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Aberdeen City Council Budget 2005/2006

Aberdeen City Council Council
Leader's Budget Speech
10 February 2005

Budget Speech

1. Lord Provost, Members of Aberdeen City Council, I rise to move the Administration's proposals for the 2005/06 Revenue Budget and Non Housing capital Programme. It is necessary to consider both budgets together because under the prudential regime for capital investment we now have more freedoms to determine the level of capital spend, as long as we can contain the capital financing charges in the Revenue Budget.

2. Although this is only our second budget we are now almost half way through the lifetime of this Council under our stewardship. I will be making a full report on progress to the Council meeting in June and I'm sure that you will agree that much progress has been made in delivering the commitments given in the Partnership for Aberdeen policy statement which was adopted by the Council. We have pushed on with

3. This will be a budget for significant change and improvement seeing the completion of major changes to service delivery and bringing the Council to a long term stability. We have come a long way on this journey since 2001 and I want to see it completed by the end of June this year. We are determined to provide slimmed down, more efficient services, cutting out waste where it exists, increasing productivity and making better use of public funds with a smaller organisation but with a well paid, well trained, well supported and well motivated workforce. We are absolutely determined to realise the full potential of these changes for the benefit of the City.

This will mean that we will be well placed to deal with the key challenges which we face.

• First of all the need to respond to our own aspirations and to the Scottish Executive's Efficient Government programme which will lead to expectations of change and of tight budget settlements for 2006/07 and 2007/08.
• The need to push on with the modernisation programme, improving services for the people of Aberdeen
• The need to deal with single status and the related issue of equal pay
• The need to complete our Customer Relations Management Programme for which we are pleased to have been awarded £1 million by the Scottish Executive.
• The need to complete the embedding of our Performance Management System.

All of this draws together and builds on existing good practice and will stand us in good stead for the BV audit which we are looking forward to next year. All of this will be underpinned by

Robust
Evidenced
Managed
Systems

The basic systems will all be in place by the end of June with significant refinement through ICT applications which are currently ongoing being completed thereafter.

Drawing all of this together, we will be launching the next steps in these improvement processes as of April this year and these will coincide with the new financial year.

4. I will place our key budget decisions within this framework. In order to balance the budget a number of savings/income generation proposals require to be made. These are detailed at Appendix 1. There are already some significant policy led "growth" items in the base budget.

My colleagues will pick up and build on the same themes when they announce the detail of the Housing Revenue and Capital Budgets.

5. As of April we will be launching our full Customer First package - Aberdeen Citizens First. This programme will deliver consistent and measurable improvements in local customer services and will improve access to, and the delivery of, the core services, which impact on the everyday lives of the citizens of Aberdeen. It will include:

• The development of a network of one-stop-shops, our face-to-face customer contact points with three new one stop shops being opened across Aberdeen
• The development of a multi-channel contact centre in partnership with Aberdeenshire, Moray and the wider public sector. The first elements of this will be in place during 2005/06 with completion early thereafter
• The adoption of new technologies through which our services can be accessed
• Improved self-service via our website
• Progression of a programme of service redesign and process improvement projects of which I will give more detail later
• The publication of detailed Customer Service Standards and production of a Customer Charter in April 2005
• Service specifications setting out exactly what every citizen can expect from each of our services, and in some cases setting out citizens' responsibilities as well, will be published in June 2005-02-10

We will ensure the integration of all elements of the programme, therefore enabling a more efficient and informed service for our customers.

6. Our staff will receive the support, which they deserve in order to empower them to deliver these improvements. We are therefore committed to investing in our staff through:

• The provision of substantially increased assessment and training
• Improved working environments

We have therefore committed an additional:

• £200K for additional training to cover areas such as:
• •  customer care
  • managing change
  • productivity management
  • general management
  • improving performance
  • project management
  • financial management
• £100K for improved communications
• £250K for improved working areas for our staff and customer reception areas (within the capital progamme)

Other monies for all of these areas are also contained in more general training which we provide , eg for Head Teachers or Social Work Managers and promoted staff in education where specific grant and specific training are provided. I also want the appropriate committees of the Council to be reassured that these elements and any other necessary elements are included in:

• The recruitment criteria for managers' posts of any kind
• The appraisal system for all management posts

7. In order to fund single status which will have a gross cost of £9.0 million in a full year, £4.3 million in 2005/06 and to achieve the required improvements we will implement the following savings:

• BPR/BVR to improve services - £1,085K
• Vacancy Management - £250K
• Employment Costs - £500K

The £500,000 that is identified under this heading is in relation to control of overtime, a review of absence management, and the savings to be accrued from a review of car allowances. The bulk of this money should come from a cost or limitation of the overtime budgets.

• Modernisation and reconfiguration of Services - £2,500K
  The figure of £2.5 million in this item is related to alterations to the provision of services and to appropriate adjustments to the terms and conditions of employment. It is considered that the provision of services on a 7/24 basis together with better flexibility in terms of hours of employment would create an environment in which the working patterns are altered with appropriate adjustments to the salaries of the individuals concerned. This should result in the substantial reduction in the amounts of money paid in, for instance, shift allowances and overtime particularly given the introduction of annualised hours. In addition it is proposed that there should be a shift in the balance of annual leave / public holidays with the majority of public holidays being transferred to annual leave thus reducing employment costs again.

This process clearly links to the negotiations on single status which need to be completed relatively quickly in order to meet the national agreement and to deal with any potential equal pay claims.

We will continue to work closely with our trades unions in an attempt to reach agreement on these matters. The cooperation of our trades unions to date has been critical to the success that we have achieved in modernising services and dealing with single status in relation to specific services (as opposed to comprehensively across the Council). The most widely recognised example of this being the agreement reached with the trades unions which led to the modernisation of the refuse collection service which is now regarded nationally as an example of good practice in terms of productivity, efficiency and safe working practices.

It is our earnest desire that these matters be resolved relatively quickly by reasonable negotiation between trades unions and management representing the Council.

• Severance - £500K
  In line with the overall strategy adopted by Aberdeen City Council and implicit in the Efficient Government Programme slimming down the workforce is in tended to provide additional resources at the front line and therefore the emphasis in the first instance will be on voluntary severance linked to rationalisation in the higher and highest level posts.

8. In addition to these savings, the budget for 2005/06 contains proposals for further savings to be achieve through the completion of unfinished work across a range of services such as:

• Council House Repairs
• Voids Management
• Council House Sales
• Grounds Maintenance
• Management of our Leisure Facilities.

We are determined to see these reviews through to a conclusion. The achievement of best value in service delivery is one of our key priorities and is also a statutory requirement. Therefore it's imperative that we adopt a performance led approach to all our work including these reviews - producing efficiency savings and delivering high quality services. The performance led approach is being rolled out across all Services in a structured manner and will be completed by the end of this year.

9. We will be launching our new comprehensive strategy for the City which focuses primarily on the infrastructure issues both immediate and longer term:

• Immediate:
  City pride
  Gateway improvements at the main entrances to the City
  Replacing and renewing railings
  We will complete the refurbishment and improvement of signage especially tourist signage throughout the town.
• Longer Term:
  Union Street Pedestrian Priority
  Union Square
  Union Square to Union Street and St Nicholas Square via the Green
  West End- Broad Street/George Street
  Castlegate
  Beach
  Regional Sports Centres
  Old Torry
  North and South Esplanades
  Union Terrace Gardens
  To support this we have included £65,000 to provide for two additional planning officers.

5. Can I turn to the thorny issue of the Social Work budget?

The heart of our problem is the under funding by the Scottish Executive of our Social Work Services budgets. This budget has to deal with constantly increasing demands for care services from vulnerable groups in our communities: the young, adults with special needs, the elderly. These demand led pressures change from week to week.

We commissioned a piece of work by Professor Arthur Midwinter which highlighted the funding gap of around £12 million between our Children's Services budget and the GAE allocation.

Because we are spending so much more than GAE for Children's Services, it means that all other budgets are under severe pressure. We have very little room to manoeuvre.

We will continue to lobby the Scottish Executive for a fairer grant settlement for Aberdeen.

We will be conducting a detailed analysis of Social Work commitments and expenditure because it is this area, plus single status costs, which are putting the budget under pressure this year and next. There are reviews ongoing of the staffing structures in the Education Service as well as Social Work Services using a zero based budgeting approach. These will be brought to a conclusion in 2005/06.

In the meantime we have committed an additional £5 million to Social Work including £265,000 for additional staffing in Children's fieldwork, especially child protection.

11. We have maintained a reasonable level of reserves because we realise that this is an aspirational budget and it may be that not all the improvements are possible in the timescale. However, we are determined to see this through with the support of staff and to the great benefit of the people of Aberdeen.

12. Involving People

We have continued to meet our commitment to greater involvement of the public. This will be continuing in the coming year with work on the Western Peripheral Route and the Local Plan and we have committed an additional £50,000 to resource the very successful rolling programme of Neighbourhood planning which we intend to complete by 2005. We will also continue to get feedback through our Citizens Panel.

13. Can I now turn to the Non Housing Capital Programme? The Council on 14 December approved the legally committed and rolling programme of capital works amounting to £27.1million. I have detailed at Appendix 2 the Administration's proposals for additional capital projects amounting to almost £7 million. May I highlight a few of these projects.

• We have allowed £1.4 million for the next phase of the Rubislaw Harlaw Playing Fields and Pavilions Development.
• We have fulfilled our commitment to the Torry Youth Project by allocating £320,000
• £850,000 has been allocated to upgrading the changing facilities at Aulton and Hazlehead and £500,000 to the Grammar School Games Hall Replacement.
• We plan to invest £719,000 in Children's Services accommodation, and a total of £4.9 million for residential care for the elderly over the next three years.
• We are committed to starting work on the major £10 million coastal protection project which has already been considered by Environment and Infrastructure Committee. We aim to submit plans and proposals to the Scottish Executive to attract the 80% coast protection grant which is on offer.
• As I mentioned earlier, we will continue the highly successful Civic Pride Campaign and have committed almost £500,000 for more:
• • Rose planting
  • Improvements to City Entrances
  • Improvements to railings, benches, parks, street furniture
  • Completion of the system of signage throughout the city
• Across the revenue and capital budgets we have increased the expenditure on the long term maintenance of our properties to ensure better long term asset management and to begin to save on short term remedial work.
• We will increase expenditure on roads, pavements and street lamps by a further £500,000

The projects not accepted from the list of Capital Programme Proposals will be reconsidered at the mid-year review stage, and again as part of next year's Capital Planning Process.Finally, we have introduced strict specifications aimed at achieving the highest standards in environmental sustainability in all our building projects, coupled with the desire to see landmark design. We aim to be the UK's leading local authority in this regard and are already well advanced.

14. In conclusion we are looking to a period over the next two years where the people of Aberdeen will see an acceleration of the rate of improvement to our services with savings accruing and with the change process being adequately funded. I want to see our Council, which currently does pretty well by most of the objective external tests, moving to be seen as a centre of excellence. We have the people with the ability and the will to do it - to provide excellent services with low unit costs, high productivity, combining the best of business practices with the public service ethos of which we are rightly proud.

15. In order to balance the budget I am recommending the proposals detailed at Appendices1 and 2. Appendix 3 provides detail of the Energising Aberdeen Board Fund. I am proposing a council tax increase of 4.9% with a Council Tax collection level of 97.6%. Appendix 4 provides details of the proposed Council Tax levels and the water/waste water charges already set by Scottish Water.

At this stage we usually give indicative Council Tax increases for the next two financial years. We know that the Scottish Executive considers that Council Tax increases should be around 2.5% for the next two years. This has been robustly challenged by all local authorities, via COSLA and by many independent financial experts. We require much more information from the Scottish Executive as to their rationale for thinking the 2.5% increases are sustainable.

So at this stage all I can say is that we would hope that Council Tax 2006/07 increases will be no more than 5% and we don't quote any indicative figure for 2007/08 until we get more information from the Scottish Executive.

I move that we approve all details set out in Appendices 1 to 4 in the knowledge that the people of Aberdeen will see that they have a Council, Councillors and staff, who are working hard and making a real and visible difference. I so move.

Kate Dean
Leader of the Council
10 February 2005

Appendix 1
Appendix 2
Budget Proposal Summary