Agenda item

This report is a cover report with the detailed appendices to follow

The report was presented to Members by the Service Director, Finance.

The report aims to introduce a new approach to strategic direction. It provides a guide to strategic goals and sets a plan for the future.

The plan will look at the current financial position, refresh the budget gap (a £42m gap persists after the identification of £62m savings).

Also included are:

• Evidence available and summarised data, for funding and changes since February.

• Information about economic trends both nationally and locally.

• Risks, opportunities and threats.

• Factors which must be considered to ensure resilience.

• Principles which must guide prudent expenditure, investment and efficiency savings and grow income and transform services.

The officer noted that an uncertain climate continues and that the figures presented in the financial plan do not make allowances for future issues outside the control of the council.

During the discussion which followed the following points were made:

• The plan will be applied to different areas of the budget to ensure the council is spending prudently, and with flexibility in our contracts. The aim will be to maintain a financially balanced position each year, to deliver on the budget that’s been set.

• In relation to investments the council will look at new investments. Prioritisation metrics will be used to determine expenditure; this should drive efficiencies as the council looks at budgets in these new ways.

• It is intended to review peppercorn rents and to provide a suite of options to the Executive. The intention is to give flexibility and transparency to review these rents and provide more clarity about where subsidies are effectively being given to organisations.

• Start-up grants may be changing to start-up loans.

• With regard to capital programme procurement, going forward the council should take account of maintenance when making investments. Frequently capital programme spending and the revenue budget do not align; in the future a whole life cycle approach will be used. This will enable fully informed decisions to be made about the running costs of an asset as well as the capital cost. There are models available to help provide a full picture of the costs of various assets (such as highways, school buildings etc.) and these will be used to provide better information and may in due course change the approach to the management and maintenance of assets. The objective will be to save unnecessary expense to revenue budgets.

• Social value will also be considered through the social value policy which will be incorporated into the financial plan.

• Savings and benefits may accrue to different budget holders. At present the savings and benefits are not aligned to functions in recognition that a whole system approach is necessary. A silo approach is unhelpful. More detailed work will be taking place to ensure an organisation-wide approach is taken.

• Bristol City Council will need a mix of internal skills and external skills to help take forward this new way of working. Support across the board from Members will be welcome.

• Task and finish groups will be driven by Members. Project Management support will help take this forward. There will be discussion with the Executive to decide how to engage about this.

• Asset base work will be essential to help decisions move forward. Subject to endorsement by Cabinet, it is hoped that Bristol City Council will make a programmed approach through work in the autumn.

• It is expected that Bristol City Council will engage with the West of England Mayor where appropriate. It is most likely to be appropriate with regional infrastructure development. The Executive will determine the level of engagement.

• It will be necessary to work in partnership with other bodies (such as neighbouring local authorities) too.

• Assets are not only one-off physical resources. The council is expected to think creatively, and consider how to deliver a commercial return and improve core service delivery.

• The aim will be to develop a comprehensive asset base, then reduce the idle assets and make them work harder for the council.

• Members will be a provided with a rich and comprehensive database of information on which to make decisions. Disposal of assets can be considered when appropriate.

• Council debt is expected to double, along with interest. Interest rates quoted in the plan are based on current rates. The Council has borrowed in advance following an offer for a reduced rate. Generally, if interest rates go up then then the budget gap will increase.

• The plan outlines the budget gaps. It is necessary to balance the budget.

• It is necessary to take quick action to produce a thorough inventory.

• A strong analysis of the financial situation, encompassing all aspects of the wealth of the Council is essential.

• This is an important piece of work which has been carried out alongside the normal business of the council. It is a positive step and will prompt a vital wider strategy debate.

• The transformation capacity fund had £5m allocated, and a proportion of that will be used to facilitate this work-stream for up to 3 years. Additional resources to deliver these changes are essential.

• By October the intention is to produce detailed factual information to take to consultation.

• Current staff will be supplemented by others to deliver the work-stream as necessary.

• The 2012 asset data base was very comprehensive.

• Human assets are important. The workforce plan will align to strategic direction and it is necessary to right-size the back-office to match front-office service

• Management of change process will happen with redeployment based on skills.

• HR will look at skill sets and matching people to roles to successfully move staff, providing support and training where necessary. This is already happening.

• There is a need to develop a more commercial approach to the use of existing resources.

• The council should consider how to measure value and entrepreneurialism, beyond monetary figures. A cross-cutting approach looking at opportunities will help with these new areas of work. It will be necessary to upskill existing teams in terms of the market.

• The procurement team will need to think about market segmentation and analysis to look at opportunities and drivers and bring information back to the service.

• Culture change in the Council will take time.

• Other Smart City approaches have been examined. There are some quick wins which can be made to help pay for longer-term strategies.

• Opportunities may arise from the operations centre, Bristol Energy, infrastructure projects, the universities, and other areas. The Council should look to link areas of work for the benefit of citizens and the Council.

• There is a need to think creatively, take risks and be analytical about how to help the people we need to support and target.

• There are many complaints from citizens regarding the answering of calls in the call centre. Poor response is too common.

In concluding the discussion the Chair asked for thanks to be conveyed to the team. This is a fundamental piece of work which is in its early stages.