Place Select Committee Shaping Our Financial Future 13 th January 2015

Economic Background Improved but uncertain economic outlook Falling unemployment Low Inflation / interest rates But………

Economic Background (2) National debt £1.4 trn Debt at 80% of gross domestic product Eurozone instability Deficit reduction will continue to 2018/19

Issues to Consider Public sector reform Local Government Finance Changes? Care Act Management of Assets

What is in a Number? 1.8% Average reduction in spending power for councils between 2014/15 and 2015/16

What is in a Number? 4.0% Reduction in spending power for STC between 2014/15 and 2015/16

What is in a Number? 7.9% Reduction in spending power for STC between 2014/15 and 2015/16 after adjusting for health spend

What is in a Number? 14.9% Reduction in spending power for STC between 2014/15 and 2015/16 after adjusting for health spend and cost pressures

Council Annual Revenue Budget £m£m

Projected Annual Revenue Budget Deficits £m£m

Projected Council Revenue Budget £m

2015/16 Workstreams Next 4 Years Opportunities General approach includes: –On-going efficiencies –Medium term new models –Long-term strategic shift Proposed 5 Year Budget Approach

6 Cross Cutting Workstreams Commissioning for independent living Integration and Early Help Housing and Area Management Employment, Skills and Training Redesigned Support Services External contracts

Summary Proposals Service Saving (£000) Commissioning for Independent Living7,573 Corporate Finance3,968 Integration & Early Help3,638 External Contracts3,613 Redesigned Support Services 1,803 Housing & Area Management 950 Employment & Skills 433 Total 21,978

Commissioning for Independent Living  More efficient ways of working  Safe and positive outcomes for individuals  Better matching of resources to need  Appropriate cost sharing  Effective commissioning

Corporate Finance  Effective Income Management  Efficient Income Management  Business Rate Rebate  Transport Levy

Integration & Early Help  Services managed in- house  Commercial offer to partners  Service integration  Streamlined management

External Contracts  Maximising value from strategic partnership  In-sourcing of some services  Integrated customer services

Redesigned Support Services  Improved insurance management  Shared skills sets and reduced duplication  Streamlined management

Housing & Area Management  Full year effect of new area management model  Clear lines of responsibility and accountability  Income Generation  Reducing fuel poverty

Employment & Skills  City Deal Funding  Skills Funding Agency  National Apprenticeship Scheme

Cost Pressures / Investment

Investing in Our Future Aligned to objectives and 20 year vision Maximising external funding opportunities Cost / benefit analysis over project lifetime Transparent impact upon revenue budget and affordability

Funding of 2015 – 20 Capital Investment Programme

Investing in Our Future (2) Town Centre Regeneration:  £50m council investment  Acquiring sites  Digital Media Centre  Completion of Hebburn Hub

Investing in Our Future (3) Environmental Schemes:  Neighbourhood Roads/ Footpaths  Ocean Road  Flood Alleviation

Investing in Our Future (4) Transport Schemes:  Improved connectivity  Lindisfarne Roundabout  Arches Junction

Investing in Our Future (5)  More than £100m in next 5 years  Programme due for completion Dec 2016  Maintenance of stock over long term  More affordable homes

Next Steps Consultation: Select Committee meetings in January Other Stakeholder meetings in January Cabinet propose Medium Term Financial Plan – 11 th Feb Council consider Medium Term Financial Plan – 26 th Feb