Public Document Pack

Transcription

1 Public Document Pack Dorset Area Joint Committee Agenda Supplement Time: 2.00 pm Date: 21 March 2018 Venue: Committee Rooms A & B, South Walks House, South Walks Road, Dorchester, Dorset, DT1 1UZ (use DT1 1EE for sat nav) 6. Consolidated Medium Term Financial Plan 3-8 To consider a report by the Dorset Councils Chief Executives. 7. Council Tax Harmonisation 9-18 To consider a report by Dorset Councils Chief Executives. 8. Programme highlight report To consider a report by the Programme Director.

2 This page is intentionally left blank

3 Agenda Item 6 Dorset Area Joint Committee Date of Meeting 21 March 2018 Officers Dorset Area Chief Executives Subject of Report Consolidated Medium Term Financial Plan Executive Summary At its meeting in December 2017 the Joint Committee received a report which identified the consolidated medium term financial plan of the new unitary council. At the time, each of the councils was nearing the completion of its budget setting for 2018/19. These budgets have now been set and, as a result, the financial position of the existing councils going forward have become clearer. The disaggregation of the County Council s services is continuing and so the proportion of its expenditure committed in Christchurch is not yet apparent. Early indications suggest just over 11% of the County Council s baseline is in respect of Christchurch. Assuming the level of resources generated and expended in Christchurch are broadly in line allows a broad assessment of the total funding gap of the new unitary to be made. The report suggests this funding gap may be in the order of 16.6m in 2019/20, with a further gap of 8.1m in 2020/21, although the gap in 2019/20 increases to 17.3m if all Councils assume the proposed tariff adjustments will take place. Dorset area councils are due to start paying a tariff adjustment in 2019/20, totalling 10.9m, assuming 11% of the County Council s tariff adjustment ( 1.1m) is the responsibility of the Bournemouth, Christchurch and Poole unitary. The Government is proposing to consult on the removal of the tariff adjustment in the spring of The removal of the threat of a tariff adjustment will reduce the budget gap for Dorset Council to 6.4m in 2019/20. The recommended approach to council tax harmonisation, elsewhere on the agenda will not reduce the yield from council Page 3 1

4 tax. However, all of the other options, which adhere to the referendum thresholds will result in a loss of council tax in excess of 6m per annum, thereby increasing the budget gap and hence the savings target. The Joint Committee has already agreed to establish a task and finish group to develop the first budget of the new council. This will need to include the development of the strategy to identify the required savings. Before the task and finish group meets it would be useful for the medium term financial plan to be developed to include the reserves and balances likely to be available to support the revenue budget and the capital resources available to support capital expenditure. Budget Implications The aim of the report is to highlight the emerging financial position of the new unitary council so that the Joint Committee / Shadow Executive can take informed financial decisions. Recommendation 1. That the Joint Committee notes the contents of the report. 2. That the medium term financial plan is developed to include reserves, balances and capital resources, for the next meeting of the Joint Committee Appendices None Background Papers None Report Originator and Contact Steve Mackenzie Chief Executive, Purbeck District Council Telephone: stevemackenzie@purbeck-dc.gov.uk Page 4 2

5 1. Background 1.1 At its meeting in December 2017, the Joint Committee received a high level medium term financial plan, based on the published plans of the five Borough and District Councils and the County Council. At that time the work on the disaggregation of the County Council s services had only just commenced and it was considered to be too early to assess the results of disaggregation. At that time the total budget gap of the County Council had been assessed as 12.4m in 2018/19, 15.3m in 2019/20 and 7.7m in 2020/ In December, the medium term financial plans of the Borough and District Councils all anticipated that their 2018/19 revenue budgets would be balanced. The Councils were able to implement increases in council taxes which balanced their budgets. Nevertheless continuing budget pressures meant that all of the Borough and District Councils anticipated budget gaps in both 2019/20 and 2020/21. These totalled 2.579m in 2019/20 and a further 1.456m in 2020/ At its December meeting the Joint Committee were informed that the Chief Financial Officers of each of the sovereign councils had agreed to co-operate to provide information, to the Joint Committee, which would affect the financial position of the new council. They also agreed to highlight to their Councils and the Joint Committee any decisions which will have a significant impact on the financial position of the new council. 2. Medium Term Financial Plan 2.1 The medium term financial plans of the councils which will make up the proposed new Dorset unitary council provide important context for the new council. The lateness of the decision of the Secretary of State to create two new unitary councils to replace the existing councils severely restricts the opportunity for the transformation of services prior to the creation of the new councils and so the budget gaps of the existing councils are likely to be largely taken into the new council. 2.2 As expected, the medium term financial position of the existing councils developed during budget setting for 2018/19. They have revised budget gaps for both 2019/20 and 2020/21. The position of the County Council also changed by the assumption that the 2018/19 budget gap will be fully met by its Forward Together programme. 2.3 Recent discussions with finance leads from the Ministry of Housing, Communities and Local Government have confirmed they are unable to run the County Council s baseline funding model with Christchurch excluded. Consequently, they have indicated they would like finance representatives from each of the proposed unitary councils to agree the allocation of the baseline funding locally. Discussions with Bournemouth, Christchurch and Poole finance officers will commence shortly to resolve this. 2.4 Early work by the Chief Financial Officer of the County Council suggests just over 11% of the County Council s baseline funding may be in respect of Christchurch, with the remaining 89% being spent in the area to be included in the Dorset Unitary. The disaggregation of the County Council s service expenditure still requires a substantial amount of work to come to a conclusion as to the proportion Page 5

6 of the County Council s cost base spent in Christchurch. However, in order to provide an estimate of the order of magnitude of the budget gap to be addressed by the Dorset Unitary, it is assumed it will be broadly in line with the baseline funding, at about 11%. 2.5 The consolidated savings targets to achieve a balanced budget in 2019/20 and 2020/21 are shown in the medium term financial plans of each of the existing councils. They total 18.46m and 8.97m respectively. Some of the assumptions which underpin the medium term financial plans differ between the existing councils. Assuming approximately 11% of the County Council s budget gap will transfer to the other unitary reduces the Dorset unitary budget gap to in 2019/20 and 8.13m in 2020/ The greatest difference is in the treatment of the tariff adjustment, which the Government has indicated will affect all existing councils in the Dorset unitary area. This means they will have to pay the Government so that it can continue to distribute revenue support grant to some councils elsewhere in the country. The greatest impact is on the County Council, with a tariff adjustment of 10.1m in 2019/20.Again, assuming the Dorset unitary council is responsible for 89% of the County Council results in 9.1m of the County Council s tariff adjustment affecting Dorset Council. 2.7 The medium term financial plans of the County Council, East Dorset and Purbeck include the impact of the tariff adjustment in their budget gaps. Those of the Councils within the Dorset Councils Partnership exclude the tariff adjustment. 2.8 The Government has confirmed it will hold a consultation in the spring of 2018 on alternatives to the tariff adjustment but it has yet to indicate whether it intends to abolish the tariff adjustment and what alternatives are being considered. 2.9 The table below shows the impact of the tariff adjustment on the medium term financial plan funding gap for each of the councils in the Dorset area including 89% of the County Council s budget gap: East Dorset Notes 2019/20 Gross Gap 000s Same as December 2017 Less tariff Adjustment /20 Net Gap 000s (453) North Dorset Purbeck West Dorset Weymouth & Portland Dorset County Council 89% of DCC gap 14,685 9,100 5,585 Total 17,296 10,895 6,401 Page 6

7 2.10 The consolidated savings target to achieve a balanced budget for 2019/20 is shown in the table above to be 17.3m if the tariff adjustment is imposed in 2019/20. This will reduce by 10.9m to 6.4m if the threatened tariff adjustment is not imposed 2.11 There are suspicions that the Government may find the money to remove the tariff adjustment in 2019/20 and then take account of the need to raise extra money as part of the fair funding review, which will be implemented in 2020/21. This raises the prospect of substantial savings being delayed from 2019/20 to 2020/ /20 is the last year of the current four year local government finance settlement. The Government has indicated its desire to make significant changes to local government finance from 2020/21. These include a move to the retention of 75% of business rates by local government. Some form of tariffs and top-ups is likely to continue as a result of the introduction of a fair funding review, which is currently being researched The consolidated medium term financial plan of the existing councils assumes the creation of a new town council for Weymouth will have a neutral impact on the new unitary council. It also assumes income generating assets are not transferred to existing town and parish councils without a similar transfer of service responsibilities and hence net expenditure. 3. Council tax harmonisation 3.1 The council tax harmonisation task and finish group has agreed to recommend harmonisation takes place at the start of the new unitary council. It is envisaged this will be achieved by the use of Alternative Notional Amounts so that there is no reduction in the council tax yield. 3.2 Alternative strategies which adhere to the council tax referenda criteria will result in council tax foregone. Various strategies are explored elsewhere on this agenda. Each of these will result in a loss of council tax in excess of 6m when full harmonisation has been achieved. In the meantime, the loss of council tax will gradually increase to in excess of 6m. 3.3 Any loss of council tax will need to be added to the level of savings which need to be achieved by the new unitary council, as detailed in section 2 above. 4. Future development of the medium term financial plan 4.1 The commentary on the medium term financial plan set out above is entirely focused on the savings required to achieve a balanced revenue budget for the new council. In due course, the Joint Committee / Shadow Executive will need to develop a strategy to close the funding gap. The Joint Committee has identified a task and finish group to develop the budget for the new council. 4.2 Before the task and finish group meets for the first time it would be useful if the commentary on the medium term financial plan was developed to include the financial resources likely to be available to the new council. These resources include the reserves and balances available to support revenue funding and the capital finance available to support capital expenditure. Page 7

8 This page is intentionally left blank

9 Agenda Item 7 Dorset Area Joint Committee Date of Meeting 21 March 2018 Officers Dorset Area s151 Officers Subject of Report Executive Summary Council Tax Harmonisation to consider preferred options from the Task and Finish Group At its meeting on 22 nd February, the Task and Finish Group considered a paper (attached at Appendix 1) which looked at the possible options for Council Tax Harmonisation. The options effectively fall into 3 groups:- harmonisation at current average on day 1 {option A}; harmonisation to lowest current rate over 1, 3 or 5 years {Option B,C,D}; harmonisation by freezing highest current rate until others areas catch up {Option E}. The fundamental difference between the options is that with Option A, no council tax income would be foregone. This would however require an Alternative Notional Amount to be agreed by MHCLG as the combination of the move to the ANA and the council tax increase for the new authority in would breach the current capping limit. In all other options, the end point is the same, with the loss of 6.5m in council tax income per annum by year 5. The number of years taken to reach this point would determine how quickly this loss of income was realised. The task and finish group debated each option in detail and did not reach a unanimous position. However, 6 out of 9 members favoured the option of harmonising at the average current rate on day 1 (Option A). This is therefore the recommended preferred option put to the Joint Committee today. The key reasons for this being the preferred option are as follows:- Page 9

10 Best option financially for the new authority ( 6.5m per annum benefit by year 5) Maximises control for the new authority. The council tax harmonisation options will need to be chosen by mid- May for incorporation into the policy instructions which MHCLG will issue to their lawyers to draft the Finance Orders. These are due for completion by July The timescales for this are therefore significantly in advance of any detailed MTFP considerations for the new authority. With ANAs agreed, the new authority will be able to set its council tax strategy going forwards starting from the best possible base. It may therefore be possible for the or future increases to be significantly below the capping limit, particularly once the benefits of LGR have been realised. Uncertainty over disaggregation, new needs based funding formula, negative RSG and changes to the Business Rates retention scheme. Lobbying risk around negative RSG if we do not take the most prudent financial decisions for ourselves now. Consistent data entry onto the Revenues & Benefits System and more efficient for staff to administer. Easier to administer the Council Tax Support Scheme if it is all aligned. All residents of the new Dorset authority will be paying the same rate from Day 1. The main negative issue for this option is that residents. in North Dorset and West Dorset would be facing increases in Council Tax in excess of the 3% cap. There is however a further risk with this option as it would only be possible with the agreement of ANAs. This option was discussed with MHCLG officials on 8 March who were happy for it to be considered as a potentially acceptable option. The task and finish group therefore considered what its fallback option would be if this was not granted. Again, this was not unanimous but 8 out of 9 members voted for the 5 year harmonisation option. This phased the loss of income over the longest period and had the lowest council tax foregone of the remaining 4 options over years 1 to 5 of 23.1m (compared to the highest loss of 31.5m). Page 10

11 Whilst this is the recommended fall-back position from a finance perspective, members felt that it would become harder to explain to residents over time why different areas were still paying different rates of council tax. Budget Implications The 5 different options considered have differing levels of council tax foregone for each scenario. These range from zero to 6.5m per annum depending upon the option chosen. Total council tax foregone over the first 5 years varies from zero to 31.5m depending upon the option chosen (see table in paragraph 5 of Appendix 1). The new authority will still be facing significant financial challenges in as each of the current authorities has an existing budget gap to be met. Any further loss of council tax would therefore exacerbate this. Exact details will not be clear until the new authority produces its Medium Term Financial Plan and the outcomes from the various funding reviews and consultations become clear. Recommendation The Joint Committee agree that:- a) the preferred option for Council Tax Harmonisation in the Dorset Area is to harmonise at the average current rate on day 1 (Option A) and that an Alternative Notional Amount is sought from the Secretary of State b) the fall-back option would be to harmonise over a 5 year period. Appendices Appendix 1: Report to Council Tax Harmonisation Task and Finish Group - 22 February 2018 Appendix 2: Additional Financial Information Comparison to Increases Background Papers None Report Originator and Contact Richard Bates Chief Financial Officer, Dorset County Council Telephone: r.m.bates@dorsetcc.gov.uk Page 11

12 1. Council Tax Harmonisation Proposed Dorset Council Whilst everyone pays the same Band D Council Tax for Dorset County Council s services, existing rates of across Dorset vary significantly from district to district. With the formation of a new council, the rates would need to be harmonised either immediately or over a period of time. Following advice from DCLG, the original business case for Future Dorset assumed that the period of harmonisation could be as long as 20 years. Subsequently, DCLG have indicated that a maximum period would be 5 years and that 10 years would be the absolute maximum but only if a special case were to be made. Modelling set out in this paper therefore concentrates on immediate, 3 year and 5 year harmonisation models. Note - All modelling is carried out at taxbase levels. 2. Current Taxbase / Council Tax Rates Increases in Council Tax for (subject to approval) Appendix 1 Taxbase Council Tax Council Tax increase No. Band D Band D % Dorset County Council 145, , , % East Dorset District Council 37, % North Dorset District Council 26, % 5 Purbeck District Council 19, % West Dorset District Council 41, % 5 Weymouth & Portland Borough Council 20, % 3. Weymouth Town Council A Community Governance Review was carried out last year to consult the public over the potential establishment of a Town Council in Weymouth, if local government reorganisation goes ahead in Dorset. The review was supportive of the idea and if this goes ahead then some of the services and income for Weymouth and Portland Borough Council would transfer to the new Town Council, together with part of the current precept to cover the net costs. The original business case for Future Dorset assumed a precept for the Town Council (if it was agreed to establish one) of 150 per annum. This was an average of the precept levels in other Dorset towns. The actual level of precept will be dependent upon which services are undertaken by the new Town Council and also on whether income generating assets are transferred to it. To model harmonisation, an assumption needs to be made on the precept as this will reduce the starting point for Weymouth and Portland Borough Council, which is currently the highest of the Dorset precepts. For modelling purposes, the original Page 12

13 sum of 150 has been used but this would need to be updated once the work determining a possible precept for the Town Council is completed. This precept would move 3.1m of council tax funding to the Town Council but a corresponding level of cost of services would also transfer from W&PBC to the Town Council. This would therefore have a net nil effect as long as the income and costs match. 4. Harmonisation Options 4.1. Day 1 Harmonisation at Average Rates (Option A) Harmonisation on day 1 could be done by bringing all of the current council tax rates to an average rate across Dorset. This would be calculated by taking the total Council Tax Yield in and dividing by the total taxbase. This would give a new starting point for , called an Alternative Notional Amount (ANA). This would however require agreement of the ANAs by the government. Average Council Tax for (DCC + district) and Average Rate Total Yield / Total Taxbase {= / } 1, CT Yield Harmonised yield adj WTC Current Revised Change from Change from adj for WTC adj for WTC Council harmonised rate DCC + DC/BC for ANA existing 18/19 existing 18/19 Band D Band D Band D Band D % Dorset County Council 1, ,939,312 East Dorset District Council ,245,231 1, ,338,460 1, , North Dorset District Council ,308,209 1, ,004,248 1, , Purbeck District Council ,603,589 1, ,185,869 1, , West Dorset District Council ,047,973 1, ,749,746 1, , Weymouth & Portland Borough Council ,171,909 1, ,037,901 1, , ,316, ,316,224 The changes from the existing precept levels are shown in the table above. These would be before whatever precept increase was agreed by the new council for The largest increase would be in North Dorset where an increase in the overall Band D would be (2.63%). The total increase would also include the additional 2.99% rise for for each district area. This option would maintain exactly the same level of council tax yield as at present. There is therefore no council tax foregone from this option and it is therefore the best possible option from a financial point of view. For , assuming an increase in council tax of 2.99%, the council tax yield would increase to 236,172,779. This will be used as a comparator for all other options covered in the paper. The overall change in Council Tax between and the harmonised rate, including a 2.99% increase, is shown in the table below:- Page 13

14 Increases in Council Tax from to Harmonised rate including 2.99% increase Council Tax Council Tax increase increase Band D Band D % East Dorset District Council 1, , % North Dorset District Council 1, , % Purbeck District Council 1, , % West Dorset District Council 1, , % Weymouth & Portland Borough Council 1, , % Weymouth & Portland BC PLUS Town Council 1, , % Day 1 Harmonisation at Lowest Rate (Option B) All other harmonisation options will ultimately result in a position whereby council tax levels are brought in line with the lowest current rate plus any annual increases. This could be done over a number of years or on day 1. The end result is the same in terms of annual council tax foregone but the shorter the timescale, the quicker these losses in council tax yield are felt. The lowest precept is currently for North Dorset. Day 1 harmonisation at the lowest rate would therefore bring the Council Tax level across Dorset to the North Dorset level plus the increase (assumed at 2.99%) The Council Tax yield on this basis would be 230,121,341 which is 6,051,438 less than Option A harmonising at an average rate. This 6.1m per annum council tax foregone will be the same over time with 3 and 5 year options. The council tax foregone loss of 6.1m would have to be matched by reductions in expenditure, in addition to the reductions which will be required as a result of cuts in government support. Harmonise immediately to Lowest Level Current Council Tax DCC + DC/BC Increase yield Band D % Band D East Dorset District Council 1, % ,546,794 North Dorset District Council 1, % ,148,212 Purbeck District Council 1, % ,291,850 West Dorset District Council 1, % ,980,590 Weymouth & Portland Borough Council 1, % ,153, ,121,341 Notes:- Maximum increases (2.99%) made for North Dorset DC in All other rates reduced to this level Yield from Option A 236,172,779 Difference -6,051,438 Note - This Council Tax Foregone figure increases year on year with the rise in council tax hence by year 3 would be 6.295m and by year m, assuming annual increases of 1.99%. Page 14

15 Harmonise over 3 Year Period Year Harmonisation (Option C) Harmonisation over 3 years would mean that the rate for would be North Dorset s current rate plus 2.99% in year 1 and 1.99% increases for the following 2 years. Other district areas would have lower increases for the 3 year period. Current Council Tax Council Tax Council Tax DCC + DC/BC Increase yield Increase yield Increase yield Band D % Band D % Band D Band D East Dorset District Council 1, % ,496, % ,718, % ,940,292 North Dorset District Council 1, % ,148, % ,967, % ,802,206 Purbeck District Council 1, % ,887, % ,196, % ,509,360 West Dorset District Council 1, % ,058, % ,333, % ,632,697 Weymouth & Portland Borough Council 1, % ,283, % ,879, % ,486, ,874, ,094, ,371,070 Notes:- Maximum increases made for North Dorset DC until precept reaches the current highest one (East Dorset) Yield from Option A 236,172, ,872, ,665,982 Difference -3,298,578-4,777,716-6,294,682 Rates of increase would need to be adjusted if the council tax referendum limits were changed during the 3 year period. The council tax foregone would be less than option B for the first 2 years but from then on would be identical at 6.295m per annum plus future precept rises. The council tax foregone loss of 6.295m would have to be matched by reductions in expenditure, in addition to the reductions which will be required as a result of cuts in government support Year Harmonisation (Option D) Harmonisation over 5 years would mean that the rate for would be North Dorset s current rate plus 2.99% in year 1 and 1.99% increases for the following 4 years. Other district areas would have lower increases for the 5 year period. Harmonise over 5 Year Period Current Council Tax Council Tax Council Tax DCC + DC/BC Increase yield Increase yield Increase yield Band D % Band D % Band D Band D East Dorset District Council 1, % ,894, % ,518, % ,149,404 North Dorset District Council 1, % ,148, % ,967, % ,802,206 Purbeck District Council 1, % ,007, % ,440, % ,879,521 West Dorset District Council 1, % ,074, % ,365, % ,681,622 Weymouth & Portland Borough Council 1, % ,309, % ,932, % ,567, ,433, ,224, ,080,138 Yield from Option A 236,172, ,872, ,665,982 Difference -2,738,835-3,648,336-4,585, Council Tax Council Tax Increase yield Increase yield Band D Band D East Dorset District Council 1.01% ,786, % ,430,151 North Dorset District Council 1.99% ,653, % ,522,684 Purbeck District Council 1.40% ,324, % ,775,962 West Dorset District Council 1.95% ,023, % ,391,570 Weymouth & Portland Borough Council 1.87% ,214, % ,872, ,002, ,993,163 Notes:- Maximum increases made for North Dorset DC until precept reaches the current highest one (East Dorset) Page 15 Yield from Option A 250,554, ,540,775 Difference -5,552,039-6,547,703

16 Rates of increase would need to be adjusted if the council tax referendum limits were changed during the 5 year period. The council tax foregone would be less than options B and C for the first 4 years but from then on would be identical at 6.548m per annum plus future precept rises. The council tax foregone loss of 6.548m would have to be matched by reductions in expenditure, in addition to the reductions which will be required as a result of cuts in government support Freeze East Dorset until other areas catch up then Harmonise (Option E) East Dorset is current the highest precept at 1, Another option would therefore be to freeze this and increase the precept in the other council areas by the maximum until they reach the East Dorset level. North Dorset is the lowest, so once their precept has surpassed the East Dorset level for , all would harmonise at the NDDC level plus annual increases. Harmonisation would be complete by year 3 ( ). Freeze Highest (EDDC) until others catch up / then harmonise at lowest (NDDC) plus annual increases Current Council Tax Council Tax Council Tax DCC + DC/BC Increase yield Increase yield Increase yield Band D % Band D % Band D Band D East Dorset District Council 1, % ,275, % ,275, % ,940,338 North Dorset District Council 1, % ,148, % ,967, % ,802,206 Purbeck District Council 1, % ,171, % ,171, % ,509,461 West Dorset District Council 1, % ,746, % ,896, % ,632,746 Weymouth & Portland Borough Council 1, % ,675, % ,116, % ,486, ,017, ,427, ,371,301 Notes:- East Dorset frozen until other precepts catch up. Other precepts brought into line at that point ( ) or earlier if EDDC already reached Purbeck would harmonise year 1, West Dorset and W&PBC would harmonise year 2. All harmonised year 3 Yield from Option A 236,172, ,872, ,665,982 Difference -2,155,693-4,445,201-6,294,682 Rates of increase could be adjusted if the council tax referendum limits were changed during the 3 year period. The council tax foregone would be less than options B, C and D for the first 2 years but from then on would be identical at 6.295m per annum plus future precept rises. The council tax foregone loss of 6.295m would have to be matched by reductions in expenditure, in addition to the reductions which will be required as a result of cuts in government support. 5. Summary of Council Tax Foregone in Options A to E The table below shows the annual council tax foregone in each of the 5 options set out in the paper and the total over the 5 years to Page 16

17 C. Tax Foregone C. Tax Foregone C. Tax Foregone C. Tax Foregone C. Tax Foregone Total Years 1-5 m m m m m m Option A (harmonise day 1 at average) Option B (harmonise day 1 at lowest) Option C (harmonise over 3 years) Option D (harmonise over 5 years) Option E (freeze EDDC until others catch up) To put this in to context, Local Partnerships estimated savings of around 13m per annum for the new Dorset Council in their initial financial analysis. The short timescales for delivery of the new council will inevitably delay these savings from being realised. Transition costs were also estimated at a one-off sum, also of around 13m. PWC estimated in the Case for change that the savings from transformation and reorganisation between the 2 new unitaries could be as much as between 45m and 66m but with significantly higher investment / transition costs and a longer timescale of delivery. For both of these sets of projections, it needs to be noted that several council budget rounds will have eroded some of these opportunities since these reports were written. Page 17

18 Additional Financial Information Comparison to Increases Appendix 2 Some additional financial information was requested by the Task and Finish Group to be provided to the Joint Committee to show how Option A would compare with the increases in Council Tax recently agreed for Increases in Council Tax from to The table below shows the increase in precept in each area for as a combination of the Dorset County Council increase of 5.99% and the increase agreed for each district / borough council. DCC + District DCC + District Council Tax Council Tax Increase Increase Band D Band D % East Dorset District Council 1, , % North Dorset District Council 1, , % Purbeck District Council 1, , % West Dorset District Council 1, , % Weymouth & Portland Borough Council 1, , % Increases in Council Tax from to Harmonised rate including 2.99% increase for the new Council {Option A} Note - All of the modelling assumed a precept for Weymouth Town Council of 150. A reduced sum is therefore shown for the W&PBC area and the bottom line of the table shows the total increase for residents including the Town Council precept. Council Tax Council Tax increase increase Band D Band D % East Dorset District Council 1, , % North Dorset District Council 1, , % Purbeck District Council 1, , % West Dorset District Council 1, , % Weymouth & Portland Borough Council 1, , % Weymouth & Portland BC PLUS Town Council 1, , % Page 18

19 Agenda Item 8 Dorset Area Joint Committee Date of Meeting 21 March 2018 Officers Keith Cheesman, Programme Director Subject of Report Programme Update Executive Summary This report provides an update on progress since the last meeting on 21 February, and a summary of priorities for the next period to 17 April. In light of the Government s final announcement on 26 February, it also seeks Joint Committee approval to re-shape delivery of key work through the Task and Finish Groups, and to approve the creation of a change management process to ensure change projects within sovereign councils are aligned to the LGR Programme. Budget Implications None at this stage Recommendation That the Joint Committee: 1. Notes the progress made since the last Joint Committee. 2. Integrates the work of the Task and Finish Groups listed at paragraph 3.5 below into a Communications and Engagement Strategy, including a Member Engagement Strategy, and the overall programme and delivery plan. 3. Agrees the recommendations from the Future Service Integration (Shared Services) Task and Finish Group. 4. Agrees the creation of a change management mechanism to ensure existing change programmes are aligned with the LGR Programme and form part of a single narrative. 5. Notes the priorities for the next period to 17 April. Appendices 1. Timeline 2. High-level programme plan 3. LGR Workstream and Work packages v1 (phase 2) 4. LGR Phase 2 workshops Page 19

20 5. Task and Finish Groups: Summary Report Background Papers Written Ministerial Statement by Lord Bourne of Aberystwyth, 26 February 2018 Local Government Policy (ref: HLWS473) Report Originator and Contact Keith Cheesman Programme Director 1. Background 1.1 At the last meeting of the Joint Committee on 21 February 2018, members received a presentation on the LGR programme which included its structure, phasing, current areas of risk, and the Task & Finish Groups. 1.2 Five days after that meeting, the Secretary of State issued a Written Ministerial Statement announcing that, subject to Parliamentary approval, Local Government Reorganisation in Dorset would be implemented in accordance with the Future Dorset proposal submitted in February Officials at MHCLG have indicated that the Structural Change Order is due to be laid before Parliament by 31 March A timeline is attached at Appendix Members are aware that the timescale for delivery of the new authority is unprecedented. The report below sets out three recommendations designed to ensure that all major activity is now aligned to the LGR delivery plan, and a single narrative for Dorset can be created. 2. Recruitment and Resourcing 2.1 Since the last meeting further appointments have been made to the Dorset LGR Team. Two Workstream Coordinators came into post at the end of February, and two Programme Managers joined on 1 March. The Communications and Engagement Manager will join in April, and interviews are currently being held for Project Managers who will oversee delivery of core workstreams including IT, legal, HR, and finance. Advertisements are currently live for administrative support for the Director and team. 2.2 The Team have been focused on the development of both the high-level programme plan (attached at Appendix 2), and detailed delivery plan, and the creation of the programme infrastructure and Programme Management Office. 2.3 The detailed plan will draw out the further resources required for the programme. Much of the detailed work will be carried out by the range of subject matter experts working across the six councils. The Programme Team will need to understand, coordinate and ensure alignment to the plan of all such activity. Page 20

21 2.4 Increasingly through 2018, some of these resources will be required to draw away completely from their business as usual work to focus solely on LGR. The absence of a release of this expertise and resource will require external support to be commissioned/procured. 2.5 The Programme Board will be expected to expedite such a release of resources. 2.6 Following the informal session on 21 February on risk management, a risk and issue register has been developed and mitigation strategies are being developed. 3. Task and Finish Groups 3.1 A number of Task and Finish Groups were proposed by the Joint Committee last autumn, over the course of several meetings. The purpose of the Groups was essentially twofold - to pursue work in the absence of a Programme Team, and to provide a means of engagement, both for elected members and wider partners, in the absence of a communications and engagement strategy. A list of the Groups and an update on their activity is attached at Appendix Four of the groups electoral arrangements, disaggregation, the Structural Change Order and council tax harmonisation have focused on tangible outputs that have been required by Government as part of the programme. 3.3 A further four Groups area based decision-making, community partner engagement, Future Service Integration (shared services) and wider member engagement reflect values and aspirations and have broad, overlapping remits which are cross-cutting elements of the emerging programme plan. 3.4 In light of the final announcement and the establishment of a Programme Team, and to ensure the objectives of these Groups are an integral part of delivery going forward, the work of the Groups needs to be prioritised to focus on the critical deliveries and enabled through the programme plan and engagement strategies being developed. 3.5 To ensure the programme plan is holistic and inclusive of all members, partners and staff it is proposed that the work of the following Task and Finish Groups be paused immediately to consider how their work can be incorporated into the wider programme plan: Wider Member Engagement Service Integration Community Partner Engagement Area Based Decision-making 3.6 Task and Finish Groups on budget and governance have also been proposed and membership is being formed, but are yet to meet. Members are asked to consider Page 21

22 whether this work should now be incorporated into the finance and legal workstreams, rather than continue separately. 3.7 At their second meeting on 8 March, the Future Service Integration (Shared Services) Group agreed to make the following recommendations to Joint Committee: To suspend the Group and focus instead on the development of a communications and engagement plan, including a member engagement plan. That heads of service and team managers be encouraged to work together and with the programme in planning convergence. That the programme supports heads of service and team managers look for early opportunities to co-work and co-locate. 3.8 An initial draft of the programme s communication and engagement plan will be shared at the April Joint Committee and will set out proposals for how members from all tiers will be drawn in to the design and engagement process. 4. Managing Change 4.1 A major part of Phase 3 of the programme is to support the Joint Committee / Shadow Authority to agree a new operating model, built upon a vision. This will set the core principles of how the new Council is to be structured, its staff structures and member portfolios organised and how it will expect to deliver its services, make changes, work with partners, and manage its capital programme. 4.2 It is normal in large change programmes such as this for there to be a single design authority which has clear remit to ensure that all decisions about structures, services, spending and change conform to, or are consistent with, the operating model. 4.3 There are a number of pre-existing corporate change programmes within sovereign councils that have a bearing on delivery of the Phase 2 critical for Day 1 LGR, and vice-versa, and a risk of conflicting activity, competition for resource and confusion around competing narratives. 4.4 To ensure current business as usual change activities are understood, prioritised and aligned it is proposed that the LGR Programme brings forward a plan to April Joint Committee for a mechanism (mostly likely through the Programme Board) that will support existing sovereign councils to oversee and review all major change programmes within the context of LGR. 5. Programme Progress 5.1 The Ministry for Housing, Communities and Local Government (MHCLG) have provided an updated timeline with respect to the process of parliamentary approval of the Statutory Change Order and Consequential orders. Appendix 1. Timeline V21 provides an updated timeline. Page 22

23 5.2 Meetings took place with MHCLG for consequential orders in London w/c 5th March in relation to finance and staffing. MHCLG is still clarifying its approach, which is making it difficult to manage expectations. 5.3 A Joint TUPE project plan has been drafted with the Bournemouth, Christchurch and Poole (BCP) programme. 5.4 An ICT strategic approach meeting has been held between both programmes. It was agreed that BCP will engage Counsel on behalf of both areas to seek advice regarding an approach to the Information Commissioners Office for a Purpose Statement. This will allow a better understanding of exactly what ICT changes are required on the systems and applications that are used particularly by those staff transferring through Disaggregation. It was also agreed that it would be helpful to engage a Microsoft Gold Partner expert to support the changes required within existing infrastructure. 5.5 The Programme Team have developed a high-level delivery plan (Appendix 2, programme infrastructure and Programme Management Office). Going forward much of the detailed work will continue to be carried out by a range of subject matter experts across the Councils. In order to fully develop a thorough and tested detailed programme plan that captures all dependencies, addresses risk and highlights any issues, the programme team needs to draw on this expertise and capture all existing activity and future delivery plan requirements. Further detailed planning is underway through a series of workshops, planned for the next 2-3 weeks. This detailed plan will draw out the further resources required for the programme. 6. Dorset Area Programme next steps 6.1 The team has focused planning on a revised set of six key Workstreams, and a series of work packages are being scoped and developed. Appendix 3, (LGR Workstream and Work packages), illustrates the first iteration of required work packages. The detailed plan is working on a series of assumptions based on existing documentation and plans, in order to test and expand upon this detail, engage the wider workforce and utilise existing expertise the programme team intend to hold a series of workshops. The team also need to understand, coordinate and ensure alignment to the plan of all existing activity. 6.2 Appendix 4 sets out (LGR Workshops) sets out an outline plan for an initial series of workshops focusing on phase 2 activity. 6.3 The team will endeavour to select venues that reflect the geographical disparity of the existing six Councils, recognising the cost and time implications of this approach. The team will also seek to utilize existing available technology to enable remote and satellite workers to stream workshops. 6.4 Service level focused workshops aimed at capturing essential day one changes and future state design will seek to serve a dual purpose of both staff engagement, aiming to give a range of personnel an opportunity to contribute, and to ensure the plan tests assumptions and is fully informed. All of this detail will enable the detailed critical path analysis. Page 23

24 7. Highlight Programme Activity for the next period 7.1 Subject to 4.4 above, establish a change management mechanism to align existing programmes to LGR. 7.2 Continue to recruit the necessary resources to the Team. 7.3 Development of a Communication and Engagement Strategy and headline plan, building on the work that has been undertaken in the Task and Finish groups. 7.4 Develop the planning for Phase 2 of the programme, which will include delivery plans for core projects and engagement with staff. 7.5 Development of the methodology and structure to deliver phase Risks and Issues 8.1 The risk and issue register is being developed through the Programme Board and Programme Team. There are no risks or issues to be escalated at this stage. In the event that there is a need to escalate any to the Joint Committee for either awareness or decision they will be brought to the next meeting for consideration. 9. Budget Total Programme Budget 1,213,000 less Central Programme Team Agreed 83,000 1,130,000 Committed Spend: 17/18 18/19 Total Dorset Area Team (in place) 61, , ,500 Dorset Area Team (Currently being recruited) - 141, ,100 61, , ,600 Other Costs 75,000 Programme Budget remaining 372,400 Page 24

25 Page 25 Appendix 1. V21 Timeline

26 Appendix 2. High level plan Task Start End 1-Feb-18 1-Mar-18 1-Apr-18 1-May-18 1-Jun-18 1-Jul-18 1-Aug-18 1-Sep-18 1-Oct-18 1-Nov-18 1-Dec-18 1-Jan-19 1-Feb-19 1-Mar-19 1-Apr-19 1-May-19 LGR Dorset - High level project plan 26-Feb May-19 Phase 1- Creation of Dorset Council Structural Change Order made 23-May-18 6-Jun-18 Consequential orders to the SCO made 4-Jun Jul-18 Local Government Boundary Commission Executive agree election boundary proposal 31-May Jun-18 Parliamentary approval of election boundary proposal 19-Jun Dec-18 Council Tax harmonisation strategy approved 28-Feb Apr-18 Disaggregation approved 30-Mar Jun-18 Disaggregation IT Changes confirmed 15-May May-18 Phase 2 - Delivering Dorset Council Programme Team discovery and requirements gathering phase 1-Mar Apr-18 Finance Discovery: System changes, system interfaces 01-Mar Apr-18 Finance Discovery: Contract and contract novation, contracts registers 01-Mar Apr-18 Finance Discovery: House keeping, ending subscriptions, procurement card arrangements 01-Mar Apr-18 Finance Discovery: Billing implications 01-Mar Apr-18 Legal Discovery; Existing policies, procedures, guidance, strategies, frameworks 01-Mar Apr-18 Legal Discovery; Service safety discovery 01-Mar Apr-18 Customer/Service discovery: Customer impact assessment and service mapping 01-Mar Jun-19 Workforce Discovery:Dorset TUPE, staff and Trade Union engagement plan 01-Mar Apr-18 Communications and engagement plan drafted, agreed and adopted 01-Mar May-18 Process and timescale for the appointment of the Chief Executive confirmed 21-Mar Mar-18 Page 26 Process and timescale for the appointment of interim/designated officers (MO, S151) confirmed Notification letter to TU Shadow Authority: first meeting election of chairman, adoption of standing orders and rules of procedure to apply during the shadow period, creation of leader and cabinet executive, designation of statutory officers on an interim basis, adoption of an implementation plan, adoption of a code of conduct, adoption of a scheme for the payment of allowances to it's Members Shadow Executive: first meeting appoint leader 21-Mar-18 8-Jun Jun Jun Mar-18 8-Jun Jun Jun-18 Shadow executive: Appoint implementation team 20-Jun Jun-18 Agreement of Day 1 essentials by Shadow Exec 21-Jun Jun-18 Prepare IT implementation plan 7-Jun-18 7-Jun-18 Budget setting process starts 2-Jul-18 2-Jul-18 Recruitment of Chief Executive for Dorset Council 7-Jun-18 1-Aug-18 Shadow Authority 2nd meeting; appoint Chief Executive 1-Aug-18 1-Aug-18 Pension deficit calculation and notify LGPS actuary 10-Aug Aug-18 Draft budget prepared 31-Aug Aug-18 Statutory and Senior Officer roles appointed 2-Oct-18 3-Oct-18 Members agree content and branding of Council Tax bill 1-Dec Dec-18 Electoral Register published 1-Jan Jan-19 Finalise budget 18-Jan Jan-19 Shadow Authority 3rd meeting; agree budget 20-Feb Feb-18 Shadow Authority 4th meeting; close/transfer to new Council Council Tax bills are issued 1-Mar Mar-19 TUPE Process 1-Jan-19 1-Apr-19 Vesting Day 31-Mar Mar-19 Elections 2-May-19 2-May-19 Phase 3 - Designing Dorset Council

27 Page 27 Appendix 3. LGR Workstream and Work packages v1 (phase 2)