|
Return
to Agenda
Return
to EX7
ITEM EX7 -
ANNEX 1 (a)
EXECUTIVE
– 7 SEPTEMBER 2004
REVENUE
BUDGET AND CAPITAL PROGRAMME 2005/06 – 2007/08
Assumptions
Behind the Published MTFP
Specific
Grants
- The 2004/05 budget
includes specific grants totalling £122m as shown in Annex 1(b). We
currently anticipate that the majority of this will continue but this
needs to be kept under review.
Efficiency
Savings
- The MTFP assumes
that we will make £5m of new cash releasing efficiency savings each
year. In each year the contingency is dependent on making these efficiency
savings.
Income
- £73m income is
included in the 2004/05 budget. This includes £31m of fees and charges
for services, £19m contributions from the Health Authority and £11m
for sales. The remainder relates to reimbursements and contributions
and rents. The level of charges for services will be considered as part
of the Review of Charges report later in the budget process and also
as part of the efficiency savings exercise proposed later in this report.
Formula
Spending Share
- Total formula
grant has been assumed to increase by 6.9% in 2005/06. This is based
on a 5.9% increase in Education FSS, along with a 7.5% increase in children’s
PSS. The increase for other FSS blocks was anticipated to be between
1%-3%.
Inflation
- The MTFP allows
for inflation at 2.5% on pay (excluding schools) and 2.0% on prices.
School budgets, specific items and contracts where above average inflation
applies have been allocated a higher base of 3.0%. Inflation above the
3% base is included in the total £12.8m for policy plans.
- The Consumer Price
Index (CPI) – the government’s target measure for inflation – rose to
1.6% in June 2004, up from 1.5% in May. In the March 2004 Budget Statement
the government said that the 2004/05 rate would be 1.75%, increasing
to 2.0% from 2005/06 onwards.
- The Green Book
pay award has now been agreed for the next three years. The settlement
is for 2.75% from 1 April 2004, and 2.95% from 1 April 2005 and 2006.
The 2006 rates may be subject to the retail price index at October 2005
and may change therefore will be notified nearer the time. It is estimated
that the impact of the shortfall in inflation allocated to pay in 2004/05
is £245k. Directorates have been asked to absorb this pressure in 2004/05,
but there will be an ongoing impact in 2005/06 and beyond, as the published
plan only includes inflation of 2.5% on non – school pay budgets.
Ongoing
2003/04 and 2004/05 Policy Plans
- The forecast allows
for the ongoing effect of the policy plans agreed in 2003/04 and 2004/05.
The £12.8m total breaks down by Directorate as follows:
|
Directorate
|
2003/04
Policy Plans
£m
|
2004/05
Policy Plans (*)
£m
|
Total
£m
|
|
Learning
& Culture
|
-0.1
|
0.8
|
0.7
|
|
Social &
Health Care
|
0.9
|
5.4
|
6.3
|
|
Environment
& Economy
|
1.1
|
0.2
|
1.3
|
|
Community
Safety
|
0.1
|
0.4
|
0.5
|
|
Resources
(including Job Evaluation and Pension Fund Revaluation)
|
3.1
|
0.9
|
4.0
|
|
TOTAL
|
5.1
|
7.7
|
12.8
|
Annex
1(c) sets out the ongoing plans in detail, but the major items are
as follows:
|
Directorate
|
Description
|
Extra
spending in 2005/06
|
|
|
|
£m
|
|
L&C
|
Pupil Numbers:
excess of clawback over-compensation
|
0.8
|
|
S&HC
|
Additional
costs arising from the Homes for Older Persons contract
|
0.9
|
|
S&HC
|
Shortfall
in the access and capacity grant in 2005/6
|
1.0
|
|
S&HC
|
Additional
spending in 2004/5 for adult services funded from one-off measures
|
1.4
|
|
S&HC
|
Abnormal
inflation for older services
|
1.3
|
|
S&HC
|
Extra resources
to increase market capacity for adult services
|
1.7
|
|
E&E
|
Waste management:
additional costs arising from the annual increase in landfill
tax
|
0.8
|
|
Corporate
|
Extra costs
of job evaluation in 2005/6
|
1.8
|
|
Corporate
|
Extra pension
costs following the revaluation of the pension fund
|
2.4
|
Return
to TOP
|