A-Z of Services

Budget Book for 2011/12

This page provides information about the Wrexham County Borough Council budget book for 2011/12, which includes revenue spending proposals of each of the services of the County Borough Council for the financial year.

Copies of the detailed budget book are available in your local library.

The following information provides a summary of the 2011/2012 budget:

1. The local authority budget planning process in Wrexham, as elsewhere, requires an early view to be taken about the Council’s budget prospects based on national economic indicators and government planning totals for local authority spending.

2. The budget planning process for 2011/12 was agreed and a review of the Council’s financial prospects were considered by the Council’s Executive Board in June 2010. In view of the anticipated significant spending reductions over the medium term service reviews, which involved each service undertaking a strategic review of their operations, took place during the period to July 2010. The service reviews identified savings which were challenged by the Council’s Transformation Programme team and Lead Members.

3. The medium term financial plans have been developed using the following parameters:

An assumed reduction in grant funding of 1.2% in 2011-12 followed by increases of 0.24% and 1.3% in 2012-13 and 2013-14 respectively.
Estimated inflation assumptions:
- teachers’ pay award of 1% for 2011-12, 0% for 2012-13 and 1.5% for 2013-14.
- non-teachers’ pay award of 0% for 2011-12 and 2012-13, 1.5% for 2013-14.
- price increases of around 2.5% for 2011-12, 3% for 2012-13 and 2013-14.
That the unhypothecated Outcome Agreement grant will be received in all three years.
Known unavoidable commitments.

4. The medium term financial plan will be reviewed on a periodic basis.

back to the top of page

Review of the Current Year 2010/11

5. The budget for the year was cash limited at £208,296,174.

6. The budget has been closely monitored and controlled during the year in accordance with the procedures approved by Council. A number of service pressures and increased costs were identified early in the financial year and it was agreed by the Executive Board that action should be taken by officers to control spending and to keep service spending within the approved cash limited budget totals.

7. All budgets will continue to be carefully scrutinised in accordance with the agreed procedures and the actual outturn will be reported in the summer. In accordance with the rules of cash limited budgeting, any over or underspending may be carried forward to 2011/12.

back to the top of page

Welsh Assembly Government (WAG) Revenue Settlement

8. The grant allocation for individual authorities is dependant on the standard spending assessment (SSA) formula. For 2011/12 there are no significant changes to the formula.

9. The WAG announced its provisional revenue settlement details for local authorities on 23 November 2010. The provisional settlement gave local authorities on average a 1.4% grant decrease, which was slightly better than anticipated. WAG announced its final revenue settlement for 2011/12 on 2 February 2010 and was broadly unchanged on the provisional settlement.

10. The Local Government Finance Act 1992 gives the Minister for Social Justice and Local Government, power to limit or cap the budget requirement of any local authority, which he considers to be excessive. The Minister has made no announcement relating to assumptions about the Council’s spending level for 2011/12. The Council’s standard spending assessment, the notional assessment for grant distribution purposes of the Council’s need to spend on its services, totalled £210,172,950.

back to the top of page

2011/12 Budget

11. The budget for next year as outlined on page (vi) has been built up in accordance with the framework agreed by Council. The budget in the current year (i.e. the cash limited budget amended for the transfers of grants into the Revenue Support grant) has been adjusted for the cost of inflation, unavoidable commitments and savings.

12. The total net revenue expenditure is estimated at £208,608,688 and represents a reduction of £302,615 (0.16%) of the current year’s adjusted net revenue budget. Page (vi) also demonstrates the Council’s budget requirement at £207,237,342.

13. It is a requirement of the Local Government Act 2003 that I should report to members on the robustness of the estimates made for the purpose of calculating the net budget requirement. I should therefore draw your attention to a number of key risk areas that I have identified in the budget and how these may be managed. These are outlined on page 19. Issues relating to these key risks will be reported to members during the forthcoming year as necessary as part of the budget monitoring and control procedures.

Reserves and Balances

14. A local authority requires a prudent level of working balances to maintain adequate cash flow, especially during the first part of the financial year prior to the receipt of council tax income, and to meet unforeseen expenditure.

15. There are no planned contributions to balances for 2011/12. However, I am satisfied that the level of balances and reserves is adequate for the forthcoming financial year and the authority’s medium term financial strategy.

16. There is still uncertainty on the impact of energy inflation costs on the Council’s budget.

17. An analysis of the Council’s key estimated earmarked reserves and balances for the year ahead is as follows:

	Actual Balance at 1 April 2010 £k	Estimated Balance at 1 April 2011 £k	Movement in Year £k	Estimated Balance at 31 March 2012 £k
Council Fund Balance	7,018	7,435		7,435
School Balances	948	526		526
Service Reserves	590	477	(336)	141
Other Earmarked Reserves	11,684	10,827	(618)	10,209
Total Balances and Reserves	20,240	19,265	(954)	18,311

18. The estimated balances at 1 April 2010 in the table above are based on the best estimates available at the time of writing the report. The movement in the Council Fund balance includes the reported position in the current year. The reported position will change following the closure of the 2010/11 accounts and will be reported to members as part of the outturn report after the end of the financial year. Of the 2011/12 in year planned movement on service reserves of £336k none will be used to fund recurrent expenditure.

19. The above analysis does not assume any use of general balances for back pay liabilities following the Single Status and Equal Pay review. If these or any other liabilities exceeded the earmarked allocations then clearly these general balances would be called on.

Income

20. Revenue Income Support Grant – The County Borough’s share of the final Revenue Support Grant has been set at £129,777,826.

21. Business Rates – The Assembly has set the business rate poundage for 2011/12 at 42.8p in the £. The County Borough’s share of national non-domestic rate income in 2011/12 is £31,360,804.

22. Outcome Agreement Grant – This grant has been distributed to all local authorities on the basis of current standard spending assessments and this Council’s share is £1,291,346.

23. In total the Council will receive general grants from the WAG of £162,429,976.

back to the top of page

Council Tax

24. After taking account of the general grants and contribution from balances, the balance of net expenditure totalling £46,178,712 remains to be funded by council taxpayers.

25. It is proposed to charge as a special expense part of the cost of footway lighting to the four community areas within the town (£4.13 at band D).

26. After adjusting for special expenses of £66,425 the balance to be found as general expenses from council taxpayers is £46,112,287.

27. The council tax base calculation was agreed by the Executive Board on 17 November 2009 for 2010/11, as 51,880 band D equivalent properties after allowing for:

band reductions for the disabled
exempt properties
single occupier discounts
double discounts on unoccupied properties
factors to reflect the relative charge at different bands
the estimated collection rate
contributions in lieu from Ministry of Defence

The overall tax base is built up from the same calculations for each of the 34 community areas and the “band D equivalents” are shown on page (vii).

28. Dividing the balance of net expenditure (£46,178,712) by the tax base of 51,880 will give a £890.11 charge to be borne by a full-paying household whose home is valued at band D. For band A property the charge is six ninths of this figure through to band I properties where the charge is twenty one ninths of the band D figure. In many cases these figures will be adjusted for disabled and other discounts and, of course, for council tax benefit.

29. Page (vii) sets out the council tax rate for the band D taxpayer for each community council area and shows that when the police authority’s precept is included, the total average council tax at band D for 2011/12 is £1,135.42.

Conclusion

30. Although the financial settlement for 2011/12 has meant a reduction in the Council’s overall budget for 2011/12, every effort has been made to protect social care services and schools.

31. The Local Government Act 2003 requires the Council to monitor its budget and to take appropriate action. The budget will therefore require close monitoring and control during the year and the financial position will need to be kept continuously under review.

32. Finally, I remain very grateful to all Members and Officers for their assistance, cooperation and hard work in helping to prepare this budget.

M S Owen
Chief Finance and Performance Officer

back to the top of page

Service Reporting Code of Practice for Local Authorities

1. The cash limited budgets in column (j) on page (vi) have been recast to comply with the Service Reporting Code of Practice for Local Authorities (SeRCOP). This has a particular impact on central costs and support services.

2. Both central and departmental support costs have had to be fully recharged to the services which they support. This is reflected in the addition of column (k) on page (vi) and in the body of the budget pages.

3. It should be noted that Legal & Democratic, Human Resources, Finance & Performance, Information Systems, Repairs & Maintenance and Property Consultancy / Asset Management / School Transportation within Transport & Asset Management are fully recharged and show net budgets of nil.

4. As part of the Code, the central costs have been re-arranged into:

Corporate & Democratic Core (including Democratic Representation & Management and Corporate Management)
Non Distributed Costs (including Past Service Costs and costs associated with unused shares of IT facilities)
Central Services to the Public (including Council Tax collection costs, Coroners, Electoral Registration etc.)
Other Operating Income & Expenditure (including levies from other bodies and capital financing).

5. Obviously, these are extremely significant changes but the underlying spending power of services remains exactly as approved by Council. One of the primary purposes of the change is to permit greater inter-authority comparability in the future.

Wrexham County Borough Council 2011/12 Budget