On 3 February we will publish our draft budget for the coming financial year as well as the Medium-Term Financial Plan (MTFP) for the next four years.
Since 2010, we have lost 47% of our grant from Government and over the next four years, it will fall by a further £4.4 million, disappearing altogether by April 2019. Despite these challenges and through prudent financial management, achieving efficiency savings and increasing our income, we will continue to deliver great quality services to residents as well as investment in the city without any cuts to essential services or forced redundancies.
We have kept a significant capital programme and intend to invest £130m over the next four years, including improvement of our housing estates, increasing energy efficiency of our housing stock, purchasing properties to house homeless families, flood alleviation, tower block refurbishment, acquisition of investment property, and investing in community and leisure facilities.
- Net Budget Requirement for 2016/17 is £19.784m rising to £21.207 million at the end of the four year period, for General Fund Services
- Loss of £4.4m in Revenue Support Grant by 2019/20
- Recommended Council tax rise of 1.99% for 2016/17
- Ongoing efficiency savings and increased income of £5m over the next four years.
The Council proposes to increase Council Tax by 1.99% in 2016/17, followed by annual increases of 1.75% (*the amount assumed by the Government in the Financial Settlement). The annual tax bill for a Band D property is £1737.64. From this the City Council will receive £284.52 and the County Council, £1281.64 per annum.
So 16 p in every £1 of Council Tax is spent by the City Council, just £5.47 per week from a Band D council tax bill, an increase of £0.11 per week from last year. The County Council receives £24.65 per week from a Band D council tax bill and is reported to be raising its precept by 3.99%, adding £0.95 per week from last year.
We have been able to manage reductions in revenue grant because of the efficiency savings that we have achieved as well as the increased income. Over the past four years the council has made over £13.7million of savings from efficiencies and increased income, and has also identified another £5 million of efficiencies and increased income over the next four years.
Efficiency savings, increased fees and charges and service reductions already made
- £609k per annum from review of the administrative processes and procedures
- £900k per annum from reviewing assets and increasing our commercial rents and our portfolio, for example, purchasing the lease on St Aldate’s Building, Horspath lease and by co-locating staff from other offices into St Aldate’s
- £300k per annum from investing in high yielding investment vehicles to get higher interest rates
- £600k per annum from renegotiating of our leisure services contract.
Efficiency savings, increased fees and charges and service reductions to be made in the future
Going forward our Medium Term Financial Plan provides for additional savings and increased fees and charges arising from the following areas which will have reduced the council’s budget by around £5 million by the end of the four year period:
- Increased commercial property rental income - £330k per annum
- More staff moving from Horspath to St. Aldates as part of office rationalisation - £200k per annum
- Multi-skilling of staff and increasing productivity - £50k per annum
- By changing the way we do things and getting people to do more online such as registering to vote, housing benefit applications, planning applications, e-billing (paying and receiving bills online - £126k per annum
- Reviewing ICT supplier contracts, telephony project, and changing our main service provider - £220k per annum
- Reductions in posts arising from reducing temporary staff, not replacing fixed term contracts and managed reduction in services due to efficiencies - £490k per annum
- Better procurement of goods and services – increase of £200k per annum
- Leisure services contract savings £400k per annum
- Increased car parking at capacity, Seacourt and Diamond Place – an increase £1.6 million per annum
- Increased net income from trading activity e.g commercial waste collection, building and engineering services to Oxford businesses including the University - £436k
- Senior management restructure - £200k per annum
Our efficiency savings and increased income have enabled us to continue ambitious programme to invest in the city. We are investing £130 million in our capital programme over the next four years. This includes the tower blocks repairs programme, which will improve the energy efficiency of the towers and increase their life by 30 years, and the regeneration of Blackbird Leys and Barton. Building strong, active communities is a key priority of the Council, and in this respect we have just unveiled the £4.2m Rose Hill Community Centre, which opened its doors to the community on 30 January 2016.
Other key capital projects also include:
- Oxpens – earmarked for up to 300 new homes, university facilities, a hotel and business space £6.5 million
- Westgate – £1m investment over two years in infrastructure development and to assist in a £200 million development of the city centre
- Great estates programme - £5m to improve the external environments of council estates
- Plan for regeneration of central Blackbird Leys £5.5 million
- Regeneration of Barton to including building nearly 900 new homes and improved community facilities £56 million
- Improvements to East Oxford community centre
- £47m in refurbishing the five tower blocks and a programme to improve homes to the “Oxford Standard” improving kitchens, bathrooms, security, heating, and in making properties more energy efficient to save people money.
- £1.5m on adaptations to homes to keep people in their homes for longer
- £5m – to purchase homes around the city area to be used for housing homeless families
- £0.5m on leisure centres – continued investment to develop first class accessible facilities for residents
- £5m Horspath Sport Park – reprovision of sports facilities
- Seacourt Park and Ride – expanding parking by more than 600 spaces
- Investing in Reduce the flood risk to 110 properties in Northway and Marston.
- Oxford and Abingdon flood relief scheme – Contribution of £1.5 million by the Council towards £120million scheme to reduce flood risk in Oxford
- Investing £2.7 million in Northway and Marston flood alleviation channel to protect businesses, households and important transport links in the western and southern parts of the city.
Supporting the community and voluntary sector
- We continue to support our communities and invest over £1.5 m in grants to third sector organisations in the city.
- The City Council also continues to fund homelessness prevention services to the tune of £1.4m per year. This support is especially important in the wake of the County Council’s drastic cuts to funding for homelessness.
- As a council we maximise opportunities to obtain external funding that will enable us to innovate and maintain our status as a world-class city. Examples include:
- We obtained £5 million funding from the Big Society for the National Homelessness Property Fund.
- We secured funding from the Oxfordshire LEP (Local Enterprise Partnership) and the Environment Agency for the development of the Marston and Northway Flood Relief Channel.
- The Council was recently awarded £800,000 OLEV funding to further our work in tackling harmful emissions and reduce the cities carbon footprint by installing 100 electric vehicle charging stations in residential streets, the first on-street charging pilot on this scale in the world. Such innovative schemes are behind Oxford’s recent nomination by the European Commission as a finalist in the European Capital of Innovation Award for 2016, alongside continental capitals such as Berlin, Paris and Amsterdam.
- We have also received £142,000 from the Heritage Lottery Fund to develop plans for the museum. If successful we will receive £2.4m to help redevelop the Museum of Oxford with a new high-tech and interactive space to tell the history of Oxford and its people.
We are ambitious for the City and have attracted phenomenal levels of inward investment to the city, creating employment opportunities. Projects such as the redevelopment of Westgate Oxford Shopping Centre will provide 3,400 new jobs as well as 600 jobs a year during the construction phase, while the tower blocks repairs programme will provide at least 90 jobs for people in Oxford.
Deferred capital schemes
The government has confirmed that the New Homes Bonus is set to continue. The Council had originally assumed that this would cease from 2018/19 and there is around £3.7 million of additional income available to the Council in the last two years of the Medium Term Financial Plan. In the Consultation Budget issued in December 2015 the Council deferred around £4m of capital schemes. .Subject to these additional funds being forthcoming these deferred schemes will be brought back into the Councils Capital Programme, albeit slipped back into the last two years of the MTFP
The government’s housing policy changes in the Housing and Planning Bill pose the biggest challenge to the City Council’s housing investment programme. In particular, the reduction in social rents by 1% over the next four years has left a £34m shortfall in the Council’s Housing Revenue Account. We have also set aside £20m as a contingency fund to mitigate the sale of High Value Council Housing. To fund this together with the reduced rental income the Council has reduced its HRA Capital Programme by an amount of £54 million over the next four years.
We are exploring options, including a new Local Housing Company that could provide an alternative model for investment and delivery of homes for those on low and moderate incomes who cannot afford home ownership. This includes a wide range of employees who provide vital functions for the city and community - teachers, nurses, and academics.