Agenda item

Money Plan 2020-25 & Budget Proposals 2020/21

To consider the report of the Cabinet Member for Performance and Resources which sets out the draft Money Plan for the period 2020 to 2025 and Budget Proposals for 2020 to 2021.


The format for the session will be as follows:


1. Leader of the Council will introduce the report.

2. The Cabinet Member for Performance and Resources will add his comments on the report.


Each Cabinet Member will then present their respective portfolios in the following order (as set out in Appendix 5):


 1. Cabinet Member for Regeneration and Economy.

 2. Cabinet Member for Performance and Resources.

 3. Cabinet Member for Culture and Leisure.

 4. Cabinet Member for Environment.

 5. Cabinet Member for Communities and Neighbourhoods.

 6. Cabinet Member for Housing and Planning Strategy.



During their presentations the Cabinet Members will address the following points: -


1.Current staffing levels

2. Financial pressures for next year, including any potential reduction   in income streams.

3. The proposed budget savings in their area for next year and how these   will impact on the services they provide.

4. Any new income streams identified during the process.

5. The main priorities for their portfolio and whether any have changed as a result of the Draft Money Plan


5.1      The Chair invited the Leader of the Council, Councillor Cook, and the      and the Deputy Leader, Cabinet Member for Performance and Resources, Councillor Hannah Norman, to address the Committee.


5.2        Councillor Cook provided an overview of the draft detailed budget for 2020/21 and the longer term plans up until 2024/5. He informed the Committee that the proposals are draft and would be finalised when details of the Local Government Settlement were known in the New Year.


5.3       He stated that although savings of £170,000 had been delivered in 2019/20, there would be no proposed savings for this financial year. Moreover, difficult decisions had been taken in the past so that the Council ‘s finances are more robust both in the present and going into the future.


5.4       There was increased income as a result of new services at the Crematorium, the changed contract with Amey, enforcement income, and especially due to the benefits of the Property Investment Strategy.  The aim of this strategy was to enable the delivery of Council services, economic growth, unlocking both regeneration and housing opportunities in the City whilst also delivering income. It would provide a measure of financial independence which would enable the Council to focus on its priorities.



5.5      He stated that the budget included both revenue and the capital programme, in which the delivery of Kings Square and the continued development costs of Kings Walk had been budgeted for.



5.6      Furthermore, the transformation programme required the Council to draw on earmarked reserves during 2019/20, however it was noted that the proposed plan identifies the need to build up on these reserves to protect the Council in the future. As an example, the plan assumes a one-off use of the Business Rates reserve in 2021/22 of £1,000,000.


5.7      Councillor Cook then went on to highlight the progress made with the Council Plan. 58% of it had been completed by September 2019, with 82% expected to be completed by March 2020. This is despite the difficult financial backdrop facing the Council. He stated that ongoing prudence had enabled Cabinet to present a money plan with no further requirement for savings.


5.8      He then outlined that the imminent opening of Potters’ Place would reduce the temporary accommodation budget by up to £200,000.  This, he suggested, was evidence that the administration is focused on providing the best possible support and working hard to keep those in temporary housing need within the City. Lastly, he expressed his thanks to the Officers who were involved in the preparation and presentation of the budget.


5.9       Councillor Norman then continued to present the draft budget and the 5-year money plan. She outlined that the draft money plan sets out the Council ‘s strategic approach to the management of its finances, whilst supporting the delivery of the Council Plan. She added that local government finance continues to face a tough outlook, and second-tier authorities such as Gloucester City would be particularly affected. As such, the budget and money plan had been generated using the best assumption on future central government changes to Business baselines, New Homes Bonus, and the impact of the Fair Funding Review once it is concluded.


5.10    She explained that as the government had not completed a full spending review, a one-year settlement was provided. Long term decisions on Local Government finance would be made in the Spending review in 2020, with decisions expected to be reported in 2020. In the meantime, the budget and money plan assumed that Business Rate Baselines could be given a near full reset in 2021/22, and hence retained Business Rates were significantly reduced accordingly in 2021/22 onwards.


5.11    Councillor Norman highlighted that as part of the Chancellors’ announcement on the 4th of September 2019, council tax could only increase by 2% or £5 annually rather than the 2.99% assumed in last year’s money plan. Further, the New Homes Bonus continues to reduce following the introduction of deadweight and moving from 6 years to 4 years. As such, the plan assumed that this will continue to reduce over the life of the plan with the New Homes Bonus expected to reduce from £1.212 million in 2019/20 to £0.474 million in 2020/21.


5.12    She further explained that through the detailed financial monitoring of the Council, the administration had identified the requirement to increase the budgets in both Planning and Neighbourhoods. There was an expectation that these portfolios would meet the budgets moving forward.


5.13    On the topic of the General Fund Balance, she explained that the money plan ensures that this stays above £1.4 million by the end of the plan. Lastly, she reiterated the Leader of the Council ‘s comments outlining that the expected financial benefits of the Property Investment Strategy meant that there were no forecast savings required at present.  She emphasised that although they were presenting a balanced budget with no required savings, it was important to note that there would be significant challenges over the life the plan both through pressures from Government, and challenging income targets to be met. Consequently, any benefit from the Property Investment Strategy should be prudently managed to help safeguard the future needs of the Council.

5.14    Councillor Norman concluded by thanking the Officers within the finance team for their hard work in generating the draft budget and the work to come prior to Budget Council in February 2020.


5.15    Councillor Haigh then opened the discussion. She asked for further clarification on earmarked reserves. Councillor Norman explained that reserve monies are put into reserves until there is a need for the funds.  For examples it was proposed that £500,000 would be transferred for use towards the Kings Square project. The Head of Policy and Resources further explained that as an example, salary costs could be offset into Community Building Reserves.


5.16    Councillor Wilson observed that it was useful having an additional column in the tables which showed last year ‘s figures. He then echoed Councillor Norman ‘s remarks that this was a difficult time for second-tier authorities such as Gloucester City Council. Moreover, he was doubtful whether the Council would receive any more money in the Local Government Settlement and suggested that the figure which the Council currently received could even reduce. Finally, he queried why the Business Rates Retention had gone up to £5,000,000. In response, Councillor Norman stated that this figure was pending transactions in property management and would be discussed in more detail at future meetings.



5.17    Councillor Stephens commented that the budget may change following the results of the Budget Consultation which was due to be published before Christmas. Moreover, he noted that the budget did not make provision of the proposed minimum charge for Council Tax. Councillor Norman noted that indeed no provisions had been made for the minimum charges for Council Tax.



Environment Portfolio



5.18    Councillor Cook advised that current staff levels within his portfolio were 42 (Full Time Equivalents) FTE with 3 posts vacant.



5.19    He advised that monitoring had highlighted a pressure for the contract inflation in the Council ‘s contract with Amey. He added that this pressure had been addressed in the draft money Plan.


5.20    He noted that there were no additional savings targets within his portfolio.


5.21    Councillor Cook stated that the recent negotiations with Amey had resulted in expected growth in the recyclate income, and that this had been reflected in the draft money plan.

5.22    Further, he informed the Committee that an income stream of £40,000 from the Crematorium had been identified in the draft money plan. This was the result of new services which were due to be introduced which would improve flexibility and the offering available.


5.23   Finally, he explained that all the income streams within his portfolio continued to meet targets, including discretionary services such as bulky waste collection.


5.24   Councillor Cook advised that as announced at the last Council meeting, a resolution with Amey had been agreed, regarding the recent dispute.


          The basis of the resolution was as follows:


a.)  Minor changes to the way Residents were asked to sort and present their recycling


b.)   A commitment from Amey for effective kerbside sorting, depot handling and onward sales


c.)  New contracts that guarantee a floor price and offer the current market process for all recyclates that meet threshold standards



5.25     Councillor Stephens queried whether the 2% pay award increase forecasted also applied to Amey. The Head of Policy and Resources responded to say that the indexation for the Amey contract would be higher than 2%.


5.26     Councillor Haigh asked whether the Council would be affected by the Waste Transfer Scheme. Councillor Cook believed that it should not apply as the current scheme run at Hempsted Recycling Centre and the Incinerator was already similar to this.



Performance and Resources Portfolio



5.27    Councillor Norman advised that current staff levels within her portfolio were 52.2 FTE with 2 posts vacant.


5.28    She stated that there were no specific budget pressures within her portfolio.


5.29     She noted that there were no proposed savings within her portfolio.


5.30    Councillor Norman informed the Committee that there were no new income streams in her portfolio. However, she noted that there was a small saving within Policy & Resources. This was a result of the required posts approved at budget last year and the full allocation not being required.


5.31    Finally, she explained that she did not anticipate any changes to her portfolio as a result of the budget proposals for 2021/22.


5.32   She added that the priorities in Performance and Resources were based more specifically around the ‘Core Principle’ which is, to support the broader priorities. Namely, to strive for value for money and only spending what the Council can afford. Lastly, a key portfolio within the portfolio for 2020/21 and subsequent years would be delivering the transformation programme, both processes and digital.  Thus far, this had supported the successful move from the warehouses to Shire Hall and helped to ensure that customers receive excellent services.

5.33   Councillor Pullen questioned what would be done with the savings from the Policy and Resources posts which had not been allocated. Councillor Norman advised that the savings would be used towards Community Grants.

Culture and Leisure Portfolio



5.34   Councillor Morgan advised that current staff levels within his portfolio were 29.5  FTE and 2.3 vacant posts.


5.35    He stated that the Culture and Leisure budget had been adjusted to take into account realistic change.  Moreover, it was noted that the portfolio was operating to target. He outlined some of the highlights within his portfolio. First, the decision to remove entrance fees at the Museum had increased footfall.  Secondly, the income from specific exhibits had also brought some benefits.  Councillor Morgan then highlighted some of the future proposals. It was suggested that Southgate Car Park could see some changes in the future. Further, there were proposals to use some of the Culture and Leisure budget towards the Museums.


5.36    He explained that there were no proposed budget savings for 2020/21.


5.37    Councillor Morgan then moved onto the priorities in the Culture and Leisure Portfolio. Here, he explained that putting culture at the heart of Gloucester remained a main priority. The aim was for Gloucester to be known for its distinctive culture. More specifically the following were also key priorities:


-       A revamped Guildhall Cinema


-       A great festivals events calendar


-       Developing a great works plan


-       Should colleagues reconsider making a City of Culture bid, preparations would be made toward this


5.38    Councillor Haigh queried why there were no figures in the Budget for 2020/21 for the Visitor Experience Team. The Head of Policy and Resources explained that the budgets had been tidied up and if any costs were incurred this would be shown in the forecasts.


5.39    Councillor Pullen asked if the Head of Policy and Resources could explain the decreases in the Culture and Leisure budget, and particularly why the forecasted budget income showed a decrease. In response, the Head of Policy and Resources stated that this was because the budget had been tidied up across the whole portfolio, and the figures also took into account inflation.


5.40    On the topic of the Guildhall, Councillor Morgan stated that the aim was to keep costs there as low as possible and also how the services offered could be improved. Furthermore, Cabinet would work alongside the new Head of Culture and look at how income they could improve income at the Guildhall.


Regeneration and Economy Portfolio


5.41    Councillor James advised that current staffing levels within his portfolio were 22.6 FTE with 2 vacancies.


5.42    He outlined that there were no specific budget pressures for 2020/21 within his portfolio.


5.43    Furthermore, there were no proposed budget savings within Regeneration and Economy.


5.44    On the subject of new income streams within the portfolio, he explained that the Council had put in place the Property Investment Strategy in July 2017. Since that time, several opportunities had been reviewed that aligned with the strategy in delivering core council services while looking for economic growth, regeneration and releasing potential housing opportunities.


5.45     He added that the draft Money Plan includes a £945,000 income stream as these decisions were expected to be finalised prior to the start of 2020/21.  At present, this was still subject to commercial and contractual confidentiality, but once completed, further information would be made available.


5.46    In addition, he explained that the draft plan also includes a short-term   growth in car parking income at Bruton Way.  This would be following the demolition, and then prior to the subsequent redevelopment of the site as part of the Kings Quarter redevelopment.  As part of the development the site would be utilised as surface car parking in the short term.  Lastly, the plan included both the management fee and the proposed income from this site.


5.47    Councillor James then outlined the following priorities for the Regeneration and Economy portfolio:


-       Kings Square


-       Kings Walk - capital budget


-       Kings Quarter- planning consent & moving towards work starting on the site


-       The Fleece - progress deal with Dowdeswell and work up detailed solution


-       Herbert, Kimberley and Phillpotts Warehouses - deciding on which bid to accept and move forward with it


-       Asset managing new acquisitions – protecting and enhancing income


-       Markets service – implementing new arrangements following procurement


5.48   Councillor Haigh pointed out that the income table on page 36 of the addendum appeared to be missing the Arbor within the figures. The Head of Policy explained that this would be updated to include this.


Communities and Neighbourhoods Portfolio



5.49    Councillor Watkins advised that current staffing levels within the Communities and Neighbourhoods portfolio were 31.8 FTE with 2.8 vacancies.


5.50    She then explained that there were no major pressures identified within the portfolio for next year.


           Moreover, financial pressures around homelessness and particularly temporary accommodation were being reduced as a result of progress being made within Housing Services in areas such as working and private landlords, the B&B task force, greater efficiency around decision

           making, and the Council support in the Potter Place investment.


5.51    Furthermore, she stated that the Council was forecast to spend its entire Discretionary Housing Payments (DHP) budget this year which had assisted more people to remain in their home or find a new home. This had the added benefit of reducing the costs which would have been incurred had they been processed as homelessness cases.


5.52   Similarly, new opportunities were being explored to improve access to temporary, supported and permanent accommodation through repurposing existing properties and land in the City. This would allow the Council to have greater control over where people are placed, to avoid placing people outside the County which could be more costly and detrimental to the wellbeing of those households. Finally, she stated that it was important that the Council is able to adapt and respond to funding opportunities which were emerging from the Government around housing and homelessness. The result of which is that the Council would be able to positively reduce the amount which has been historically spent on temporary accommodation.


5.53   The Head of Policy and Resources added that whilst the Council had historically overspent on homelessness, however they would be reducing expenditure in this area.


5.54   Councillor Watkins outlined that there we no specific savings targets within the Communities and Neighbourhoods portfolio for 2020/21.


5.55    She stated that there were no new income streams included within the budget or her portfolio.


5.56   Finally, she outlined the following priorities for the portfolio:


-       Reducing expenditure on temporary accommodation and thus reducing expenditure

-       Process redesign in Housing to maximise capacity and improve interactions with the Customer

-       Continued improvement of performance in Housing thus continuing the positive trend see so far

-       Continuing the good work of ActionGlos in reducing rough sleeping (own to 6 from 25 last year)

-        New housing supply (in partnership with RPs and VCS) to reduce numbers of people in B&BS

-       Continue to invest and support (in partnership with others) community building across the City

-       Maintain Purple Flag

-       Developing further the work of Nightsafe, Daysafe and the SSGP

-       To explore further the work of social enterprise and other community aspirations including a discussion and plan with Gloucestershire County Council on community buildings such as Parry Hall


5.57    Councillor Haigh questioned where the funding for new premises for Community Builders would be coming from. The Head of Policy and Resources explained that the premises would be co-hosted with Partners, and that Gloucester City Council ‘s contribution for this would come from the Community Interest Company (CIC) budget.




Planning and Housing Strategy Portfolio


5.57    Councillor Gravells advised that current staffing levels in his portfolio were 17.7 FTE with 1 vacancy.


5.58    He outlined that the pre-submission of the City Plan had now been approved by the Council and following the 6-week statutory consultation period, it would be submitted to the Planning Inspectorate Service with an Examination in Public expected in 2020/21.  Thus, the 2020/21 budget would have an overall increase of £172.000, £60,000 as a contribution to the core costs of the JCS and £100,000 for the City Plan Examination in Public. This estimate was based on Cheltenham City Council ‘s Examination in Public.


 5.59   He explained that as highlighted in the Quarter 2 budget monitoring report planning income in 2019/20 was less than previously forecast. The 2020/21 Money Plan reflected future planning income forecasts and had been reduced by £160,000. Furthermore, a potential for Planning Performance Agreement Income of £35,000 had been identified.



5.60    Councillor Gravells advised that there were no savings specifically identified for the Planning and Housing Strategy Portfolio for the following year.


5.61     In relation to new income streams, he outlined that the planning service had successfully negotiated the first Planning Performance Agreement (PPA) during 2018/19 in the sum of £25,000. A further PPA for Kings Quarter had also been agreed with the potential for smaller number of additional PPAs during 2020/21 and beyond. He added that whilst this income could not be relied upon to fund core staff costs, it was essential in increasing capacity and busy times.


5.62    Finally, he outlined the following priorities for the portfolio:


-       Adoption of the City Plan particularly the 25% requirement for affordable homes

-       Working with Gloucester City Homes and the communities of Matson and Podsmead to identify priority regeneration opportunities that meet the aims and objectives of the recently adopted Supplementary Planning Documents

-       Issues and Options relating to the review of the Joint Core Strategy

-       Ongoing process redesign of the planning service as part of the Together Gloucester 2 programme


Receipt of major planning applications including:


-       HKP Warehouses in Q3

-       Wessex House in Q3

-       St Oswalds (housing development) in Q3

-       Further development of shared working arrangements with Tewkesbury BC

-       Review the current and proposed governance arrangements for the JCS and countywide strategic planning issues

-       Continuing to work with architects, planning agents, developers, officers and Members to drive up the design quality of new developments in the City

-       Continuing to work with housing associations to increase affordable housing opportunities


5.63    Councillor Stephens queried why there was no provision in the 2020/21 budget for housing strategy. It was explained that the housing strategy was still a work in progress.


5.64     Councillor Haigh suggested that the portfolio was an ambitious one. She then asked Councillor Gravells whether there would be money available if it was needed in order to develop partnerships/investments.Councillor Gravells advised that he could not make commitments and could only take into account the 5-year plan.  Moreover, whilst the portfolio and targets could be considered ambitious, the portfolio had been created in a way that responds to local demands.


5.65    The Chair thanked the Leader of the Council and Cabinet Members for their presentations.

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