Up to 100 council jobs at risk as Revenue Budget Update and Savings Programme approved by Budget Cabinet

Up to 100 jobs are at risk after the Council's Budget Cabinet approved the Revenue Budget Update and Savings Programme at Thursday’s (14 September) Budget Cabinet meeting.

The news comes after the Council has had £33 million slashed from the budget over the next three years.

https://www.rochdaleonline.co.uk/news-features/2/news-headlines/112330/rochdale-borough-council-faces-more-cuts-as-33-million-slashed

A reduction in the number of established posts within the Council, depending on the outcome of consultation and final decisions, made the total number of jobs affected during the budget setting process likely to be below 100.

However, the Council is preparing to comply with the statutory minimum consultation period of 45 days (which is required where there is to be 100 or more redundancies as opposed to the 30 days required when 20 to 99 redundancies).

If there is a genuine redundancy situation the Council will need to follow a fair procedure. It is anticipated that there will be consultation obligations with the trade unions before a decision on whether to make redundancies is made.

In the event that any employee who is on maternity leave is selected for redundancy then they should be given priority for any suitable alternative employment.

The proposals will be going out for consultation between 18 September and 1 November 2017.

Leader of the Council, Councillor Richard Farnell commented: "People are at breaking point. Because of the pay freeze and rises that are lower than inflation, there comes a point where people can not take any more.

"We do not need to ask the Government for more money, but a fair distribution on grant money. We would be far better off; it's blatantly and plainly unfair. The Government need to recognise there are poor areas that need help.

"We have made protests year on year to them that have fallen on deaf ears."

Revenue Budget 2018/19 to 2020/21

This report, based on current information following the Spring Budget 2017 and Queen’s Speech, provides an update on the Council’s revenue budget position for 2018/19 to 2020/21.

In March 2017, the Council set a three-year budget for 2017/18 to 2019/20. This budget identified a budget gap of £9.9m in 2018/19 and £5.5m in 2019/20. Based on the current assumptions the estimated budget gap has been revised to £15.9m in 2018/19; £8.0m in 2019/20; and £9.6m in 2020/21.

This will have potential implications for Council funding, noting these may be reductions or increases.

The latest economic surveys indicate that: 

• Inflation continues to rise, currently forecast at 2.6% and likely to rise to 3% by the end of the year. On this basis the Bank of England has updated its forecast for inflation from 2% in 2017 to 3% by the end of the year.
• Pay rises, however, continue to lag behind inflation at less than 2%.
• The economy is growing below the forecast set by Central Government in the Spring Budget 2017. Growth is currently 1.6%, 0.4% below the Spring Budget forecast of 2%.
• Growth forecasts for 2018 also indicate a decline from the Spring Budget down 0.2% from 1.6% to 1.4%.

At a local level, these economic indicators highlight a continuation in the gap between the cost of living and pay rises as inflation and energy costs continue to grow faster than wages. This is likely to continue the trend of rising household debt levels and additional pressures on local welfare services

A downturn in economic growth may impact on central government revenues which could have implications for Local Government funding settlements particularly if the demands for increased funding for Health services remain a priority for the Government.

Updated information from Central Government will become available following the Autumn Budget on 22 November and Provisional 2018/19 Local Government Finance Settlement which will be published November/ December 2017.

Savings Programme 2018/19 to 2020/21 

Saving Proposals are classified as follows:

• Saving proposals not requiring service consultation.
• Workforce proposals.

The reductions with no service delivery or workforce implications do not require consultation. These proposals generate on going savings of £1.301m in 2018/19 and a further £0.401m in 2019/20. Saving proposals with workforce implications totaling £0.140m in 2018/19 will be subject to consultation with staff and trade unions from the 18 September 2017.

From 2018/19 the Local Authority will be moving into a formal pooled budget arrangement for health and social care. Greater Manchester is moving towards taking full control and responsibility of the £6bn Health & Social Care Budget and the creation of its own sustainable Health & Social Care system by 2021.

To deliver the devolved health and social care initiative, a Greater Manchester Strategic Plan has been developed and each local area sets out a Locality plan to support this Strategic Plan focussing on the integration of health, social care and public health/prevention.

The integration of services is key to improving the quality of care and outcomes for people within the funding available. The pooling of resources across the locality will provide more opportunities to explore value for money, economies of scale, reduce duplication and streamline processes. The pooled budget brings together resources from a range of organisations including the Clinical Commissioning Group and the Local Authority, Better Care Funds and GM level resources to invest in transformation of service delivery, (known as Transformation Funding).

The Pooled Budget is required to be operational by 2018/19.

The savings proposals currently identified for Health and Social Care are therefore subject to consideration and agreement as to the risk sharing basis being considered by Cabinet on the 24 October.

However, the 2018/19 – 2020/21 savings proposals include a number of savings proposals which are to be delivered through the efficiencies of integration. The budget gap and savings proposals have therefore been split to identify the budget gap and savings proposals attributable to the Locality Plan and those to be met from all non-locality services.

The Locality Plan covers Council services such as Adult Social Care, Public Health and elements of Children’s Services. Non-locality Services include Economy, Neighbourhoods, Resources and Wellbeing.

£13.465m of the budget gap is attributable to the Locality Plan services and that savings have been identified of £11.269m to bridge this budget gap, leaving an in-year budget gap of £2.196m attributable to Health and Social Care.

The Transformation Fund benefits and savings required to be delivered by the Pool Budget in relation to Health and Social Care Integration generate one-off savings of £10.933m in 2018/19, £14.182m in 2019/20 and £25.260m in 2020/21.

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