1. 1 THE BIRMINGHAM BUDGET 2013/14 AND TO 2017 CONSULTATION AND DEBATE Peter Hay Strategic Director Adults and Communities

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4. 4 Our controllable budget

5. Where Government Grant Cuts Have Fallen

6. Reductions in Government Funding Average for country £74 per person Birmingham’s :£149 per person If cut by national average :extra £79.2m each year

7. 7 THE CHALLENGE Over a six-year period, from 2010/11 to 2016/17, the forecast total Government grant to Birmingham City Council will reduce by at least £310m. At the same time, we will need to pay for unavoidable cost increases, due to the following: Inflation Changing need in the city’s population Changes in legislation Financing Costs

8. 8 By 2016/17 the combined impact of rising costs and reducing grants mean that we need to make cuts of around £600m

9. 9 Funding and Pressures

10. 10 Resources Uncertainty Business Rates Retention Scheme - Apr 2013 Formula changes in setting baselines Adjustments to Government overall funding levels –School related overheads £7m (currently assumed) –Early Intervention Grant – Nursery Places for 2 year olds £8.2m (not currently assumed) –Early Intervention Grant – General Top Slice £4.1m (not currently assumed) Settlement - current rumours are it could be as late as 19 th December

11. 11 Council Tax February 2012 LTFP assumed 1.9% (+£4.9m) Currently assuming an increase within the previously proposed 1.64% referendum limit * (£0.7m less) Council Tax Freeze Grant worth £2.6m for two years (£2.3m less than LTFP, and £4.9m less from 2015/16). What should be the level of the Council Tax increase? Note: Government has withdrawn draft regulations, guidance on the calculation of the referendum limit % is not now expected until the Finance Settlement.

12. If We Increased Council Tax? Every 1% rise only raises in total £2.55m

13. Use of reserves? Our reserves are modest for the size of the organisation, and are earmarked for specific purposes

14. Shared services and efficiency? Entire back office costs less than £100m

15. 15 What have we done so far? £275m of savings in the last 2 years –Reduced staff by 27% –Transformed and streamlined back office systems –No staff cost of living increases since 2010 Reached the point where efficiency savings are not enough Entire back office costs less than £100m

16. 16 What else are we going to do? Extending last year’s savings proposals Setting out new proposals for this year A thorough review of all Council services, which may end in some services being provided differently or stopped altogether

17. Service Categorisation Fit for purpose Fit to outcomes De-commission Or near-zero cost solution “Lite” review Small efficiency target Invest? De-commission Or near-zero cost solution “In depth” review Efficiency target Invest? Downsize service Savings target Statutory minimum? Re - commission Savings target Statutory minimum? Social enterprise?

18. Budget Reduction Proposals Supported by Service Factsheets

19. 19 2013/14 Savings Schedule DirectorateTotal Savings £m New Savings £m Adults & Communities32.718.0 Children, Young People and Families28.322.6 Corporate Resources12.35.7 Development and Culture3.71.6 Local Services28.313.6 Service Reviews9.8 TOTAL109.970.6

20. 20 Immediate and pressing decisions for 2013/14, but … …start planning and working now to deal with 2014/15 onwards Key questions: – Are we doing the right things? – Are we doing them right? OUR APPROACH

21. 21 SERVICE REVIEWS 2013 → 2017 We will be conducting a thorough review of Council services, and the contribution they make to local priorities and legal requirements. This is likely to result in decisions to provide some services in new ways, and to de-commission some others We will deliver savings from this process in order to address the medium-term challenge, and also to realise some benefits in 2013/14. Total Budget Reduction expected from this process by 2017: £197.6m

22. 22 Process and Timeline Public Meetings and a disability forum Separate consultation on specific proposals Budget views on the website and on line survey – closes 6 th January 2013 Budget and Council Plan 2013/14 reviewed by Cabinet, Monday 11 February 2013 Budget and Council Plan 2013/14 presented to City Council Tuesday 26 February 2013

23. Your views Strategic Implications Commissioning and contracting Long term public finance in Birmingham and what it means for you Council will consider new approaches

24. Discussion