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2014/15 Revenue Budget and Medium Term Financial Strategy – Corporate Overview

2014/15 Revenue Budget and Medium Term Financial Strategy – Corporate Overview. Jane West – Executive Director of Finance & Corporate Governance. How much cash do we get from Central Government in 2014/15 (excluding DSG). Figures not known when producing Select Committee papers.

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2014/15 Revenue Budget and Medium Term Financial Strategy – Corporate Overview

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  1. 2014/15 Revenue Budget and Medium Term Financial Strategy – Corporate Overview Jane West – Executive Director of Finance & Corporate Governance

  2. How much cash do we get from Central Government in 2014/15 (excluding DSG) • Figures not known when producing Select Committee papers. • Provisional figures circulated in July 2013. • Current modelling assumes 2014/15 grant loss of £14m (10% cash – 12.5% real terms). • 2013 Autumn Statement appears to have a neutral impact on 2014/15.

  3. Local Business Rates Retention Scheme • 2014/15 is the second year of the business rates retention scheme. • The system is complex and has many moving parts. • Final guidance not yet issued on how the scheme will operate in 2014/15. • A major concern for LBHF is that £140m of rating appeals are outstanding. Some go back to 2005. • £20m of appeals still relate to Westfield (average reduction 28%).

  4. 2014/15 – Initial Modelling Continued…

  5. 2014/15 – Initial Modelling Continued

  6. Business Rates Retention – Concerns (1) • Authorities gain 30% of collections in excess of the baseline (£193m in illustration) and bear 30% of any shortfall. • Allowance for the impact of rateable value appeals means that LBHF is £15m short of the £193m target. The gross loss to LBHF is £4.5m (30% of £15m). • A safety net applies that restricts the LBHF share of any loss to £4m per annum. Continued….

  7. Business Rates Retention – Concerns (2)…Continued. • The actual level and timing of appeals is uncertain. By assuming LBHF will qualify for the safety net it has adopted a prudent position. • Figures will need to take account of the recent announcement that the business rates multiplier will increase by 2%.

  8. Savings Identified 2014/15 to 2016/17 (£M)

  9. Hammersmith and Fulham Budget Gap (£M)

  10. Budget Assumptions • Pay Inflation – 1% increase • Price Inflation - Only where there are contract agreements • Fees & Charges – Increased in line with RPI (3.3% August) • Pension - Net saving of £0.357m in the Employers Contribution. • Council Tax reduction of 3% in 2014/15

  11. Growth Proposals 2014/15 (£M)

  12. Reasons for Budget Growth 2014/15 (£M)

  13. Identified Savings 2014/15 (£M)

  14. 2014/15 MTFS Savings (£M)

  15. Budget Risks/Balances/Earmarked Reserves • 2014/15 Budget Risks - £14.6m • General Balance – Budget provides for an increase from £18m to £19.1m. • Earmarked Reserves at close of 2012/13 - £59m

  16. Council Debt 1996-2016 (£M)

  17. Band D Council Tax – 2006/07 to 2014/15 (£)

  18. Council Tax Reduction • The 2014/15 Band D charge of £735.16 is the lowest since 1999/2000. • The Band D reduction from 2006/07 is £181.81 • The cash terms reduction from 2006/07 is 20%. • The real terms reduction from 2006/07 is 39%.

  19. LBHF Efficiencies 2006/07 – 2016/17 (£M)

  20. Impact of Local Government Finance Settlement and Other Changes • Local Government Finance Settlement published 18th December. • Net improvement in LBHF for 2014/15 of £1.1m. • Main reason for increase is more New Homes Bonus Grant. • Extra funding likely to be needed to meet cost increases for Concessionary Fares and review of Managed Services.

  21. Finance & Corporate Services Estimates 2014-17 Jane West 28th January 2014

  22. FCS Approach to Finding Efficiencies • Further Tri and Bi borough working • Already in place for areas such as Treasury, Pensions, Insurance, Innovation & Change, Design team, Legal, Social Fund and several Directors’ roles • Further integration planned for Legal, HR, ICT, Managed Services, Procurement, Revenues & Benefits and Customer Services under the Tri-borough Corporate Review • Greater use of self-service for external and internal customers, eg. Smart HR, WCFM and Managed Services internally; H&F Direct’s push on self service via the web and Post Office • Transformational programmes to reduce costs, eg. Agilisys debt collection and tri borough business intelligence

  23. FCS Efficiencies To Date • Between 2009/10 and 2013/14 FCS have delivered savings of nearly £10m • Further efficiencies of £2.4m planned for 2014/15 • A further £2m of efficiencies already identified for 2015/16

  24. FCS 2014/15 Estimates (by %)

  25. FCS 2014/15 Estimates (by value)

  26. QUESTIONS

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