DRAFT, 20th May, 2004
Appealing against the capping of Nottingham's budget.
1. OUR DRIVE FOR IMPROVEMENT
• The City Council is committed to providing the best possible services for the people of Nottingham
• We are one year in to a programme of transformational change and improvement – Gearing Up.
• We have already moved from ‘weak’ to ‘fair’ in the CPA, based on dramatic progress in our benefits service and improved use of resources
• Nottingham is ranked as the best performing transport authority in the Country by the Government.
• The Audit Commission support our comprehensive approach to sustained improvement and the need to invest in change management:
“The Council has paid significant attention to the recommendations from the 2002 Corporate Assessment and begun to lay the foundations for sustainable improvement
“The commitment this time is clear, but will need to be sustained and supported by appropriate resources”
(Audit Commission Annual Letter, December 2003)
2. OUR SHARED PRIORITIES
· Our agenda is the same as the Government’s, investing in our City, our Neighbourhoods and in quality services.
· Our priorities are supported by the public
Ø Tackling anti social behaviour and crime
Ø Cleaner streets
Ø Improving schools
Ø Modernising social care
Ø Redeveloping Leisure provision
· Government Ministers have supported our approach:
Ø On Anti Social Behaviour
“I commend Nottingham for taking that action - well done”
Caroline Flint, Home Office Junior Minister
“I’m delighted that Nottingham City is taking such an active role”
Hazel Blears, Minister of State (Crime Reductioin, Policing and Community Safety)
Ø On Street Cleaning and Respect of Nottingham
“It is very much the right approach … the City Council is determined to clean up the area”.
Alun Michael, Minister of State (Environment, Food and Rural Affairs)
Ø On City Development
“You’ve done some beautiful things down in Nottingham … Cities like Nottingham are making huge strides forward”.
John Prescott, Deputy Prime Minister
Ø On Educational Development and Ofsted Inspection
“I am particularly pleased … good planning … clear focus … and decisive action by the Council bodes well for the future”
David Miliband, Schools Minister
Ø On Housing Benefits Service improvements
“Your authority has made excellent progress. I should like to congratulate you”.
Chris Pond, Junior Minister, Department of Works and Pensions
3. BUDGET PRIORITIES
Our budget reflects our strategic priorities, and additional funding this year, means an extra:
· £6.5m for Education
· £1.1m for community safety
· £0.7m for extra street cleaning, graffiti removal, new park wardens
· £0.7m to support improvements in housing
· £8.6m for full passporting for Social Services and to maintain Quality Protects
· £0.7m to support Leisure Services
Education has received full passporting every year since LGR and most years additional development funding.
Community Safety and Street Services investment underpins our Respect for Nottingham initiatives.
Housing funding provides for improvements in landlord services and rent collection.
Social Care receives full passporting and money to develop and modernise services.
Leisure investment provides for a programme of improvement through closures and invest-to-save projects, following wide public consultation.
4. CONSULTATION AND ENGAGEMENT
· The Council consulted widely on its budget priorities from October through to February. We discussed our proposals with the LSP, business community and voluntary sector, and focus groups with residents.
· Our partners have confirmed their support.
· there has been no local outcry about the Council Tax increase
· We know the public’s priorities and do not want to be distracted from them
We consulted widely listening to responses provided. As well as the above, this included Pensioners’ representatives, Tenants and residents groups, staff and trade unions. We will continue to consult as we develop our Medium Term Financial Plan over this summer.
5. COMMUNITY RESPONSES
· The Council continues to receive large numbers of positive and very supportive comments on its strategic plan and other initiatives.
· Chamber of Commerce
“We are very well aware of and have supported the Council’s strategic priorities, which have been discussed at length”.
Geoffrey Hulse, Chief Executive
· Tenants Sounding Board
“The Council has put a great deal of effort over the past 18 months in trying to find out what matters to tenants and leaseholders …. I genuinely believe that we’ll now get there”.
Clive Thorpe, Chair
· Nottingham Development Enterprise
“We have always been impressed by the commitment of Nottingham City Council to work in partnership with the business community …. Nottingham City Council is one of the most dynamic and progressive in relation to …. local business”.
Neil Horsley, Chief Executive
· A selection of other responses [were presented] from Vice-Chancellors, Chief Executives and senior business figures representing:
The Greater Nottingham Transport Partnership, Royal Bank of Scotland, Greater Nottingham Partnership, Nottingham Trent University, University of Nottingham, Nottinghamshire Constabulary, Government Office for the East Midlands, Nottingham PCT and the Local Strategic Partnership.
6. GOOD USE OF RESOURCES – GOOD VALUE FOR MONEY
· CPA Use of Resources scored 4 (maximum).
· Budget process has reallocated resources to priority areas having achieved corporate savings of over £3.8m this year, together with other service savings and additional income totalling a further £4.5m.
· Council is embarking on a 4 year Medium Term Financial Plan, to direct resources with development initiatives, support change and improvement, and which relies upon at least 2% efficiency savings each year.
· Invest to save projects promoting efficiency and development
Ø Leisure centre reorganisation
Ø Schools reorganisation
Ø Closure of outdated elderly persons’ homes linked to the development of extra care facilities.
The City has a good record of financial control and processes which have led to the CPA score of a maximum 4 reflecting this achievement.
Budget savings of over £8m in total have been achieved for this year resulting in a significant shift of resources across the Council.
Our 4 year Medium Term Financial Plan is based on continuous savings of at least 2% each year, (£4m each year).
Our Leisure Centres review will be radical and include closures and redevelopment. We intend using the new prudential borrowing powers to assist this.
Schools reorganisation is part of our Schools for the Future bid (£160m) which will be used to promote and create a community focus for education and other City services following our strategic priority of neighbourhood working. Reorganisation will address the need for closures and a reduction in primary school places.
In Social Services, we have already reduced the number of outdated elderly persons’ homes, and our programme of modernisation in supporting people, rather than just supporting institutions, will accelerate.
7. BUDGET REQUIREMENT
· In the context of capping, the Minister said that he will take account of “trends over more than one year” (Hansard 19 November 03)
· Over 2 years Nottingham’s Budget Requirement is 12th lowest and less than the average Unitary Authority.
· We have set a Budget Requirement which has increased by 6.4%(after adjusting for all Formula Spending Share changes).
· The comparable figure for the previous year was 6.3%.
Nottingham’s growth in Budget Requirement after adjustment for changes in responsibility and funding adjustments has been relatively consistent over the past 3 years. Taking into account changes in Standard Spending Assessment and Formula Spending Share over the period.
Nottingham’s increase is 6.4% in 2004/05, 6.3% in 2003/04 and 5.3% in 2002/03. If Nottingham’s figure in 2004/05 is only adjusted for Fire then the increase does become 6.56% which is marginally higher than the capping criteria.
In addition to the Minister’s statement above, the original consultation on the Alternative Notional Amounts issues by OPDM on 11 December 2003 included figures relating to both 2002/03 and 2003/04 and at a meeting with SIGOMA representatives in December 2003, the intention to look at trends over more than one year was reaffirmed.
8. COUNCIL TAX
· Over the past 5 years, Nottingham’s increase has been nearly 1% less than the unitary average.
· Over six years Nottingham has had the lowest cumulative Council Tax increase in the County.
· Average Council Tax levels in Nottingham have been and continue to be the lowest in the County.
· Average Council Tax levels in Nottingham have been and continue to be less than the average of the Core Cities.
· Over the past 5 years, Nottingham’s increase has been 1% less than the national average each year.
· Nottingham’s average Council Tax of £801 in 2004/05 is the 29thlowest in the Country. Highest national figure £1,489.
Nottingham City’s element of the Council Tax prior to 2004/05 and since Local Government reorganisation has increased by 6.0%, 3.9%, 6.5% and 6.5%. This demonstrates a consistent and
prudent approach when national headline figures could be described as excessive. Charge payers in Nottingham had an 8.3% increase including Police and Fire in 2003/04 compared to a national average of 12.9%.
Average Council Tax 2004/05 High £1,489 (Richmond-upon-Thames) Average 967 Low 553 (Wandsworth)
Nottingham 801
Average (Unitary) 894
Average (East Midlands) 917
9. COUNCIL TAX INCREASE 2003/04
The Council Tax bills received by charge payers show a 4.6% increase in Council Tax charged by Nottingham City Council.This is in line with the relevant regulation (SI 2003/2613).The bill did include a footnote as per regulation (SI 2003/3081) that “The figures … are not direct comparisons because this year the combined Fire Authority has issued a precept …”.
Figures of 7.3% and 7.8% can be calculated by extrapolating from the City Council’s budget for 2003/04 and making an adjustment for the Fire on the basis of a proportion of the Budget Requirement and the passporting of FSS respectively.
The 9.6% figure is the alternative notional adjustment which was recently approved by the House of Commons. During the consultation period the ODPM, Fire Circular 7/2004 made it clear that “these notional figures should not be used to calculate Council Tax increases to be communicated to the general public.”
The 10.1% is the total increase in Nottingham after taking into account the precepts for Fire and Police. This, in line with the relevant regulations, was clearly stated on the bill.
10. IMPACT OF CAPPING DESIGNATION
· Reduction sought is £180,290
· Rebilling will cost more than £250,000
· Rebilling will affect collection rates, delay benefit entitlements, cause cash flow problems and increase court and recovery activity.
· An overall cost of over £430,000.
· However, the opportunity to address this would effectively be a 6 month period which could double the impact.
The proposed reduction of £180,290 as per ODPM letter 29 April 2004 would represent an average weekly adjustment of 3.5p per week. People in receipt of benefits could see no net reduction on their contribution. As a result it would be difficult to justify from a value for money perspective the estimated additional costs of rebilling of £250,000.
The total cost of £430,000 in 2004/05 would mean that action equating to some £860,000 in a full year would have to be achieved as the time to respond would effectively be 6 months.
It is difficult to assess the impact on individual charge payers but it is likely that the level of confusion may result in individuals not paying their current council tax bills and subsequently getting into debt.
11. PRESENTATION OF COUNCIL TAX INCREASES
· This year has been particularly complex.
· We have followed ODPM guidance in respect of billing and our press information.
· All information was provided to ODPM officials in GOEM on 23 February, before Nottingham’s final Council Tax decisions were made.
· Subsequent feedback did not indicate any problems and we remained available for further meetings/discussions as required. None were arranged by ODPM.
· Given our prudent track record and our full disclosure of information to ODPM and not being ‘called in’, we reasonably assumed our budget was not considered excessive.
Both the Guidance in relation to the use of notional amounts (ODPM Fire Circular 7/2004 and covering email) and in relation to the Council Tax bill (SI 2003/2613 and SI 2003/2613) have been followed. However, this has caused some confusion in the local press.
We requested a meeting with GOEM in mid February and met with their officers on 23 February. At this meeting all available information was discussed and hard copies presented to GOEM. This included Executive Board reports and briefing for local MPs. Further information and clarification was provided through telephone calls and email. Even at this stage local press coverage was headlining the potential increase at over 10% and the detailed comments were describing the different methodologies (press reports 18 February).
This information was presented to GOEM in good time for appropriate feedback and would have allowed appropriate adjustment. However, having received positive feedback and with a prudent track record, proposals were approved by Full Council on 8 March 2004.
12. THE WAY FORWARD
· Capping and rebilling is in no one's best interests.
· As a result the options are:
Ø Nottingham has set a reasonable budget and this is accepted, or
Ø Nottingham undertakes to reduce spending in 2004/05 by the £180,290
With the cost of rebilling estimated to be £250,000 to achieve a tangible reduction of 3.5p on the average bill and the Council having to implement changes equivalent to £860,000 in a full year, rebilling is in no one's best interests.
The budget process for 2004/05 was undertaken with consultation and a reasonable budget was agreed and set in this local context. Nottingham’s average council tax is the lowest in Nottinghamshire, is less than the average for a Core City, has grown significantly less than both the unitary average and the national average and is the 29th lowest in the Country.
[Last updated – 2004-05-20]
Comments