the council please identify the specific individual additional budget pressures totalling £10.2m over and above the pressures in identified in the February budget report?
Use of reserves
The Statement of Accounts for 2008/09 show that the reserve called “Earmarked for Services” was at £18.4m as of 31 March 09. We believe this is what has also been referred to in other documents as “Departmental Reserves.” Our question is:
2. We understand some of these reserves are for capital projects but we would be grateful if you could confirm what level of these reserves could be used to support revenue expenditure?
On page A29 para 11.3 of the document the February budget report the table shows a projected transfer into the County Fund Balances of £3.7m.
3. Can you confirm if this £3.7m transfer is still intended as part of the 2010/11 budget? If the answer is yes, can you please explain why, given these difficult financial times, that the council has not chosen use this money to support the 2010/11 revenue budget?
We have identified from the Statement of Accounts for 2008/09 the total reserves of the council stand at £150.8m as of 31 March 09 and that the unallocated reserves, aka “County Fund Balances” stand at £24.8m. Our question is:
4. Given the above levels of reserves would you agree that it would not be unreasonable for the council to use, say, £2m a year for the next three years, from the County Fund Balances to help support the revenue budget.
Projected Outturn for 2009/10
We have reviewed the first quarter’s budget monitoring report and we believe the council is projected to under spend by £2.4m in 2009/10. Our questions are:
5. Are we correct that the first quarter’s monitoring report does indeed predict an under spend of £2.4m?
6. Do you have more up to date figures for the projected outturn for 2009/10, if so what is it?
7. Do you accept that any surplus on the 2009/10 budget that is transferred to the County Fund Balances could be used to support future revenue budgets?
We note that the projected outturn referred to above was made before the outcome of the 2009/10 NJC pay award which according to the Council will result in a further saving of £1.7m. Our question is:
8. Do you agree that the council has saved £1.7m as outlined above?
We note that the 2009/10 budget includes a £3m provision for ‘contingencies.’ Our question is:
9. What is the projected spend on this contingencies sum?
10. If it is not all spent, does the council accept some of it could be used to support the revenue budget in 2010/11?
Application of the Formula Grant
We understand there is a damping mechanism that applies to central government formula grant that means that the council currently is subject to a “ceiling” which limits the size of the grant payable to the council. We also note that damping mechanism is to be gradually phased out meaning the council should expect growth in formula grant of in excess of £15m in the coming years. However, we note the council has predicted a reduction in the formula grant. Our question is:
11. Do you agree that if the damping mechanism is gradually reduced then the council could expect a growth in formula grant of in excess of £15m in the coming years?
Impact of a Future Conservative Government
We would refer you to the policy statement below contained on page 16 in the Conservative Party document Control Shift – Returning Power to Local Communities; Conservative Party (17 February 2009) (attached):
“………That is why we have announced that, in the first two years of a Conservative government, councils will also have the ability to contract with central government to freeze council tax. Those councils that take up the contract will have to undertake to hold the rate of rise in council tax to 2.5 per cent or less; and central government will correspondingly undertake to make a payment equal to 2.5 per cent of that council’s council tax – so that bills can be frozen in each such council for the two year period.”
Our questions are:
12. Does the council agree that this additional central government grant would amount to an additional £7.5m in the budget for both 2011/12 and 2012/13?
13. Why has the council not taken into account this potential additional grant income in its financial plan for the years 2011/12 and 2012/13?
We will be advising our members that we have raised these questions with the council and we undertake to share any response from the council with them.
UNISON have reviewed the budget proposals contained in the Cabinet report of 18 November 09 we have some questions.
Budget pressures
The 2009/10 budget report to full Council on 25 February 2009 initially identified budget pressures of £11.9m in 2010/11.
However, the 2010/11 budget report to the Cabinet on 18 November 2009 now identifies budget of pressures of £31.1m; an increase of £19.2m.
We have been able to identify that of the additional £19.2m budget pressures, £9m is from the decision to freeze Council Tax. We are puzzled as to where the additional £10.2m in budget pressures has come from in fewer than nine months.
These additional budget pressures over and above the original £11.9m identified in February budget report are not individually identified in November budget report. We believe that identifying the specific additional pressures will assist the council in producing a transparent and balanced budget.
Our question is:
1. Can the council please identify the specific individual additional budget pressures totalling £10.2m over and above the pressures in identified in the February budget report?
Use of reserves
The Statement of Accounts for 2008/09 show that the reserve called “Earmarked for Services” was at £18.4m as of 31 March 09. We believe this is what has also been referred to in other documents as “Departmental Reserves.” Our question is:
2. We understand some of these reserves are for capital projects but we would be grateful if you could confirm what level of these reserves could be used to support revenue expenditure?
On page A29 para 11.3 of the document the February budget report the table shows a projected transfer into the County Fund Balances of £3.7m.
3. Can you confirm if this £3.7m transfer is still intended as part of the 2010/11 budget? If the answer is yes, can you please explain why, given these difficult financial times, that the council has not chosen use this money to support the 2010/11 revenue budget?
We have identified from the Statement of Accounts for 2008/09 the total reserves of the council stand at £150.8m as of 31 March 09 and that the unallocated reserves, aka “County Fund Balances” stand at £24.8m. Our question is:
4. Given the above levels of reserves would you agree that it would not be unreasonable for the council to use, say, £2m a year for the next three years, from the County Fund Balances to help support the revenue budget.
Projected Outturn for 2009/10
We have reviewed the first quarter’s budget monitoring report and we believe the council is projected to under spend by £2.4m in 2009/10. Our questions are:
5. Are we correct that the first quarter’s monitoring report does indeed predict an under spend of £2.4m?
6. Do you have more up to date figures for the projected outturn for 2009/10, if so what is it?
7. Do you accept that any surplus on the 2009/10 budget that is transferred to the County Fund Balances could be used to support future revenue budgets?
We note that the projected outturn referred to above was made before the outcome of the 2009/10 NJC pay award which according to the Council will result in a further saving of £1.7m. Our question is:
8. Do you agree that the council has saved £1.7m as outlined above?
We note that the 2009/10 budget includes a £3m provision for ‘contingencies.’ Our question is:
9. What is the projected spend on this contingencies sum?
10. If it is not all spent, does the council accept some of it could be used to support the revenue budget in 2010/11?
Application of the Formula Grant
We understand there is a damping mechanism that applies to central government formula grant that means that the council currently is subject to a “ceiling” which limits the size of the grant payable to the council. We also note that damping mechanism is to be gradually phased out meaning the council should expect growth in formula grant of in excess of £15m in the coming years. However, we note the council has predicted a reduction in the formula grant. Our question is:
11. Do you agree that if the damping mechanism is gradually reduced then the council could expect a growth in formula grant of in excess of £15m in the coming years?
Impact of a Future Conservative Government
We would refer you to the policy statement below contained on page 16 in the Conservative Party document Control Shift – Returning Power to Local Communities; Conservative Party (17 February 2009) (attached):
“………That is why we have announced that, in the first two years of a Conservative government, councils will also have the ability to contract with central government to freeze council tax. Those councils that take up the contract will have to undertake to hold the rate of rise in council tax to 2.5 per cent or less; and central government will correspondingly undertake to make a payment equal to 2.5 per cent of that council’s council tax – so that bills can be frozen in each such council for the two year period.”
Our questions are:
12. Does the council agree that this additional central government grant would amount to an additional £7.5m in the budget for both 2011/12 and 2012/13?
13. Why has the council not taken into account this potential additional grant income in its financial plan for the years 2011/12 and 2012/13?
We will be advising our members that we have raised these questions with the council and we undertake to share any response from the council with them.
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