1. LEICESTER CITY COUNCIL BUDGET 2011/12 CONSULTATION PROPOSALSPUBLISHED ON 18th JANUARY 2011

2. 2 Summary Huge government funding reductions Most difficult budget in decades Continued to protect key priorities Major efficiency/management savings Council tax frozen Changes made following early consultation Significant cuts unavoidable

3. 3 Background - National New Government committed to quickly reducing financial deficit In-year spending cuts – 24 th May 2010 Emergency Budget June 2010 – 29% reduction in formula grant over 4 years – front-loaded savings BSF: –Leicester scheme continues –asked to model 40% reductions Draft Financial Settlement 13 th December

4. 4 Background – City Council Track record of meeting budgets – strong position to meet challenges In-year reductions managed by combination of one-off resources and spending reductions £50m grant reductions 2011/12 (revenue/capital) Some major spend pressures in addition to grant loss Extent of change/lateness of announcements requires fundamental review to change models of delivery/reduce overheads Budget focus is on 2011/12, more fundamental review over longer time period Cuts inevitable given scale of reductions

5. 5 Government Funding Reductions - Revenue 2010/112011/12Increase/(Reduction) £m Formula grant208.1189.8(18.3)8.8% Specific grants: - Early Intervention23.818.5(5.2) - Learning Disability9.910.10.2 - Housing Benefit Admin4.03.4(0.6) - Homelessness0.60.70.1 - Working Neighbourhoods9.20(9.2) - Former Education3.60(3.6) - Other ceased grants0.90(0.9) New specific grants: - New Homes Bonus (est)1.4 - Council Tax Freeze2.4 Sub-Total specific grants51.936.6(15.3)29.5% TOTAL REVENUE260.0226.4(33.6)12.9%

6. 6 Government Funding Reductions - Capital 2010/112011/12Increase/(Reduction) £m Transport Integrated Transport Package5.52.8(2.7) Capital Maintenance2.22.1(0.1) Other0.50(0.5) Sub-Total – Transport8.24.9(3.3)40.2% Education Basic Need4.26.92.7 Primary Capital Programme7.30(7.3) Devolved formula4.70.9(3.8) Modernisation2.80(2.8) Co-location2.6(2.6) Kitchen improvements1.8(1.8) Capital Maintenance4.3 Harnessing Technology1.7(1.7) Sub-Total – Education25.112.1(13.0)51.8% Housing Decent Homes6.90(6.9) Major repairs11.413.52.1 Sub-Total - Housing18.313.5(4.8)26.2% Social Care0.40.80.4 Total52.131.4(20.7)39.7%

7. 7 Funding Changes – Other Issues Council tax freeze – 2011/12 only HRA changes – not until 2012/13 Some additional funding for adult care via NHS Transferred £0.9m as a central provision for academies (national levy) New Homes Bonus

8. 8 Priorities and Approach Continue to reduce bureaucracy through efficiency Reduce management costs Reduce reliance on agency staff and consultants Consider other ways to provide services, and joint services Review how we deploy and reward our workforce Maintain our commitment to: –improving educational attainment –safeguarding children and vulnerable adults –regeneration and economic development, including Leicester Market –supporting cultural activity Continue drive to transform adult care Reduction in services where still not enough money

9. 9 Our Approach (2) Main focus on 2011/12 Principled use of one-off monies: –for one-off investment –to bridge timing gaps –not to defer problems Principled use of borrowing: –spend to save –Severance Severance funded corporately – 2011/12 only

10. 10 Overall Position 2011/12 balanced but: –Significant work remaining on Children’s Services due to late announcement of major grant cuts –Big cost of severance to be funded separately This requires use of one-off monies which have been found Deletion of over 500 FTE posts in 2011/12 Work to do in Spring to balance 2012/13 and 2013/14

11. 11 Proposals for the Voluntary Sector

12. 12 Current expenditure on Voluntary Sector services Main areas of spend – Children’s services approx £3.7m – Adult Social Care approx £3.9m – Others approx £3.6m Most services are contracted in the form of a contract for ‘community based services’ or grant aid agreements

13. 13 Context to reductions Some voluntary sector contracts are subject to reductions as part of the budget proposals for individual service areas Adult Social Care voluntary sector (& independent) contracts/grants are due to be reviewed during 2011/12 as part of the personalisation agenda Others voluntary sector contracts/grants are currently not subject to reductions for 2011/12

14. 14 Proposed reductions Consideration originally given to applying a 5% reduction to all voluntary sector contracts/grants: –Not ending on 31.3.2011 –Not subject to reductions or –Formal review in 2011/12 Savings required to contribute to the Councils overall budget reductions for 2011/12 (originally suggested to support community safety activities, but this has been dealt by other means) Further savings likely after 2011/12, but further consideration required

15. 15 Proposed reductions (2) Concerns raised in relation to the Council’s Equality Duty –Some organisations may not be able to absorb a 5% reduction –Equally some organisations may be able to achieve more than a 5% reduction Targeted Approach to be implemented No monetary figure for the savings – but more the better

16. 16 Proposed targeted approach Each service area will be subject to a review –To determine if the service still reflects the Council’s priorities –If not, then the service will be de-commissioned –If yes, then what savings can be achieved –Impact of reductions, inc Equality Impact Assessment –Will need to dovetail with planned service reviews –Negotiations will be completed by the Director responsible for the specific service area

17. 17 Review process The Council intends to adopt a process for considering proposals and consulting upon them The proposals will be implemented either following: –A full service review (and using the contractual mechanisms) or –By negotiation or –Expiry of the contract Each voluntary sector organisation affected by the proposal will be contacted by the appropriate Director to discuss how the review will be conducted, timescales etc,

18. 18 Key Message for you to take back to the Voluntary Sector organisations you represent The Council is not proposing to introduce a 5% reduction to all voluntary sector contracts or grants However, all voluntary sector contracts & grants not subject to reductions in the budget or subject to a planned review, such as Adult Social Care, will be subject to a formal review process to determine if savings can be achieved.