HERTFORDSHIRE COUNTY COUNCIL
POLICY & RESOURCES CABINET PANEL
THURSDAY 17 SEPTEMBER 2009 AT 3.00 PM
INTEGRATED PLANNING PROCESS
Report of the Director of Resources and Performance
Authors:-Lorraine Allen, Group Manager Financial Strategy and Planning (01992 555313)
Chris Badger, Head of Performance Improvement (01992 588314)
Executive Member:- David Lloyd
1.Purpose of the Report
1.1To inform the Panel of the proposed Integrated Planning Process for 2010/11 to 2012/13.
2.Summary
2.1This report provides an overview of the Integrated Planning Process that will be used to take forward the council’s corporate and financial planning activity and summarises the local and national context for the planning process, together with the proposed timetable.
3.Recommendation
3.1The Panel is asked to consider and note the process and timetable contained in this report.
4.Background
4.1National Context
4.1.1Over the last 18 months both UK and global economies have significantly deteriorated and the UK economy has moved into recession. The UK economy has moved from a relatively high level of inflation to lower levels and even deflation. It has also experienced falls in land and property prices, shortage of credit, lower growth and rising unemployment. The impact of this is affecting all sectors including local authorities, their residents and businesses.
4.1.22010/11 is the final year of the Government’s first three year Local Government Finance Settlement. The Formula Grant and Area Based Grant increases for future years will not be known until the next three year settlement is announced in December 2010. However, expectations are bleak with cuts in public expenditure expected.
4.1.3During the current CSR 2007 period there has been an expectation that local Government will deliver 3% cashable efficiency savings each year, while transforming service delivery and keeping council tax increase below a capping threshold of approximately 3%. The Chancellor’s budget in April 2009 has raised the expectation with regard to efficiency savings to 4%.
4.1.4 The Government continue to expect the overall increase in council tax to be substantially below 5% and will take capping action if necessary, including requiring authorities to rebill. However, the precise level at which a council would be capped in 2010/11 or future years is unclear.
4.2Local context
4.2.1Hertfordshire County Council is a “floor” authority and will receive the minimum increase of 1.5% in Formula Grant for 2010/11 (a total of £176 million), together with £63 million of Area Based Grant. The increase in grant and will fall a long way short of covering the unavoidable additional cost pressures faced by the authority.
4.2.2Significant issues impacting on Hertfordshire for the next three years include:
Increasing numbers of clients with learning disabilities
Increasing numbers of older people
Legislative requirements including increases in landfill tax
Reduced interest rates
4.2.3With regard to capital resources, government support through capital grants are likely to be constrained over the next three years. In addition, the council expects to generate minimal capital receipts this year, with no certainty as to when the market for property sales will begin to return. So, continuing to ensure that capital spending plans are considered in the context of corporate priorities and alongside the revenue budgetwill be of particular importance, given the prospects for reducing capital resources over the three year planning period.
4.2.4In developing its financial plans the council needs to consider its strategy with regard to the use of reserves. The council’s general approach to managing its reserves has been to ensure the maintenance of a level of balances sufficient to cover the potential financial risks that it may encounter. For 2009/10 this level was set at £20.1 million after review of the council’s risk register. For 2009/10, because of the current economic downturn and the resulting additional cost pressures, including those arising from falling capital receipts and interest rates at historically low levels, £10 million of available reserves were applied to support the 2009/10 budget.
5.Integrated Planning Process
5.1Given the financial pressures the authority is now facing, it is even more important that service planning and financial planning are undertaken together. It is vital that budget proposals are analysed in the light of their potential impact on the council’s priorities as articulated in the Corporate Plan. This year the budget planning process has been amended to try and strengthen this link, so that difficult decisions are made in the context of minimising their impact on Hertfordshire communities.
5.2In addition to service budget review work to identify cost pressures and efficiency savings, a number of strands of activity will come together this year to deliver an integrated approach. These include:
- an organisation-wide analysis of the overall expenditure and staff resources associated with different kinds of activity through the LGA/Local Partnerships’ Delivering Efficient Corporate and Transactional Services (DECATS) programme. HCC is among the first authorities to participate in this programme.
- an exercise to understand the extent to which we generate income from our activities compared to other local authorities
- a review of the Value for Money provided by our services compared to other local authorities
- a review of procurement activity and externally provided services
- consideration of the impact of impact of emerging budget proposals on the delivery of council priorities and identification of the associated risks.
5.3As the pressures on the public finances will continue into the medium-term, it is important that the Council strengthens its financial planning. The Integrated Planning Process is therefore intended to bring together 3-year modelling of revenue and capital budgets and performance targets, in the context of the Corporate Plan and the priorities expressed within it.
6.Engagement
6.1 It is important that the public, businesses and community leaders both influence and understand the decisions that will be taken as part of the Integrated Planning Process. A range of consultation methods for engaging these groups are being planned for delivery in the autumn, including online surveys, and face-to-face events.
7.Timetable
7.1 The proposed timetable for the 2010/11 Integrated Planning Process is attached at Appendix 1.
APPENDIX 1
Integrated Planning Process - Timetable
2009May - September / Chief Officers / Chief Officers carry out summer planning and budget work including:
- review of pressures
- identification of cashable efficiencies
- analysis of comparative costs and
benchmarking data
- analysis of needs
- mapping of budgets to priorities
- capital bids
October/November / Consultation with community leaders, businessesand residents.
November / Pre-Budget Statement - Chancellor of the Exchequer
Late November / Government confirm provisional finance settlement for 2010/11 and other specific grants (provisional figures already provided in the January 2009 announcement).
December / Results of consultation feed into process.
17 December / Policy & Resources Cabinet Panel / Receives information on impact on priorities, standstill revenue budget, efficiencies, capital bids and feedback from engagement activity.
2010
7 to 12 January / Service Cabinet Panels / Consider impact on priorities, standstill revenue budget, efficiencies, capital bids and feedback from engagement activity.
14 January / Policy & Resources Cabinet Panel / Consider Service Panel views and makes recommendations to Cabinet.
Late January / Government announce the final finance settlement for 2010/11.
APPENDIX 1 (cont’d)
1 February / Cabinet / Make capital and revenue budget proposals, review reserves and consider risk management report and consultation.3 to 10 February / Service Cabinet Panels / Review the Cabinet’s revenue and capital budget proposals and consider whether to make further recommendations.
11 February / Overview & Scrutiny Committee / Review Cabinet capital and revenue budget proposals.
15 February / Cabinet / Recommend budget and medium term financial strategy to council, after consideration of the views of Service Cabinet Panels and Overview & Scrutiny Committee and wider engagement.
23 February / County Council / Approve revenue budget and capital programme for county council and set council tax for HCC.
Late March / Government expected to announce specific council tax capping criteria which will be applied for 2010/11.
1
090917 11 Item 5 IPP Report