Agenda item - Brighton & Hove City Council Budget 2018-19

James Hengeveld, BHCC Head of Finance (Planning and Reporting) and Cllr Dan Yates will present on the council’s 2018-19 budget plans.

Please note that this is an opportunity to ask general questions about the budget plans. There will be an opportunity at the January 2018 OPC meeting to ask detailed questions about Adult Social Care budget plans.

361.1  This item was introduced by James Hengeveld, BHCC Head of Finance (Planning and Reporting) and by Cllr Dan Yates, Chair of the Brighton & Hove Health & Wellbeing Board.

361.2  Mr Hengeveld outlined the budget challenge for BHCC, making a number of points:

·         Over £100M of Government funding has been lost in recent years and there is increasing demand for key services.

·         This is the second year of a four year budget plan that will see very significant savings made in each year.

·         There are plans for a 5% Council Tax increase next year (including the social care precept).

·         The council’s Capital Programme is around £150M, mainly in housing and highways investments. This does not include other major projects that the council is enabling but not paying directly for (e.g. Circus St)

·         The position on Business Rate Retention is unclear, with the Government having initially promised 100% retention but with no legislation anticipated which would enact this. In any case, increased retention is likely to be accompanied by decreased funding in other areas or by additional responsibilities for councils.

·         The Government announcement of a local government pay offer was higher than expected. This is welcome, but creates an additional financial pressure.

·         The council has responded to inflation by increasing most fees & charges by 2%.

·         There have been significant demand-led cost increases, most notably in terms of Learning Disability services and services for Looked After Children.

·         This year’s budget plans faced a £13.2M shortfall. Plans were announced at November Policy, Resources & Growth committee to close this gap by making £12.1M savings. This leaves a gap of around £1M. However, these figures will change between now and year-end and the Government Finance Settlements will not be finalised until January, so more work on the budget will be required.

·         The council is doing all it can to deal with the issue of empty properties, charging full Council Tax on holiday homes and 1.5 times the standard CT rate for properties empty for more than two years.

·         The social care precept has raised £3.8M in the current year. This has been spent on increasing wages for care home workers and funding additional pressures in learning disability, mental health and physical disability services. Better Care Fund (BCF) payments have also increased in the past year and have been used to fund social care services. However, this has been offset by reductions in the New Homes Bonus.

361.3  In response to a question on higher Learning Disability (LD) costs, Mr Hengeveld told members that these were caused by a mixture of increasing complexity of needs, clients living for longer, the impact of changes introduced following the Winterbourne View enquiry, and the transfer of responsibility for some people’s care from the NHS to the council without a matching transfer of all care costs.

361.4  In answer to a question about the integration of BHCC and CCG budgets, Cllr Yates explained that The CCG sets it budget later and in a different way to BHCC which limits the ability to integrate planning. However, the CCG is also facing significant budget challenges and will no longer be in a position to pick up costs from the council.

361.5  In response to a question from the Chair on where this year’s social care cuts would fall, Cllr Yates told members that there had been a focus both on extracting maximum value from contracts (including identifying and eliminating duplication with NHS services); and on anticipating areas where demand is reducing (e.g. for day services). It has consequently been possible to reduce expenditure without significantly reducing services.

361.6  In answer to a query from the floor on the increased cost of the Integrated Community Equipment Store (ICES) contract, Cllr Yates told members that the previous contract has significantly underestimated activity and costs. The revised contract figure represents a much more realistic estimate of the true cost of supplying community equipment. There is a drive to recycle equipment, but whilst this is definitely cost-effective for more complex/expensive equipment, recycling costs can outweigh purchase costs for more basic items.

361.7  In response to a request from Francis Tonks for a leaflet detailing community equipment, Cllr Yates agreed that this could be useful, but noted that the market is changing rapidly meaning that a leaflet would quickly go out of date. More important is ensuring that carers are fully provided with up to date information on equipment and adaptations via the Carer’s Hub.

361.8  In response to a question from the floor on HMOs paying business rates and on students contributing to Council Tax, Cllr Yates confirmed that the council has lobbied Government on both these issues, as have many other local authorities. There was discussion of the impact of increasing student numbers on the city, with Cllr Yates noting that the University of Brighton is not planning to raise student numbers, and the University of Sussex only plans for marginal increases in the next few years.

361.9  In answer to a question on the missing £3M parking revenue, Mr Hengeveld told members that there was little realistic prospect of getting this money back and most of it has now been written off.

361.10            In response to a question about the impact of budget plans on council staff, Mr Hengeveld told members that about 90 posts would be deleted, with further posts (e.g. Royal Pavilions) transferring to other organisations.