Latest Savings Proposals Continue to Close the Budget Gap

THE latest package of savings and income proposals total £11.25 million and will be considered later this month, as Reading Borough Council continues to close its budget gap.

The Council continues to work hard to protect vital services during the most difficult budget position in its history. Demand for key services is rising at a time of unprecedented cuts in Government funding. In Reading, that funding will have been cut by £57.5 million between 2010 and 2020. 75 pence of every £1 of business rates collected locally now goes to Central Government.

Speaking this week at the annual Local Government Association (LGA) Conference in Birmingham, LGA Chairman Lord Porter warned of a £5.8 billion funding black hole facing all local authorities.

In Reading, more than £70 million in savings have been identified since 2010. The Council continues to provide most services, but is delivering many differently. More savings are required over the next three-year period to fill the budget gap.

A six-month review of future savings options is now complete and £11.25 million of new savings proposals will be considered at a meeting of the Council’s Policy Committee on Monday July 17. They form part of a Medium Term Financial Strategy which focuses on directing as much money as possible to protecting frontline services.

The Strategy runs to 2019/20 and includes the new proposals, as well as a review of previously agreed savings and previous budget assumptions. The full Policy Committee report can be found at: http://www.reading.gov.uk/article/10569/Policy-Committee-17-JULY-2017 (Item 11).

Councillor Jo Lovelock, Reading Borough Council Leader, said:

“The Council continues to protect vital public services wherever possible in the face of unprecedented cuts in Government funding and huge increases in demand for services.  We had to spend an extra £7 million on caring for children at risk for example, and an additional £1 million on caring for vulnerable adults. Protecting the vulnerable remains the priority, but we also want to ensure those services which people use every day are maintained. It is an increasingly difficult balancing act for every local authority.

“Our approach in Reading has been to identify savings by doing things differently. We are continuing to find efficiencies, creating new partnerships which allow us to invest in the town, generating income, making better use of technology to allow residents to self-serve and making the best possible use of Council buildings. Inevitably, we also have to make tough choices about how some services are delivered.

“What every Council needs is clarity on how the new Government intends to fund vital public services going forward. In particular there was no mention of allowing councils to keep their business rates, which has been promised for years. 75% of those business rates currently has to be paid into Central Government. This was completely overlooked in the Queen’s Speech, and this week the LGA Chairman Lord Porter spelt out the size of the challenge facing every Council across the country.

“In the meantime Local Government continues to absorb the huge pressures facing public services which our communities rely on. For as long as a fair and realistic system of funding is ignored, Councils will continue to have to make difficult decisions on services. The package of new savings being considered later this month is just another round of the tough choices being made.”

In order to provide a realistic Medium Term Financial Strategy for the next three-year period, Council officers have reviewed previous budget savings in terms of deliverability, and carried out a review of previous assumptions on issues like the council tax base, interest rates and inflation.

Of the £11.251m of new savings proposals being considered by Policy Committee, some are categorised as management action, which means they can be implemented straight away, and some will require individual consultations to be carried out before being implemented. Others are at an early stage of development and will require more detail on implications and feasibility.

The Medium Term Financial Strategy concludes that the Council can produce a balanced budget in 2017/18 and 2018/19, with much less use of reserves than was planned in February this year. Further savings options will need to be developed to fill the budget gap in 2019/20. More savings options are likely to return to Policy Committee in the Autumn.

Despite the financial challenge, the Council believes it remains important to continue to invest in Reading. The Council is taking every opportunity to bid for external funding streams to enable investment. This external funding is very different from the day-to-day money (known as the Revenue Budget) the Council uses to balance the budget.

Where the Council successfully bids for external funding, it is ring-fenced money that can only be spent on the specific projects bid for. It cannot be used to fund or subsidise day-to-day Council services.

Recent examples this external ring-fenced funding which enables investment in key infrastructure, include a productive partnership with the Thames Valley Local Enterprise Partnership to build dedicated bus lanes for key commuter routes like the A33, and the proposed new bus, pedestrian and cycle route from East Reading to the Town Centre.

Similarly, working in partnership with the Heritage Lottery Fund, next Summer the Council will open up the historic Abbey Quarter to the public, creating a major new visitor attraction as part of the Council’s ‘Reading Abbey Revealed’ project. The Council also hopes to team up with a private sector leisure provider to invest in new sports and leisure facilities, including two new swimming pools.

The Council is also finding creative ways to fund much-needed new affordable housing. As part an ambition to build more affordable Council housing, around 150 new units are either delivered or on the way, including at Cedar Court, Whitley Rise, Conwy Close and Lowfield Road. Plans for an additional 100 are also in the pipeline. A Council-owned housing company has also been set up to buy properties to rent in the private sector. In due course some of these will be used to place families who would otherwise be living in expensive temporary accommodation.

Notes To Editors:

Increased demands on Council Services in Reading:

    • Population: The latest Census in 2011 showed number of residents increased by 9% since 2001 to 159,200 people. The latest figure from ONS for 2015 is 161,739. The population is forecast to increase by a further 24% by 2050, to 193,056 residents. This growth, whilst welcomed, has an impact on Council services.
    • Caring for older people: Reading’s population is ageing in line with the national picture. The forecast change in those aged over 65 is 9% by 2020. By 2020, the Council predicts that 25% of people who pay for their own care are likely to have run out of funds and will therefore be eligible to have their care paid for by the Council.
    • Caring for vulnerable children: In line with the national upwards trend in demand. The council has 1,891 open cases within Children’s Social Care. Of this the Council is caring for 274 looked after children, and providing support and protection to a further 366.
    • Providing more school places: The Council has recently completed a £61 million expansion programme aimed at creating more than 2,500 extra primary school places across the borough to cope with rising demand for school places.
    • Waste collections: The latest number of households in Reading is now over 70,800. The general rise in population across Reading means more refuse to collect and higher waste disposal costs for the Council.

Reading Borough Council has identified £70 million of savings and income generation since 2010. Measures so far include:

  • Making the difficult decision to close Arthur Hill Pool in east Reading ahead of seeking a partner to replace it with modern and less expensive-to-run facilities
  • Introducing an annual charge for green bin collections and residents first parking permits from April 2017. While these are new to Reading, they are charges which many other councils introduced years ago
  • Reviewing high cost care packages for vulnerable people by promoting independence
  • Cutting library hours
  • Reducing Council funding to the town’s voluntary and community sector
  • Making better use of technology, re-organising services so they are more efficient and making the best possible use of buildings
  • Closing the expensive-to-run Civic Centre and moving into the refurbished and cheaper Civic Offices building