Published on Monday, 6th February 2017

 

All the paperwork on the 2017/18 council budget has now been published (http://democracy.portsmouth.gov.uk/ieListDocuments.aspx?CId=126&MId=3535&Ver=4). 

 

The hard part of putting together any local authority budget is coming up with a list of savings that are of sufficient size so as to leave the books in balance, but which do not have an excessive negative impact on residents and which do not store up trouble for the long run. That exercise was completed in December when Full Council endorsed the administration's proposed plan to save £9m. The February meeting is about capital expenditure, the council tax and forecasts for the future.

 

Capital expenditure

 

The funding and delivery of the capital programme is going rather well. Crudely, infrastructure taxes, money from government for school repairs and transport schemes and a few other reoccurring bits and pieces amount to £7m a year. This is then supplemented by any money from government for new school places, the receipts from selling land or buildings and potentially money saved on day-to-day expenditure.

 

This coming year the council has £16m to play with, plus £8m put aside during the year - and that's without allowing for any grant that may be received in the spring for new school places. The baseline £7m has been supplemented by windfall profits from the property investment fund, the receipt from selling Chaucer House for the development of student housing, the faster than expected growth in council tax and business rate income and the improved performance of the port. Strip out school building and this will be the largest capital programme in years.

 

The council has three high priority programmes and once again most of the money will be allocated to them. These are the roads, schools and flood defences. This year will see:

 

- £11m for the City Centre Road, which will allow the council to make a serious bid to the government for the remainder of the cost. This scheme isn't primarily about traffic flow: it's about regeneration and getting something built on the old Northern Quarter site. If the road goes ahead, things will start to move.

- £0.5m for improvements on the Eastern Road corridor

- £4.4m to increase the capacity of Portsmouth Academy (formerly City Girls) by over 200

- £1.2m to go towards enhancements to the flood defences in Southsea, so we end up with something better than just a wall

 

Most of the rest of the cash is to go on maintenance projects, IT systems and so forth. One thing that I wanted, namely to improve the public realm in part of the city centre, is included, although work won't start on the ground for more than a year.

 

Council tax

 

A 4.99% rise is proposed, which is a percent higher than originally planned. The extra money will go to adult social care and it is only temporary - the increase in one of the two following years will now be lower than the 4% originally planned to balance it all out.

 

Portsmouth has always spent less per head on adult social care than most other authorities - a study by the Municipal Journal in 2015 identified it as the forth lowest spender (out of 152) after allowing for demographics. Starting from a low base is making it difficult to generate further savings, but there are still things to be done: eliminating red tape and allowing social workers to think for themselves has improved the service for older people and saved money at the same time; a new IT system shared with the NHS will improve productivity and a proactive approach to getting people mobile again is bearing fruit.

 

Forecasts for the future

 

A couple of interesting details in the report: firstly, the council's contribution to the pensions of current and former staff will rise by £2m (or 30%) over the next three years. This is a national increase and reflects the difficulty in earning sufficient returns to cover obligations at a time of low interest rates. Portsmouth City Council has no choice other than to make these extra payments, but the money will have to come from somewhere.

 

Secondly, the level of savings needed in future years has come down to £4m a year for the next three years. This is a good situation to be in and reflects the prudent decisions made over the last couple of years. 

 

Tags: Budget