Funding the capital

In November, Edinburgh published a draft budget for 2014/15, months before the normal February deadline for deciding the council’s finances. The local authority said it wanted the views and opinions of not only its elected members, but the wider public, before making budget decisions. This new approach meant community groups, business organisations and the third sector could scrutinise the council’s proposed spending and make suggestions, ahead of the final budget decisions which were made last month. This year the local authority needed to save £36m, which meant tough choices had to be made.

City of Edinburgh Council’s finance and budget committee convener, Councillor Alasdair Rankin, said: “Given the financial challenges all local authorities are facing over the next few years, we want to invest in the areas that are essential to Edinburgh and so it is important that the public continue to tell us what is important to them. Last year, we published the draft budget in November ahead of finalising it in February – a new approach designed to ensure we listen to what is important to the public when it comes to allocating money. This year, we published the draft budget even earlier, doubling the length of time available to residents, local and other interest groups to have their say.

“The aim was to get as many people in the city to understand what sort of budget choices we were trying to make. We also wanted their feedback in terms of what they thought about the proposals on the table and if they had any other ideas – this was bearing in mind that whatever was suggested, we still had to make the budget balance. We got the message out through various types of media, to individuals, organisations, to various third-party groups, as well as the business forums and trade unions. We also had residents’ associations and community councils involved in the consultation.

“After this we were able to respond to the concerns raised. The opposition groups in the council came to us with much the same comments as the public, about particular suggestions which we put in the budget. In the end we were able to find savings elsewhere, we reinstated some entirely and some in part. What we are looking to do next year is to consider the consultation process and look at its strengths and weaknesses, and how we can improve it. We’ve got various ideas already in terms of how we can produce a piece of software which will allow people to examine the council’s budget by looking at it in terms of their own priorities and then decide how much they would spend on particular areas, but with limited resources.

“This is the other side of the consultation process which is really important. It’s about showing people objectively what the financial position of the council is and the savings we make.”

The local authority said feedback received helped to make some key decisions and altered where spending cuts were made.

The committee’s vice-convener, Bill Cook, added: “We used the feedback received during the consultation process to help us make many key decisions, such as rejecting proposals to cut funding for people with additional needs and to amend proposals affecting school librarians and new kinship carers. Savings, meanwhile, have been made in areas such as procurement, property rationalisation and improved partnership working, ensuring that we can maintain investment in services for those that need them most.

“As with the previous year, this time we started working on the next budget straight off and that will take us through spring and summer. Part of that is to encourage our officers to get ahead of the game and to look at finances long term. It’s definitely important to get it out for consultation months early. Again, when we got that budget out for consultation last year, we started working on the budget for the following year. That whole business reflects a change in the way we look at finances across the council.”

City of Edinburgh Council’s total revenue budget is £945.3m for 2014/15. Council tax makes up £232.6m of this, with £712.7m coming from government grants and business. This year’s key budget provisions include investing a further £1.164m in the Early Years Change Fund in 2014/15, bringing the total annual funding level to £4.038m, and increasing the number of nursery hours for three and four-year-old children from 475 hours to 600 hours per year. The council will also provide £1m to continue supporting the Edinburgh Guarantee, which works to help improve job opportunities for young people, as well as investing £1.2m of Older People’s Change Fund money to reduce social isolation in communities.

In terms of working more efficiently, Rankin says while the council has a policy of no compulsory redundancies, it will continue to try and work smarter. Some of the aims of the council include implementing internal improvement plans and reducing sickness absence levels to four per cent across the organisation, as well as maximising savings through the rationalisation of the council’s property estate.

Rankin said: “For many years, budgets were rising so the difficult choices weren’t there but as we entered this era, it’s all the more important that people understand what we’re doing and they have the chance to react to our proposals.

“This is the second year in which we’ve been able to avoid making very large reductions in major service areas. We avoided them in two areas in particular we wanted to protect, one was education and the other was health and social care. It was very much about maintaining services to the greatest extent we can. Due to the budgetary constraints, we have to look at how we deliver much more efficiently and that’s something which was being embarked on going back to November last year where we set up the BOLD initiative, which stands for ‘better outcomes through leaner delivery’. We have a group of senior council officers who are working on proposals for the 2015/16 budget, looking at ways in which services can be delivered more efficiently, sometimes in transformational ways, sometimes just through being more efficient in the way work is organised. That’s what we need to do if we’re going to achieve the savings the 2015/16 budget requires us to do.

“There’s no doubt that over time, the number of people the council employs will decline. From the start we’ve had a policy of no compulsory redundancies. We do have a certain turnover of staff every year and that gives us scope to ask questions about whether or not if someone goes, they should be replaced on a one for one basis or if a particular area of work can be reorganised and people can be redeployed within the organisation. Given that so much of the council’s budget is spent on staff salaries, a lot of what the council does is people intensive. We need to employ a lot of people but we have to look at how we can manage that figure down because that’s one way of achieving savings which will enable us to focus on the services.”

Cook added: “It’s worth looking at where the pressures are coming from. We have to contend with inflationary pressures but also demographic pressures. There are more elderly people coming into the system and birth rates are going up. This is something we have to deal with.”