Aberdeen City Council plans for the future with 2017/18 budget

22 February 2017

Aberdeen City Council today (22 February) set its 2017/18 budget and outlined plans for the next phase of its transformation programme.

A balanced budget has been agreed, taking into account the requirement for savings and the need to protect services. The Council is governed by the Local Government Finance Act 1992 and projected expenditure must be matched by income.

A budgeted spend of over £1billion, comprising £295million capital and £734m revenue expenditure, was agreed by elected members at a meeting of the full Council. The meeting agreed recommendations on: General fund revenue and capital investment programme; Housing revenue account and capital investment programme.

Councillors were tasked with addressing a £17.3m shortfall in the revenue budget due to a combination of declining funding from the Scottish Government, increasing demand for services and other cost pressures.

Officers identified a number of options to mitigate that deficit, with a total of £32m of saving and efficiency proposals presented to councillors for consideration. Not all were required to set a balanced budget.

Councillor Jenny Laing, leader of Aberdeen City Council, said: “Despite the financial pressure we are under as a local authority, our ambitions for the city have not altered. Maintaining and improving services is a challenge in the light of the savings that we are being forced to make, but it has to remain our goal. The vision for a better and more prosperous city for all cannot falter, regardless of the stark financial realities.

“With that in mind we have been able to preserve services and facilities that are central to the long term goals, ranging from school music services through to public toilets and much more in between.

“We have also been able to support individuals, families and businesses during a period of great economic challenges for the region by freezing council tax rates. We will also be giving full consideration to this week’s Scottish Government announcement on Non Domestic Rates, with a report due to be brought to the next meeting of the Finance, Policy and Resources committee as we plan next steps.

“Through innovation and forward thinking we have been able to set a budget which will continue the journey of transformation that we are on – improving Aberdeen and providing a springboard for success, both in economic and social terms.

“The physical manifestation of our capital investment can be seen across the city. Aberdeen City Council is working to fulfil the key elements of a Regional Economic Plan that sets out a long term plan for internationalisation, investment, innovation and inclusive economic growth.

“The approach to innovation runs far deeper than that and there is a commitment to changing the way we work to improve the outcomes for businesses and people here in Aberdeen and the region not only through capital projects but in the way we use our revenue budget and deliver services which are central to daily life but also vital to the long term future of our city.

“The budget we have set today, against a very difficult financial backdrop, balances the need to make savings with our duty to protect and enhance services whilst investing in the long term economic strength of the region.”

Key recommendations agreed by elected members at today’s meeting were:

Council Tax: Aberdeen City Council has the authority to increase Council Tax by up to 3% but has chosen to freeze rates. Properties in bands E to H will be subject to an increase in annual bills, due to a change in multipliers being implemented by the Scottish Government; Education: An investment of £927,000 will be made to employ additional pupil support assistants in schools throughout the city; Environment: The Council will prepare a business case in relation to the feasibility of introducing low emission zones throughout the city; Housing: Officers have been instructed to report to full Council in March on the potential to create 2,000 additional council homes; Communities: The budget allocates £826,000 to accelerate the upgrading of playparks throughout the city.

The £240m capital budget includes commitments to a range of key projects, including those within the City Centre Masterplan. These include:

Aberdeen Exhibition and Conference Centre: A £132m sum has been allocated in 2017/18 for the ongoing construction of the new facility; Roads infrastructure: Aberdeen City Council will contribute £12.5m in the forthcoming financial year to the creation of the bypass in addition to £3.25m in 2017/18 for ongoing work on the Berryden Corridor; City Centre Masterplan: Support for the vision will include £11m which has been budgeted for city centre regeneration in 2017/18; Education: Significant investment in the school estate includes £6m for the Centre of Excellence and £9m for the new Stoneywood primary school; Environment: The capital budget includes £4.6m for the next phase of the Energy from Waste project and a £1m investment in waste collection; Digital: A total of £3.5m has been allocated to projects with an emphasis on improving the city’s digital infrastructure.

A number of other options and recommendations were agreed by councillors in respect of the 2017/18 budget, including:

Integration Joint Board: A net budget transfer of £83m to the IJB, to continue delivering the functions delegated to the Aberdeen Health and Social Care Partnership by Aberdeen City Council and NHS Grampian; Local Government Finance Settlement: Accepting the conditions of the 2017/18 settlement; Voluntary severance and early retirement (VSER): A voluntary severance and early retirement programme will be opened up to all employees of Aberdeen City Council as part of the drive to shape the workforce during the ongoing transformation, with a recognition that a more efficient operation will deliver services with fewer people in some areas of operation. Not all applications under the VSER programme will be accepted, with each considered on its own merits.

Recommendations were approved by council based on the current funding settlement information from the Scottish Government. That is subject to confirmation when the Scottish Government budget is set tomorrow (23 February).

The settlement details show a net reduction in funding of £10.3m. This is partially offset by an increase in expected council tax levels due to reform of £5.9m. An expected increase in the council tax base of £1.2m, together with an anticipated reduction in planning income of £850,000, gives a total reduction in income of £4m.