Cambridgeshire budget, Stoke hires PwC, School funding gap, Falkirk TIF, New Homes Bonus

Written on:August 28, 2014
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Municipal councils ‘lose under New Homes Bonus’
The New Homes Bonus is benefitting wealthy councils in the South East of England at the expense of more deprived areas, according to the Special Interest Group of Municipal Authorities. SIGOMA said that its members were set to lose more than £453m through implementation of the policy by 2015/16, while councils in the South East are set to gain £271m. North East councils will lose an average of £40 per head, with the figure £30 for authorities in the North West, it claimed.

Cambridgeshire asks residents for budget input
Cambridgeshire County Council is asking for residents to help it set its budget for 2015/16. Due to increased demand and inflation coupled with cuts in funding from central government, the council’s current business plan sets out the need to save £149.1m over the next five years, with £30.7m earmarked for next year. Residents will be surveyed online and face-to-face for their suggestions, and attitude to paying more council tax.

PwC hired to reduce Stoke’s spending
Stoke-on-Trent City Council has hired consultancy PricewaterhosueCoopers to help it deliver savings of up to £14m. The firm will be rewarded on a payment by results basis, receiving £1 for every £8 their proposals save the authority. PwC has identified savings of between £5.5m in two business plans prepared during an initial consultancy period.

Councils in £950m waste deal
Derby City and Derbyshire County Councils have signed an agreement with a joint venture to build and operate a waste treatment facility. The deal, worth £950m was signed with the Interserve and Shanks Group vehicle. The facility is expected to be completed by April 2017, when Shanks and Interserve will each inject £18m of subordinated debt into the special purpose vehicle.

Falkirk submits TIF business case
Falkirk Council has finalised the business case for its proposed tax incremental scheme, and will now submit it to the Scottish Government for approval. The business case says that the TIF could see £25.71m out of £43.1m invested through prudential borrowing. The council estimates that returns from business rates would see a cash surplus by year 25, which would be shared between the council and the Scottish Government.

Councils forced to plug school places funding gap
Councils are having to make cuts in building projects, school maintenance and other budgets in order to plug a black hole of £1bn in government funding for school places, according to the Local Government Association. The LGA asked councils if cash provided by the Department for Education had met the full cost of providing school places between 2011/12 and 2016/17. Some 77% of respondents said the money had not been enough.

Authorities urged to make savings on child care budgets
Councils with higher than average spending on children in care should examine whether they can reduce the amount, according to the Audit Commission.  A report by the commission found significant variation in the amount councils spend on each looked after child. In 2012/13, 21 councils spent less than £40,000 per child and 32 councils spent more than £60,000 per child. If higher spending councils had been able to reduce their spending to that of the remaining three quarters of councils in their comparator group, total spending would have reduced by £84 million, the commission said.

Council reserves increase by almost 10%

Written on:August 28, 2014

Councils in England increased their reserves by 9.7% last year, taking the total held to £23.7bn. The increase, shown in the release of provisional outturn data for councils covering 2013/14 follows a rise of £2.6bn during 2012/13. According to the statistics, £0.3bn of the total rise for last year was added by the Greater London Authority. The document said: “In 2013/14, 367 local authorities in England increased their reserve levels,…

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Growing together: the case for group outsourcing

Written on:August 28, 2014

Steve Bishop is strategic director for South Oxfordshire and Vale of White Horse District Councils. This article was originally published in Issue 4 of Room151 Quarterly magazine.  South Oxfordshire (South) and Vale of White Horse (Vale) district councils are well versed in  the practice of outsourcing services. We haven’t taken the big leap that some of our colleagues  have towards being a fully commissioning  council but, looking at the numbers, we’re  currently about…

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Benn reignites equalisation debate

Written on:August 27, 2014

Hilary Benn has pledged to change the mechanism for allocating central government grant funding to local authorities if the Labour party is elected to power next year. In a statement, Benn called the distribution of the coalition government’s cuts “unfair and unjustified”, citing figures showing wild variations between grant reductions received by different councils. The figures show that councils in the 10 most deprived areas of England are losing £782…

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No good excuses for the decline in inflation, says Draghi

Written on:August 27, 2014

ECB chief Mario Draghi gave a big speech at Jackson Hole, Wyoming on Friday. There were two big ideas to come out of the speech: • The first is that the ECB will do more to halt falling inflation. • The other is that the ECB probably can’t do it on its own, and that the destructive effects of austerity (fiscal policy outside the direct control of the ECB) need…

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West Sussex £1.2bn investment contract open to other councils

Written on:August 21, 2014

West Sussex County Council is seeking a fund manager for a £1.2bn portfolio of investments, and is planning to open the contract to fellow county councils. The council has published a prior information notice under European Union rules, seeking a balanced fund manager for the portfolio currently managed by Baille Gifford. The manager will work alongside UBS, which manages around £1bn of the council’s £2.2bn balanced portfolio. The notice said: “West…

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CEO steps down amid investigation, Talent bank initiative, Capita launches self-build scheme…

Written on:August 21, 2014

Chief executive steps down amid new probe Bryn Parry-Jones has stepped down as chief executive of Pembrokeshire CC with immediate effect. The news comes after it was revealed that the police have launched a fresh investigation into payments made by the council in lieu of employer pension contributions. The Wales Audit Office ruled the payments were unlawful but an original police investigation found no evidence of wrongdoing. Thurrock benefits from…

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Q&A with Bernard Hayes

Written on:August 21, 2014

Bernard Hayes is deputy chief executive and section 151 officer at Preston Borough Council. He tells us about a new loan fund for charities, as well as the challenges he faces in his job. Room 151: Tell us about your loan fund… Bernard Hayes: The council is moving £500,000 of its cash reserves into a fund to provide loans to community interest companies and charities in the city. We are aiming…

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Bank downgrades likely, says S&P report

Written on:August 21, 2014

Credit ratings on the biggest banks in Western Europe and USA are likely to be downgraded due to the withdrawal of government bail-out support, according to ratings agency Standard & Poors. A report released by the agency this week said that the most systemically important banks (SIBs) in Europe, as well as eight in the USA, have negative outlooks due to the withdrawal of government crisis support. The conclusion reflects…

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Steve Mason: Borrowing power

Written on:August 19, 2014

A loan of £114m was agreed earlier this year from Northumberland County Council to Northumbria NHS Trust. Steve Mason, the council’s lead executive director, explains how it came about. This article was originally published in Room151 Quarterly magazine.  Trust, stability and a positive working relationship built up over a number of years – if you’re asking me what the cornerstones of the council proceeding with this loan were, these traits…

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