Integrated Plan Proposals 2019/20 – 2022/23 Overview & Scrutiny Committee 11 December 2018 Owen Mapley Director of Resources www.hertfordshire.gov.uk
Integrated Plan 2019/20 to 2022/23 • Matches Council cycle • Allows policies to be developed and delivered BUT • Government’s four year settlement runs to 2019/20 • Social care funding announced to 2019/20 • New spending round (SR19), also Fair Funding Review and Business Rates Retention from April 2020… significant uncertainty www.hertfordshire.gov.uk
Other Funding Changes - Grants HS1 • ASC one-off funding – announcements in Budget 2018 are for one year only - 2019/20; significant winter pressures funding (use to be agreed with NHS partners), and additional social care funding NR1 – offsets social care pressures of £35.8m in next year • iBCF funding • Potential reduction in New Homes Bonus (government review of policy; total funding limited) • Cuts to public health funding www.hertfordshire.gov.uk
Slide 3 HS1 to be expanded on Hazel Stuart, 16/11/18 NR1 in full or as footnote if it is too long Natalie Rotherham, 28/11/18
Other funding changes – Business Rates & Council Tax • Business rates - currently 50% retained locally, 50% to government. Earlier proposals for Councils to retain 100% now revised to 75% retention, effective from 2020. Further guidance and policies to follow. • Council Tax - assume 3% referendum cap in 2019/20 (as previously set out); Social Care Precept will not be increased this year. • 2% for later years (but depends on Fair Funding Review outcomes). www.hertfordshire.gov.uk
Pressures and funding gap (current IP) 2018/19 2019/20 2020/21 2021/22 £m £m £m £m Original Budget 816.974 816.974 816.974 816.974 Technical Adjustments (2.992) (7.646) (9.161) (9.161) Inflation 8.141 24.809 41.343 58.206 Pressures (demography, legislation etc) 46.452 55.057 73.966 89.528 Transition reserve 5.960 0.000 0.000 0.000 Savings (29.742) (45.166) (57.829) (71.174) Further savings required (to close gap) (0.000) (6.593) (22.416) (28.170) Total Revenue Budget 844.793 837.435 842.877 856.203 www.hertfordshire.gov.uk
Extent of HCC Savings Already Delivered Since 2010: • Spending per year constrained by £315m; • Total cumulative savings achieved now approaching £2bn; • New Savings options increasingly hard to identify and deliver. www.hertfordshire.gov.uk 6
Savings outlook Note: Significant worsening in outlook from 2020/21. www.hertfordshire.gov.uk 7
Delivering the IP process.. • Assuming continued reduction in central government funding • Pay inflation increased – pay award assumed at 2% 2019/20 (1% thereafter) • Additional one-off social care funding • Pressures appearing in quarterly Monitor, tracking 2018/19 savings • Early proposals for new savings • Benchmarking www.hertfordshire.gov.uk
Budget 2018 Statement • Business Rates measures – Small retail businesses rates will be cut by a third for two years from April 2019 – Public lavatories will receive 100% business rates relief – There will continue to be £1,500 business rates discount for office space occupied by local newspapers Government have said local authorities will be fully compensated for loss of income as a result of these measures • National Living Wage – increasing to £8.21 per hour from April 2019 • Social Care Funding – one-off funding in 2019/20 – noted in previous slide. • Local roads (potholes) – additional £420m for 2018/19 to tackle potholes, repair damaged roads and invest in bridges www.hertfordshire.gov.uk
Provisional Settlement • Had been expected 6 December; now potentially 12 or 13 December. • Update to be provided at the meeting www.hertfordshire.gov.uk
Capital and other investment • Using HCC assets to support the authorities finances, especially to align with revenue savings required • Further development of Property Company and Joint Venture - Revenue income from rents and investment - Reduced borrowing costs from increased capital receipts • Smart working for effective use of our buildings www.hertfordshire.gov.uk
Next Steps • Proposed IP to Cabinet Panels and Overview & Scrutiny – January / February • For each Portfolio: o Service Strategic Direction statements: - key objectives and programmes - pressures and savings (including impact) - resilience, risk and mitigations o Capital Programme proposals o Concentrated timescale, so Members urged to engage early in the process. www.hertfordshire.gov.uk
Next Steps (2) • Final settlement and council tax/ business rates figures – end January • Integrated Plan approved by County Council – 19th February www.hertfordshire.gov.uk
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