http://admin.1fife.org.uk/uploadfiles/publications/c64_Item04-CapitalPlanReview-PFAM16-06-11.pdf
There is no doubt that the Council faces significant financial challenges over the coming years. We recognise and appreciate the hard work undertaken by officers to prepare financial estimates for the future capital programme and proposals to close the possible funding gap that the Council might face over the next 8-10 years. The fact remains that we are still in a position of considerable uncertainty.
The Scottish Government has yet to produce any firm proposals for the Local Government Financial Settlement beyond 2011/12. There are likely to be significant changes in the organisational structures of public services, not least proposals to reorganise the structure of the police service at a national level, which could have far reaching consequences for the financial position of Fife Council Uncertainties in property market mean it is difficult to estimate accurately the likely income from the sale of assets over the period of the capital plan. There are uncertainties surrounding the future constitutional position of Scotland that are likely to affect public finances, regardless of the result of any referendum on full independence.
Fife Labour Group has campaigned over a number of years for significant borrowing powers to be devolved to the Scottish Parliament, and that these should be in addition to the current borrowing powers of Scottish local authorities and other parts of the public sector. Such changes could result in a substantial amount of additional capital finance becoming available to the Scottish public sector over the next few years and this could be to the benefit of Fife Council, although the Council might also see a negative impact depending on the nature of these changes and on decisions taken by the UK and Scottish Governments.
Whatever the outcome and impact of changes such as these, the Council will require to re-visit its capital plan again within the next 1-2 years. Regardless of these changes at national level, Labour in Fife has argued over the past 4 years that there are major areas of Council service delivery that need to be reviewed and where significant improvements in efficiency and effectiveness can be made, which should result in financial savings for re-investment in service improvements.
Labour accepts that it would be prudent to review the Council’s capital programme now so that the Council is in a position to adjust its finances to meet the predicted funding gap should it arise. But we also argue that part of the Council’s response should be to initiate a number of major efficiency and effectiveness reviews of Council services to reduce the requirement for capital finance, or indeed to free up additional revenue funding to support further capital investment. Further work is also needed to assess the impact of some of the emerging needs that have been identified by Services, and this is another area of uncertainty.
In reviewing the current capital plan, there are also a number of significant policy differences between Labour and the current SNP/Libdem Administration that we would propose are reflected in the revised programme.
Firstly, Labour is in favour of retaining a mixed provision and fuller choice of residential care for the elderly in Fife. To that end we propose to retain a significant element of capital funding to support the replacement and refurbishment of the Council’s residential care homes. We believe that the costs for building new homes have been over-estimated by the current Administration. More importantly Labour would seek to bring in additional finance through the means of care co-operatives and partnerships with the not-for-profit sector, which would allow the Council to retain close scrutiny of standards of care in its homes and to maintain the level of training, terms and conditions of care staff, believing that this attracts and retains good staff which is fundamental to the welfare of users of these services. We therefore propose to retain an allocation of £20m within the capital plan to part fund the replacement and refurbishment of the Council’s residential homes which together with the sum identified to meet emerging needs arising from the delay in replacement cause by the recent decisions of the Administration, brings the total requirement within the plan to £24m.
Secondly, Labour recognises the importance of supporting strong and vibrant local communities, not just in the major population centres, but in the towns and villages throughout Fife. In contrast to the current Administration that is seeking to sell off and dispose of significant assets with little reference to the needs and wishes of local communities, Labour will establish a Community Investment Fund of £5m for the improvement of local centres and facilities and to support the transfer of such facilities to local communities in a viable and sustainable way, where this is the wish of the communities. We are confident that additional funding can be brought in on the back of this investment. Labour will not simply sell these assets off to the highest bidder where this isn’t in the interests of the local communities that use them, nor will it simply transfer the problem across to local communities themselves unless they have the desire and capacity to take on these assets. Furthermore, we propose to institute a major review of community assets across Fife, focusing not just on the narrow objectives of the Council and its own properties, but assessing the full range of needs and assets within individual local communities, the condition and investment requirements of community assets, and the desire and capacity of local communities to work in partnership with the Council.
In addition to these two major commitments, Labour believes that major reviews are required in three other areas of operation. These are the School Estate, the Council’s Transport Fleet and IT.
It is vital that Fife’s schools are fit for purpose and there are a variety of property issues that need to be addressed as evidenced by the range of different pockets of funding directed towards the school estate in the current capital plan and identified in both savings and emerging needs proposals put forward by officers. Survey work to determine the extent of some of these problems is still underway and it is unclear whether there may be further opportunities to draw down additional funding through such mechanisms as the Scottish Futures Trust in years to come. The proposal to fund a new secondary school for East Kirkcaldy partly through developer’s contributions also needs to be examined as part of this review. This review of the school estate needs to go hand in hand with the ongoing reviews of catchment areas and the implications of changing school rolls. At this stage, Labour would propose to broadly retain the global sum committed to the school estate in the current programme pending the emerging outcomes of this long term review.
The Council has a significant element of funding committed to replacement of its transport fleet and equipment. We recognise that commitments have been made and replacements planned in the early years of the capital programme, but Labour is convinced that with changes in the operational practice of Services to improve efficiency of transport usage, planned reductions in the workforce and improvements and innovations in vehicles themselves, substantial savings can be made in fleet costs in the latter years of the programme. We therefore propose to reduce the overall allocation for fleet costs from £57m to £50m across the life of the plan. This will be based on major reviews of procurement and the operational practices of Services in relation to fleet usage. It may be that this total will increase by using efficiency savings to re-invest in additional capital expenditure.
Similarly we believe that significant changes in IT practices and procurement are required in future years that could substantially reduce the direct capital requirement within the programme. Officers have already questioned the future requirement for a dedicated data centre and Labour believes that a baseline review of future IT strategy and capital requirements is needed that goes significantly beyond the scope of the IT strategy proposed in another report to this meeting of PFAM. Proposed savings of £5.637m are suggested by officers, offset by additional expenditure on emerging needs of £3.906m, giving a net saving of £1.731m on IT. We propose to increase the saving to almost £7m, reducing the capital provision for IT to £15m across the life of this plan. Further investment in IT will be required but the Council should move to a position where this can be justified and funded on the basis of efficiency savings in operational costs.
As well as these major reviews, there are some savings proposals put forward by officers that Labour would reject at this stage. The most prominent of these is the proposal to cut in total the allocation for Dysart Harbour (£3.65m). Labour proposes to retain this funding as this is the final element required to complete the regeneration programme in the area. To cut this funding would reduce the value of the work and resources that have already gone into the regeneration programme, pass up the opportunity to draw down external match funding, and damage the reputation of the Council with partner funding agencies.
Other proposed savings we would propose to retain are:
- · Education Fire and Safety Improvements (£3m)
- · Road and Footway Improvement (£1.675m)
Further discussion with Service management and through Strategic Committees will be required to refine the detail of how the available investment in Education and IT will be used.
In addition to the expected savings through the major reviews of the Council’s long term fleet and IT requirements, we propose to close the estimated funding gap by extending the period of the current plan by 3 years rather than the 2 suggested by officers, achieving an additional £17m to fund the programme. This will require a further re-profiling of the capital plan. We do not propose to add to the contingency element at this stage.
Officers are therefore requested to re-profile the Council’s capital plan on the basis of the following variations from the proposals contained in the report:
Budget Gap £27m
Identified Savings £47.4m
Available for Additional Spend £20.4m
Additional Expenditure or Proposed Cuts Not Accepted
Emerging Needs £14m
Investment in Care Homes £20m (plus £4m included in Emerging Needs)
Offsetting Investment £4m
in School Estate.
Community Investment Fund £5m
Dysart Harbour £3.65m
Education Fire Safety £3m
Roads and Footways £1.65m
Total £51.3m
Funded by
Available Additional Spend £20.4m
3rd Additional Year £17m
Reduction in Fleet Investment £7m
Reduction in IT Investment £7m
Total £51.4m
What is meant by “3rd additional year”, “reduction in fleet investment” and “reduction in IT investment”?
How much money could be saved by, when a senior officer retires or moves on, replacing them with somebody on a less banker-like salary? Or by charging FC employees and councillors to park in the Fife House/Rothesay House car parks (very much in line with the “green Fife” strategy, n’est-ce pas)? Or by allowing community councils to set their own precepts on council tax?
A major saving might be achieved by INCREASING the size of the fleet, i.e. leasing buses etc and employing drivers on indusrty-standard rates and actually running public bus services on “socially useful” routes, rather than paying private companies to provide such services.