1. cipfa.org.uk

2. Conference Welcome Michael Burton Chairperson CIPFA Northern Ireland

3. cipfa.org.uk Key finance and policy developments Simon Hamilton MLA Minister of Finance & Personnel Northern Ireland Executive

4. cipfa.org.uk Economic overview Tony Travers Professor London School of Economics

5. The wider context The UK suffered a deep recession, followed by a return to relatively strong growth 2.4% in 2014 and 2.2% in 2015 Global growth at 3.7% in 2014 and 3.9% in 2015, according to IMF US growing at 2.8% (2014) and 3.0% (2015) The Eurozone is showing slower growth, coupled with continuing challenges to the Euro: 1.0% (2014) and 1.4% (2015)

6. UK GDP, quarter on previous quarter Source: BBC, ONS

7. Forecasts for 2014 Source: HM Treasury

8. Forecasts for 2015 Source: HM Treasury

9. How we got here…. The post-1945 political and economic settlement – Welfare State/nationalisation – Development of powerful ‘social democratic’ expectations of consistent services throughout the country Contemporary challenge is how to retain a State of 42-42% of GDP while deficit reduction requires 100% of public expenditure to be financed from current taxation Taxation = 38% of GDP

10. Taxation and public expenditure as % of GDP Source: Office for Budget Responsibility, Economic and fiscal outlook Charts and Tables, March 2014, Chart 1.1

11. Local government’s position UK consists of four highly-centralised nations – over 95% of all taxation set by Chancellor Gradual shift of powers, particularly within England, from local to central control Northern Ireland has a local government system with relatively modest powers compared to the rest of the UK Scotland and Wales have seen reduced local autonomy, but remain slightly more autonomous than England or Northern Ireland Northern Ireland retains domestic rates, last revalued in 2005 Local taxation has become problematic in Scotland, England and Wales – Only Wales has had a council tax revaluation, and then not since 2005 But not capped or frozen – Scotland’s council tax frozen since 2007 – England: capping and freezing

12. Local domestic tax vs tax receipts, UK Council tax/Domestic ratesTotal UK tax 2009-1025.0513.3 2010-1125.7550.8 2011-1226.0572.6 2012-1326.3593.3 2013-1427.1618.8 Increase: 2009-10 to 2013-14 8.4%20.6%

13. Local government and other services The UK government has prioritised International Development, welfare, NHS and schools Similar pattern within devolved governments for health and education Local government, inevitably, has faced a greater spending squeeze so as to protect other programmes ‘Austerity’ slightly less for NI local government, but not by much

14. Current spending, by service group

15. All GB property taxes require reform Council tax Revaluation, at the very least Needs to accommodate the increase in very high value homes – Northern Ireland ‘£400,000 capped value’ and England Band H create a ‘flat’ rate for very high value homes Non-domestic rates Revaluations due in NI (2015) and E, W & S (2017) Stamp Duty land tax Significantly increased tax rates to capture part of capital gain on property Capital gains tax on property Used in addition to SDLT

16. And now….Mansion Tax The Liberal Democrats and Labour now favour a ‘mansion tax’ as an add on to council tax for homes worth (at today’s prices) over £2m Such a tax would have to be grafted onto domestic rates/council tax – Decision required as to whether it would operate in Northern Ireland, Wales, Scotland Yield to be used to fund national government services – NHS (Labour conference) No fiscal gain to councils

17. Other possible revenue sources Levies on development – ‘Article 40’ Agreements (Northern Ireland)/‘Section 106’ (E&W)/‘Section 75’ (Scotland) – Community Infrastructure Levy (E&W only) Road charges – Congestion Charge (London) – Workplace parking levy (Nottingham) Business Rate Supplement – London (Crossrail) Tax Increment Finance, eg – Edinburgh: Waterfront – London: Northern Line extension to Battersea Fees and charges Business Improvement Districts – Not part of local government, but may provide services; uses NDR base

18. Possible reforms London Finance Commission proposals Devolve all property taxation to local government – Council tax, NDR, Stamp Duty, CGT and others CIPFA/LGA commission on local government funding: UK-wide Government and Opposition have discussed the possibility of giving greater freedom to city regions ‘City Deals’ in a number of cities in England plus Glasgow allow some financial freedoms Belfast and Cardiff to join Core Cities?

19. After Scotland’s referendum Commitment to further devolution to Edinburgh Tax-raising powers, borrowing, welfare (part) Wales Similar tax proposals to Scotland already in place Northern Ireland Will the government request parity with Scotland and/or Wales? England Barnett Formula concerns; English Parliament?; Regions? City regions?

20. The future UK economy now growing, though some uncertainty remains Northern Ireland, England, Wales, Scotland all operate relatively centralised systems of local government Domestic rates/council tax = 5% of all UK taxation Additional devolutionary tax-raising powers for Scotland and Wales do not affect this within-nation centralisation Need for a wider acceptance that the UK is out of line by international standards Has the UK simply become so fiscally centralised that some form of tax decentralisation is inevitable? Debate about Scotland, Wales will affect Northern Ireland and England

21. Economic Overview – international, national and local issues Tony Travers London School of Economics

22. cipfa.org.uk/scotland Refreshments 11.00 to 11.30

23. cipfa.org.uk The politics of change Quintin Oliver Joseph Rowantree Foundation

24. cipfa.org.uk/scotland Tracks

25. cipfa.org.uk Managing demand Ben Lucas Director 2020 Public Services Trust

26. Building future public services – the role of demand management Presentation to CIPFA NI Conference, Belfast, 25 September 2014 By Ben Lucas – Chair of Public Services at the RSA

28. Two possible futures… Redefining relationships & citizen engagement Retrenchment and residualisation

29. New Times

31. What do we mean by demand management?

32. Use new technology New channels of ‘conversation’ with citizens Potential of analytics, data integration & connected services Managing demand through better service design

33. Understand how to work with the grain #1 RSA finding: “we don’t know!” #2 “social support & community is not always what we think it is…” #3: “everything is linked…”

34. Get beyond the services What makes a meaningful difference to peoples lives? How can local authorities use their socio-economic clout? Not just about behaviour change, but building capacity and supporting citizens

35. Public Services and Growth: two sides of the same coin Growth and demand management as interdependent City growth and fiscal rebalancing deals – Devo Met Developing the ‘social’ role of business & the growth potential of public services

36. Local leadership – the politics Community leadership as a driver of demand management Co-operative Innovation Creating a ‘shallow end’ and a sense of togetherness

37. Whole place system change Reactive/Proactive Split 2011/12 in Greater Manchester

38. GM Revenue budget 2011/12 Reactive spend by agency (£m)

39. GM Revenue budget 2011/12 Reactive spend by category (£m)

40. R Visio

41. http://www.oldham.gov.uk/letstalkbudget

44. cipfa.org.uk Overcoming conflict to improve public services Rena Shepherd

45. cipfa.org.uk/scotland Refreshments 15.15 to 15.30

46. cipfa.org.uk Mike Stevenson - Managing Director mike@thinktastic.co.uk Follow us on Twitter @thinktastic www.thinktastic.co.uk

47. cipfa.org.uk/scotland Close and Reception