More ICT costs, £3m of reserves and £2m government social care funding - Peterborough City Council budget round-up
Peterborough City Council revealed its latest set of budget proposals on Friday.
Proposals include a three per cent rise in council tax, a boost in business rates collection, new environmental savings and costs and additional costs to a new Local Authority Trading Company (although the council insists it will still generate significant savings).
The council is having to bring its budget down by £23.6 million this year, with the latest plans tackling £8.2 million of that.
The Conservative-run authority has seen its main government grant slashed by 80 per cent in the last seven years to just £10 million, and there is more pain ahead with the council predicting a £18.4 million deficit in 2020/21, and £20 million in 2021/22.
Here is a round-up of some of the more eye-catching budget proposals not previously covered.
ICT costs - £1.8 million cost over the next three years
The council’s previous set of budget proposals in October revealed an extra ICT cost of around £3 million over the next three years as “savings and income previously intended to be delivered will not be realised as originally planned”.
It was later reported that the council was required to change its IT operating system back to the ‘cloud-based’ Microsoft 365 software to match up with Cambridgeshire County Council at a cost of £1.12 million.
The latest budget proposals reveal an additional cost of between £605,000 and £677,000 a year over the next three years, again due to ICT.
The report states: “This budget pressure covers hosting and licensing of ICT systems. It comprises of the council’s move to Microsoft 365 and also covers other specialist IT systems including the HR/Payroll system, the Public Protection system, the People’s Network and additional IT support for users.”
Reserves - £3 million one-off saving
The council has three reserves - one (£6 million) for general emergencies, one ringfenced for specific areas and one which can be used freely.
The council is planning to use £3 million of the latter.
Coroner pressures - £105,000 cost a year
Two new officers need to be hired due to a 16 per cent rise in referrals for coroner’s services over the last four years.
Peterborough United rent - £380,000 cost a year
The expected sale of the ABAX Stadium back to Peterborough United later this year will see the council lose out on an annual £380,000 a year in rent.
Money generated from the sale will go into the council’s capital budget (which is for infrastructure projects) rather than its budget for services.
Community Asset Transfers - £180,000 saving a year
The council is in the process of transferring over its community assets.
This will generate savings as it will no longer be responsible for inspection, testing and reactive repair and maintenance works.
St George’s Hydrotherapy Pool - £58,000 cost a year
Vivacity runs the pool in Dogsthorpe Road, but the council had budgeted for it to take on the remaining financial liabilities.
However, the council said: “The operating model for the pool is still being developed, and Vivacity are not yet in a position to be able to take on this additional liability.”
The council said it hopes Vivacity will be taking on the costs by April 2020.
Social care - £2.15 million saving a year
The council has received more than £2 million of social care funding announced in the Budget in the Autumn.
It is expecting that funding to continue in future years.
National Living Wage - £114,000 cost a year
A new pay scale starts in April which will see the lowest salaries at the council rise above the National Living Wage.
Green councillor Julie Howell said: “We believe Peterborough City Council should be a Living Wage employer. This is a way for PCC to show leadership to other councils.”
Capital programme - £1.1 million cost in first year, £1.5 million in both 2020/21 and 2021/22
The council has been unable to reduce its capital programme from £114 million to £100 million as planned. It said this was “due to the demand placed on this programme from the need to undergo work such as to build, refurbish and expand schools to keep up with the increasing number of schools places required.”
The extra cost to the budget comes from increased borrowing costs.
Council tax collection - £201,000 saving
There will be a growth in council tax income for the current financial year above predictions because of the city’s rising population and construction of new homes.
This will then be rolled over in future years.
Cllr David Seaton, cabinet member for resources, said: “We are continuing to deliver a balanced budget and reduce the overall budget gap. Our prudent approach of considering the budget throughout the year is working.
“Details of the Government’s Fairer Funding Review are still uncertain, which means we must continue to identify longer term savings and additional income.
“Our collaborative working with Cambridgeshire County Council is a longer term project which will deliver a sizable amount of year on year savings.
“Likewise, by continuing to invest in the city’s growth and infrastructure and by setting up innovative income earners such as our new trading company, we will become more resilient.
“This will go some way to protect us, however, the scale of the savings we - and other councils - must make in 2020/21 and 2021/22 are so high, that income generation alone is not the solution.”
Cllr Seaton said he hopes the Fairer Funding Review, which will be announced later this year, will give the council a clearer picture of how its finances will look in the future.
Members of the public can have their say on the budget proposals by completing an online consultation questionnaire at www.peterborough.gov.uk/budget.
Hard copies of the budget proposals document and questionnaire will be available at Town Hall and Bayard Place receptions and in each of the city’s libraries by the formal launch of the consultation at 9am on Monday, January 28.
The consultation will close on March 4 at 5pm. The Cabinet will consider comments on Monday, February 25 and Full Council will debate the proposals on Wednesday, March 6.