1. Draft Budget Proposals for 2011-12 Geoff Dobson – Head of Strategic Finance 15 December 2010 Resources, Finance and Performance Scrutiny Committee

2. Update on the Economy Our Turnover Financial Context Budget Strategy Draft Cash Limits Summary of Identified Savings Key Questions for the Committee Capital Programme 2011-12 Directorate approach to draft savings proposals Menu for Today

3. Key Economic Trends 2010/112011/122012/132013/142014/152015/16 GDP Growth1.2% (1.8%) 2.3% (2.1%) 2.8% (2.6%) 2.9%2.7% Public Sector Net Borrowing (PSND) £149bn£116bn£89bn£60bn£37bn£20bn Net Borrowing as %age of GDP10.1%7.5%5.5%3.5%2.1%1.1%

4. Gross Domestic Product (GDP) Projections

5. Reductions in Public Spending

6. Public Sector Net Borrowing Sources: Bank of England November Inflation Report.

7. Total Resources of the Council £1.1bn 2010-11

8. Total Spending by Directorate £1.1bn 2010-11

9. Summary by Type of Spending 2010-11 £700m

10. 2010-11 Council Tax (Band D) for County Councils

11. Local Government Provisional Finance Settlement Key Messages (1) 2 year settlement – toughest ever and front loaded Formula Grant for 2011-12 £185.2m a reduction of £27m (12.7%) Complex distributional changes in areas of social care and concessionary fares Reductions due to academies Transitional grant – linked to spending power no more than -8.9% reduction Damping arrangements – banded

12. Local Government Provisional Finance Settlement Key Messages (2) Our plans assumed a loss of grant of broadly £27m together with cost pressures of £14.7m Further analysis of the settlement being undertaken Our savings proposals total over £40 million (£42.6m) to bridge this budget gap Money for social care from the NHS of £8.8m on top of the grant settlement – further details awaited Provisional grant for 2012-13 £169m a further reduction of £16m (8.6%) A second two year settlement is expected based on a new distributional model

13. Formula Grant Reductions for Counties

14. 25% Reduction in Formula Grant and Area Based Grant (ABG) (together with forecast spending pressures)

15. New Homes Bonus Business Increase Bonus Scheme Retained locally raised business rates Tax Increment Finance Renewable Energy Projects Local Government Resource Review Review of Local Government Finance including Incentives

16. New Strategic Direction (NSD) Make savings quickly as part of Medium Term Strategy Reflecting priorities of Suffolk Story Money for Capital Financing commitments Reductions in Specific Grant Abolition of Area Based Grant and reductions in ring fencing Identify potential income sources Budget Strategy

17. 2011-12 Cash Limits and Savings Targets

18. Categorisation of Savings

19. Estimated Potential Loss of Posts

20. Schools Funding Pupil premium is £420 per pupil, for all claiming free school meals. This may not be enough to improve outcomes as less than £3m for Suffolk Dedicated Schools Grant cash frozen Minimum Funding Guarantee is -1.5%, no school will lose more than this Schools delegated capital reduced by two thirds

21. Key Questions for the Committee to consider In Relation to Budget Setting Is this process process for making decisions about budget clear? Has there been clear information about the financial constraints and the scale of the savings that need to be made? In view of the Committee, does the process for allocating cash limits reflect the Council’s priorities?

22. Where the Capital Money of £141m is coming from

23. …. And what the capital money is being spent on

24. Capital Programme 2011-12 National reductions of about 45% Ongoing commitments New starts? Affordability

25. Local Transport Settlement 2011-12 – 2014-15 (1) Note All Capital Grant funded and non ring fenced Distribution by needs based formula

26. Local Transport Settlement 2011-12 – 2014-15 (2) Local sustainable transport fund National total £560m (£350m revenue and £210m capital) Profile is: £m 2011-12 80 2012-13140 2013-14160 2014-15180 Major Projects (£1.5bn over 4 years) Regional Growth Fund (£1.4bn) – DoT contributed a third to this funding

27. Directorate Approaches to Draft Savings Key Questions for the Committee to consider in relation to the draft savings schedules:

28. Reducing the Running Costs of the Council (£20m)

29. Remodelling Services (£5.7m)

30. Remodelling Services/cuts to Services (£6.8m)

31. Cuts to Services (£7.6m)

32. Divestment of Services

33. Any Questions?