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INTRODUCTION TO LOCAL GOVERNMENT FINANCE: 

INTRODUCTION TO LOCAL GOVERNMENT FINANCE James Hengeveld Strategy & Resources Manager Strategic Finance & Procurement

Introduction: 

Introduction Purpose of this session is to provide information on: How much the council spends on different services How services are funded Capital investment budget Financial issues for the Council

2007/8 Gross Revenue Expenditure Budget (£676million) includes schools/housing: 

2007/8 Gross Revenue Expenditure Budget (£676million) includes schools/housing

2007/8 Gross Revenue Budget - Funding: 

2007/8 Gross Revenue Budget - Funding

Schools Funding: 

Schools Funding Schools funded by the Government through Dedicated Schools Grant (DSG) Two year funding settlement for 2006/7 & 2007/8 2006/7 6.8% per pupil increase = £3,692 2007/8 6.6% per pupil increase = £3,936 Review of DSG formula this summer for next 3 years

Estimated Pupil numbers 2007/8 (Full Time Equivalents): 

Estimated Pupil numbers 2007/8 (Full Time Equivalents) Pre School/Nursery 1,324 Primary Schools 16,608 Secondary Schools 11,350 Special Schools 486 Outside of Local Authority Schools 113 Total 29,881 Multiplied by £3,936 = £117.6m

Funding of Council Housing: 

Funding of Council Housing Ringfenced Housing Revenue Account for 12,385 dwellings Income from rent, service charges and Government Housing Subsidy Expenditure on management & maintenance

Funding of 2007/08 Net Budget (£205million): 

Funding of 2007/08 Net Budget (£205million)

Revenue Support Grant: 

Revenue Support Grant Grant received from the Government Complex formula Takes account of factors such as population, deprivation, ethnicity, higher costs of providing services in different areas Protects authorities from grant losses from formula and data changes through a grant floor The grant floor is the minimum increase in grant any authority can receive each year

2006/7 & 2007/8 Settlements: 

2006/7 & 2007/8 Settlements Average national grant increase 3% in 2006/07 B&HCC floor grant increase 2% in 2006/07 Average national grant increase 3.7% in 2007/08 B&HCC floor grant increase 2.7% in 2007/08 The council receives grant protection from the floor and other damping mechanisms within the formula of approximately £19m in 2007/08 (£198 per band D property)

Council Tax Statistics: 

Council Tax Statistics

Council Tax Statistics: 

Council Tax Statistics

Council Tax Band D 2007/08: 

Council Tax Band D 2007/08

2007/08 Budget: 

2007/08 Budget

2007/8 Capital Budget (£45million): 

2007/8 Capital Budget (£45million)

Funding of 2007/8 CapitalBudget: 

Funding of 2007/8 Capital Budget

National Spending Review 2007: 

National Spending Review 2007 Announcement in the Autumn National budget under pressure Chancellor calling for pay restraint Education and Health already identified as high priorities Probability of less funding for other local government services Therefore lower grant increases than previous years

Budget Issues for 2008/09 to 2010/11: 

Budget Issues for 2008/09 to 2010/11 3 Year grant settlement announcement in December Pay award and additional single status (equal pay) impact Triennial pension fund review Service pressures continuing in children’s services, learning disabilities / older peoples services National free off peak bus travel for the over 60’s and disabled Cashable efficiency savings of 3% per annum required Council tax increase no more than 5% for capping purposes

Capital Issues: 

Capital Issues Decent homes standards Transport infrastructure Sustainability / climate change Disability Discrimination Act / Fire regulations Maintaining existing assets Spend to save schemes

Projections for 2008/09: 

Projections for 2008/09 Projected increases in spending will significantly exceed increases in resources With a 3.9% council tax increase the estimated overall savings package to balance the budget is £7.7m in 2008/09 Each 1% reduction in the council tax increase is equivalent to about £1.1m further savings

Any Questions? : 

Any Questions?

Treasury management: 

Treasury management Presentation by Peter Sargent Loans & Technical Manager Strategic Finance & Procurement

Treasury management: 

Treasury management TM governed by statute & codes of practice TM = management of cash Achieved through balancing daily cash flows funding capital investment

Treasury management: 

Treasury management Investments ensure money returned on time & in full 3 questions when investing how much? how long? interest rates? investment horizon = 3 years max

Treasury management: 

Treasury management

Treasury management: 

Treasury management Borrowing to fund capital investment long term stability in average cost currently £230m o/s less volatility in interest rates debt rescheduling opportunities

Treasury management: 

Treasury management

Treasury management: 

Treasury management Performance borrowing 1 April 2006 = 4.93% average 31 March 2007 = 4.79% average investments in-house team target 4.83% achieved 4.88% cash manager target 4.98% achieved 5.10%

Treasury management: 

Treasury management 2007/2008 over £1.5m reduction in net cost of TM from 2006/07 a further £425k reduction identified in 2007/08 full assurance in tm systems - Internal Audit report April 2007