1. Effectively Prioritising Key Outcomes For Tackling Poverty & Community Regeneration 25th November 2010 Budgets: The Impact For Poverty & Community Regeneration Mark McAteer Director of Governance and Performance Management Improvement Service

2. Scope of Presentation The budgetary challenges : Public Service Spending & Benefits Changes Rising to the challenges End points

3. C.S.R. Headlines Overall 2.5% cash reduction in Scottish current spend between 2010/11 and 2014/15: (Real: 11.6%) Better than assumed for public service spending because…. Health & Education relatively protected: 50% of Scottish spend Income line better (11.6% real across 4 years): demand line will get worse £7 billion additional taken out of welfare benefits

4. Scottish Draft Budget 2011/12 LG: - 2.6% (cash) on support for current spend (£302 M) if conditionalities accepted (if not - 6.4%) -17.9% (cash) on capital (excluding schools programme) (£149 M) NHS: 2% (cash) growth on current spend: £80 million ‘change fund’ for social care: Capital: -11% Police & Fire: as per LG: -2.6% (current) & -17.9% (capital)

5. Income & Demand Trends: Total Finance Gap Projection of income based on CSR Projection of demand & costs on current trends adjusted for demography Based on current service models & arrangements TFG: 2013/14 = £1.8 billion, 2016/17: £2.8 billion Income reduction = 48%; demand on current models = 52% What happens if nothing else happens

6. Scottish Block Finance & Demand 2009/10 – 2016/17 (% real terms)

7. Benefits Changes June Budget: £11Bn to be taken out of benefits spending programmes (further £7bn in CSR) Key changes: Move to CPI from RPI for up rating Migration from Incapacity Benefit to Employment Support Allowance Reductions in Disability Allowance entitlements Changes to Housing Benefits

8. Benefits Changes: June Budget Scottish LG Forum Against Poverty : Direct & Indirect cuts Benefit ChangesPotential Loss (£m Scotland) Housing Benefit27 Disability Living Allowance260 IB to ESA: 135 CPI to RPI 93 Total£515m

9. Benefits Changes: Consequences For Regeneration Many families/ individuals will see income reduce significantly (plus VAT change impact) Most families/ individuals reliant on benefits spend locally – major impact on local retail sector Combination of public service & benefit cuts will have significant impact on regeneration areas & families/ individuals within them Consequents for multiplier impacts in private sector - areas dependent on public sector employment & benefits; sectors dependent on public spending

10. Rising to the Challenge Do Nothing not an option so… Focusing on outcomes: not services Respecting inter-relationship of outcomes: economic wellbeing; safety; health & social care…. Respecting research & logic modelling: familial & communal capacity; economic disadvantage/poverty Recognising we cannot do outcomes to people: Co- production & change to public service delivery models

11. We Need To Avoid… Fatalism - lack of ambition against ‘overwhelming pressures’ Retrenchment into service protection Focusing on boundaries (organisations/ geographies) Abandoning longer term transformation

12. End Points ‘Challenging Times’ – but not as difficult as could have been Differential impacts for different areas/ social groups Multiplier effect will generate further pressures so need to manage the short term while keeping focus on longer term