Subject:Efficiency Plan 2016/17 to 2020/21

THE CABINET

10 OCTOBER 2016

Subject:Efficiency Plan 2016/17 to 2020/21

Lead Officer:David Buckland

Contact on 01789 260425

Lead Member/
Portfolio Holder:CouncillorC Saint

Summary

The purpose of this report is to present the draft Efficiency Plan for Stratford on District Council, in order to secure the multiyear Local Government Financial Settlement which was published in February 2016.

It is recommended that the Efficiency Plan attached at Appendix 2 be approved and submitted to the Department for Communities and Local Government.

1Background/Information

1.1As reported during the budget process for 2016/17, the government provided an indication of the financial settlement which may be available from Government for a four year period. On 10 March 2016 the then Secretary of State for Communities and Local Government wrote to all local authorities with an offer to secure these indicative settlements in return for the submission of an Efficiency Plan. It was a requirement that any such submissions be made by 14 October 2016.

1.2In addition to the multiyear settlements, Government has also issued guidance in relation to the flexible use of Capital Receipts, to fund implementation costs of projects which will go on to provide on-going revenue savings. Previously, the Secretary of State would need to determine a Capitalisation Direction on a case by case basis for such a purpose, however, local authorities now have freedoms to fund such costs from Capital, so long as it is funded through Capital Receipts and would not involve the authority borrowing to fund such costs. There are currently no such plans to fund expenditure of this type from Capital Receipts during the period of the current Medium Term Financial Plan.

1.3There is no specific guidance from Central Government in relation to the format of the Efficiency Plan, however, there is reference to the “Efficiency Strategy” within the guidance issued to local authorities in December 2015. There is no specific requirement for the Efficiency Plan to be a separate document; however, the approach which is proposed for the Council is to provide a standalone plan which refers to other plans and strategies which are already in existence.Appendix 1 attached provides the high level government guidance that the Council received.

2Local Authority Revenue Finance Settlement for 2016/17

2.1On 8February 2016 the Council received the Final Local Government Settlement for 2016/17. This follows on from the announcement from the provisional settlement which was announced shortly before Christmas. In addition the Chancellor of the Exchequer within the Spending Round 2015 had indicated that the support to Local Government would reduce by 16.5% in 2016/17.

2.2Alongside the settlement for 2016/17, the Government for the first time has published indicative settlements for the following three years. As mentioned above a condition of publishing these future year settlements was that the Council would be required to publish an “efficiency plan”. Whilst there are significant reductions in the funding to local government included within the proposed future years settlements the publication of such information welcomed development to assist with medium term planning.

2.3The Government directly supports the Council through Revenue Support Grant, however, whilst in the recent past this has been a significant grant to the Council this forecast to end entirely in 2016/17. This makes a transition where councils are grant funded to an environment where funding is met from local taxation through either Council Tax or Business Rates.

2.4A new grant however was introduced within this year’s settlement. The Government introduced the Rural Services Delivery Grant. This grant which will be as a s31 Grant 2016/17 (previously included in the Revenue Support Grant), reflects the additional costs facing councils operating over a sparsely populated area. The longer term future for this grant funding is not certain. To assist with the transition in funding Government also introduced a grant payable in 2016/17 and 2017/18 for this purpose, this will not be repeated in future settlements.

2.5The table below identifies the grants within the local government finance settlement for the period 2013/14 to 2019/20. The rows which are shaded are those which are covered by the offer from Government to secure upon the receipt of an efficiency plan.

Table 1:Settlement Funding Assessment

3.Efficiency Plan

3.1The Council’s proposed Efficiency Plan is attached at Appendix 2. This document combines information already published by the Council in relation to future spending plans, and specifically identifies the process of the Council’s Strategic Review.

3.2The Efficiency Plan also looks back and identifies the level of savings and efficiencies that the Council has already during the period of austerity and provides the appointed auditors opinion in the Council’s ability to deliver Value for Money.

3.3The Cabinet is asked to consider the document shown at Appendix 2 and either approve for submission or identify changes that would be necessary to the documents ahead of submission.

4Options available to The Cabinet

4.1That The Cabinet

(a)Approves the proposed Efficiency Plan attached at Appendix 2;

(b)Identifies changes to the proposed Efficiency Plan attached at Appendix 2;

(c)Chooses not to submit an Efficiency Plan to Government.

5Evidence Base

5.1The Efficiency Plan has been produced following the request from the then Secretary of State for Communities and Local Government. There is no specific guidance upon the format of the Efficiency Plan.

6Implications of the Proposal

6.1Legal

6.1.1There are no direct legal implications to this report.

6.2Financial

6.2.1This is a finance report which proposes a draft Efficiency Plan in order to secure the proposed multi-year settlements announced by Government within the local government financial settlement 2016/17. These settlements identify significant reductions in central government support which have been incorporated within the current Medium Term Financial Plan.

6.2.2Government have not provided details of alternative settlements that may be received by the Council should the authority choose not to submit an Efficiency Plan, however, it is likely that any such settlement would be adverse to the proposed position.

6.3Environmental

6.3.1There are no direct environmental implications arising as part of this report.

6.4Corporate Strategy

6.4.1This process has been developed to assist the Council in prioritising resources in order to achieve the objectives of the Corporate Strategy.

6.5Analysis of the effects on Equality

6.5.1There are no direct equality implications arising as part of this report.

7Risk Assessment

7.1Whilst there is no compulsion for the Council to produce an Efficiency Plan failure to do so would leave the Council at risk of not securing the draft settlement which was published in February this year. The Government have not identified the likely further reductions that they may impose upon local government if such plans are not submitted, whilst there are reductions in funding it does at least enable the Council to plan for the new environment with a level of certainty.

8Conclusion

8.1The Government have made an offer to local government to provide a level of certainty in respect of funding for the next three years in return for a completed Efficiency Plan. The Plan identified at Appendix 2 brings together the existing plans for the Council and presents to Government a coherent plan for deriving future efficiency gains.

8.2The Cabinet is asked to consider the draft Plan attached at Appendix 2 and propose any changes if required.

David Buckland

EXECUTIVE DIRECTOR and S151 Officer