Budgetary advice to partners
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1. Purpose of document
The purpose of this document is to explain to partner organisations how the Council agrees its annual budget, which determines the level of Council Tax. The whole Council is required to take a decision on the budget and Council Tax. This happens in February every year for of the succeeding financial year that starts on 1st April and finishes the following 31st March.
The Council's Corporate Strategy and more importantly the key Top 23 targets drive the officer recommendations on the budget to Members. As the Council's corporate strategy is a four year document the only opportunity for a fundamental review of the Council’s priorities is at the formulation time of this document. (See 2 below)
In practice it is the Executive Committee of the Council that decides what to include and exclude at the annual budget setting; balancing this to the desired level of Council Tax. The Executive recommends the budget proposals to the full Council. However, the process starts much earlier in the previous financial year with the service planning process. (See 3 below)
2. The Council's Corporate Strategy
The Council has elections once every four years. The next election will be in May 2011. In accordance with normal practice, whoever forms the new administration after the elections will draft a new Corporate Strategy for the four year term. The Corporate Strategy will contain the mission, vision and values of the organisation together with specific objectives underpinned by targets and performance indicators. The Corporate Strategy will form the framework for the budget and will direct spending plans. New initiatives that do not support the Council’s Corporate Strategy are unlikely to receive funding.
The process for the Council producing its Corporate Strategy is fairly well defined. During May, April and June it will produce a high level draft that will contain the vision, mission, values and objectives. The Council will then consult on this internally with Senior Officers and externally with key partners who will include Warwickshire County Council, the Police, the Primary Care Trust and the Council for Voluntary Services. Their input will be taken on board both in looking at the draft objectives but also in setting the subsequent targets and performance indicators
3. The service planning process
On an annual basis each of the service areas led by a Head of Service, or in the case of the three specific policy areas (community safety, economic development, equalities and community development) the appropriate policy officer prepares a service plan. Within the plan are proposals for development of the service, as well as potential savings. The developments have to be costed, and demonstrate how any additional resources will improve performance, particularly in relation to the Corporate Strategy and more importantly the key Top indicators.
It would be expected that any bids for additional resources, even if they are to fund external organisations for services would need to be supported by the relevant head of service or policy officer and included in their service plan. As in the case of other bids they would need to demonstrate how they would further the key targets.
The service plans are discussed with the relevant portfolio holder and strategic director.
From October onwards the Council's Corporate Management Team and the portfolio holders review the options for service development, as well as savings. Initially options for consultation are agreed, and consultation is undertaken via the citizens’ panel, rate payer consultation via the Chambers of Commerce, and circulation to the Local Strategic Partnership.
The Executive then agrees on a final package of service changes and consequent level of Council Tax which it recommends to the Council.
4. Resources available for growth and Council Tax capping
The Council prepares financial plans for 4-5 years ahead. These assume that Council Tax increases will be in the order of 4.5%. However 4.5% will only raise approximately £300,000. The Council’s net budget is about £17,000,000. The Council receives about £10,000,000 of Government Grant. The Grant is expected to increase by 0.5% in 2009/10 and 2010/11, increasing by around £50,000 per annum. If inflation is running at 3% this would amount to £500,000. This will leave a gap in the Council's finances having to be met by efficiencies and savings. As a result the room for additional expenditure on things the Council would like to do becomes very limited.
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