Budget Statement to Council

Speech by Leader of the Council and Chairman of Cabinet, Councillor Richard Smith on Tue 21st Feb 2006

Introduction

It is with pleasure that I introduce the third budget of the Liberal Democrat administration elected in May 2003. The proposed budget delivers a 3.4% Council Tax increase which is 1.6% lower than the 5.0% we were proposing in the Medium Term Financial Plan approved in February last year. Furthermore, this is the lowest percentage increase in the last six years since and the second lowest since the Council gained Unitary Status in 1997.

Poor Government Grant Settlement for Bournemouth

However, the Council Tax increase is set against another tough Government Grant Settlement for Bournemouth. Nationally the percentage increase in grant for Unitary Authorities is 2.45%. However, Bournemouth has only received an increase of 2%, which is 0.45% below the average. Once again Bournemouth is at the grant floor with the budget settlement resulting in Bournemouth receiving grant protection of £4.7m. After allowing for grant transfers and new burdens placed on us by Central Government the grant increase is only £0.85m. This falls well below the inflation costs of £3.1m facing the Council. Dorset County Council and Poole Borough Council also had lower than average grant statements. To this end our three Authorities have jointly lobbied Central Government in an attempt to secure improved grant settlements in future.

What we have done to contain in the increase in Council Tax as far as possible

To deliver the Council Tax increase of 3.4% and address the demands for budget pressures and service growth, the Council has considered the implications of cashable efficiency gains and savings proposals in 2006/7 of over £4.4m. These proposals have been reviewed in consultation with the Council's various stakeholders and with a view to delivering a reduced increase in Council Tax. Savings of £2.8m being identified for inclusion in the budget now identified. Any further budget reductions would increase the risks and be unsustainable.

Preparing for the future

In 2005/6 the adopted a new management structure which I am pleased to report played a key role in improving the Council's corporate assessment to three stars raising our status from fair to good. I am confident that by building upon the good work achieved to date that we will further raise our status to excellent when we are next assessed. The Council gained a three star status for Use of Resources, placing it in the top third of single tier authorities.

In addition, the Council has used the corporate and service priorities adopted last year to help us address the key issues facing Bournemouth and direct the Council's scarce resources. The budget process has enabled resources to be redirected to meet the Council's key priorities. I am pleased to report that the budget before you includes funding to meet budget pressures and growth bids of £6.3m.

Service improvements and developments include a new household recycling scheme, CCTV upgrades, improvements in customer service systems, strengthening procurement arrangements and money towards the Children's Agenda and Special Education Needs. We have also enabled various partnership arrangements to continue where agencies have withdrawn their funding.

Planning Ahead

The budget for 2006/7 has been set in the context of a five year Medium Term Financial Plan. To assist with forward planning the Government has produced Local Authorities with two year grant settlements covering 2006/7 and 2007/8. From next year this is to be extended to cover three year grant settlements. This Council has long lobbied for this to aid forward planning and warmly welcomes these proposals. Based upon the Medium Term Financial Plan now reported, the Council is aiming to keep Council Tax increases to as low as possible and no greater than 5% from 2007/8 to 2010/11. Achieving this will require additional budget savings of £1.3m in 2007/8. We need to start planning for these reductions now. Local Authorities are required to identify annual efficiency gains of 2½% per annum for 2005/6 to 2007/8. This is nothing new for Bournemouth as we have provision to provide efficiency requirements each year. As each year goes by delivering more efficiency gains does become a greater challenge, and the Government expect Bournemouth to identify and deliver efficiency gains in the region of £3.8m per annum, of which £1.9m have to be cashable gains. I am pleased to report that for 2005/6 and 2006/7 Bournemouth is on target to exceed this target by 5%. It is anticipated that by identifying more efficient service delivery in 2007/8, the Council will be able to minimise the impact of service reductions.

Balancing Act

The Council has worked hard to deliver the lower level of Council Tax, maintain, as far as has been possible front line services particularly Children's Services and Community Care and set a sustainable budget that can be delivered for the next three years. This has been a difficult balancing act.

More extensive consultation

In preparing the budget the Council has consulted with the Scrutiny and Review Panels and with a wide range of Stakeholders, including the Unions, Citizens Panels, Service Partners and Non Domestic Ratepayers. The Council has acted upon the feedback from these consultations and, as a result, reduced the Council Tax increase predicated in the Medium Term Financial Plan approved in February 2005 and amended the package of budget reductions that were initially proposed in September 2005.

Central Government has the power to cap Council Tax increases where the Government considered the budget increase to be excessive. The Minister for Local Government has written to all Local Authorities indicating that nationally the Government expect Council Tax increases to be below 5%. I am delighted to report that the budget now presented proposes a Council Tax increase of only 3.4%, which is below the indicative Council Tax increases of many other Single Tier Councils.

Capital Programme

In addition to investment in Council's revenue schemes the Council plans to invest over £46m on capital projects. The Council is following an active programme of disposing of surplus capital assets to supplement other capital funding sources enabling us to invest in

* Coastal protection

* Education

* Highways and Transport Improvements

* CCTV

* Boscombe Spa Village

* Pavilion

* Hengistbury Head

Conclusion

Since coming to power in May 2003, this Administration has worked tirelessly to reduce the level of Council Tax and also redirect resources to those services valued by residents. Sustainability has been a key consideration in preparing the 2006/7 budget and Medium Term Financial Plan. The Council now needs to approve overall Council Tax including precepts for the Fire and Police Authorities as set out in the report of the Head of Resources. I commend the 2006/07 budget to you.