Meeting documents

1 THE ISSUE

1.1 Cabinet is requested to approve the allocation of the recession reserve. The proposals reflect the ideas contained in the May 2009 cabinet report.

1.2 This report also provides more up to date information for Cabinet about the impact of the recession and actions that have been taken.

2 RECOMMENDATION

The Cabinet is recommended to:

2.1 approve the allocation of the recession reserve as set out in Appendix 1

2.2 confirm that future allocations from this reserve will be delegated to the S151 officer in consultation with the cabinet member for Resources

2.3 note that further update reports will be issued to Cabinet as and when required

3  FINANCIAL IMPLICATIONS

3.1 The financial implications of the decision called for by this report are set out in Appendix 1, i.e. the use of the recession reserve.

3.2 There are no other direct implications of this report, but the impact of the recession is referred to the monitoring report which forms Appendix 2, other than:

• the risks for the Council's income budgets which were referred to when the annual budget was set and taken into account when evaluating the level of reserves required - the latest budget monitor report is also on this agenda
• the continued significant loss of income resulting from lower interest rates which was taken account of in budget setting
• limited capacity to generate capital receipts

3.3 The Council budget agreed in February contained the following specific provisions in relation to the recession:

• £35,000 to support promotion of the local economy
• £150,000 to enable a delay in increases in car park charges and to enable a review so that any increases would be targeted to avoid an adverse effect on the economy, especially local retailers
• £15,000 to enable youth outreach work
• £20,000 to support public events to promote the area

3.4 In addition, and after charging the above amounts (i.e. after allocating the resources from the recession reserve for specific purposes as set out in Appendix 1), the Council is carrying an unallocated recession reserve of £505,000. This unallocated amount is to help protect the Council from the effects of the recession, not least reductions in fee income. The budget monitoring report elsewhere on this agenda notes that the allocations thus far are already in excess of the LABGI funding, and that Cabinet need to be cautious in agreeing any further allocations in light of the overspends highlighted in that report, some of which are recession related, and the potential for further adverse financial impacts to emerge.

3.5 A review of the medium term service and resource plan is already underway to assess what further actions the Council needs to take to maintain a balanced budget in future years, taking into account:

• Increasing demands on services especially for social care
• Expected tightening of government funding including general and specific grants to local authorities resulting from the impact of the recession on the public finances - capital grants have the potential to be the worst affected
• Increasing pensions costs as a result of demographic changes and lower long term investment returns, which are themselves as a result of the severe `correction' in financial markets during the early part of the recession - although the government is consulting on options that may help to reduce the impact of this (linked to the actuarial review in 2010) and currently the improvements in the markets are reducing the pensions deficit from what it otherwise would have been.

4 COMMUNITY STRATEGY OUTCOMES

4.1 The Community Strategy is presently being updated and this report, together with recent discussions and presentation of issues to the Local Strategic Partnership, will help inform the new strategy due to be reported to Council in September.

4.2 All of the Community Strategy outcomes will in some way be affected. The Local Area Agreement (LAA) which underpins the strategy will be particularly affected in areas associated with:

• delivery of new housing and new affordable housing - significantly affected
• crime and in particular property related crime - reported to be only marginally affected despite high profile media about this issue affecting fear of crime

4.3 The latest position on the LAA was reported to Cabinet in March and referred to these issues and the commitment of the Government Office for the South West to reconsider the associated targets and reward grant.

5 CORPORATE PRIORITIES

5.1 The actions being taken in response to the recession impact on all corporate priorities. This was considered as part of the corporate plan refresh which was reported to Council in February this year

5.2 The recession and the recession action plan (reported to May Cabinet) do not require a change in those priorities. However, there is an impact on the sequencing of actions, target setting and detailed responses. Overview & Scrutiny Panels are reviewing this and an item is on the agenda for the next Corporate Performance & Resources Panel.

• More detail was in the May Cabinet report and is not repeated here.

The Audit Commission has reviewed the way Councils are prioritising their responses to the recession and a link to their report is enclosed. It generally confirms that the response by this Council is in line with best practice albeit that the impact here has been less dramatic than elsewhere. Their report can be found at http://www.audit-commission.gov.uk/localgov/nationalstudies/Pages/whenitcomestothecrunch12aug2009_copy.aspx.

6 THE REPORT

6.1 The main issue for consideration is the allocation of the recession reserve. This is set out in Appendix 1 and includes:

• A further £158,000 being allocated to help cover the shortfall of car parking revenue - in addition to the £150,000 agreed in May
• No further sums being set aside as grant assistance at this stage - the first tranche of community grants have only just been issued via Quartet using criteria agreed in consultation with the LSP which included added value, innovation, being one off, and directly assisting with the response to the recession

6.2 The following actions have been completed since the last report. These represent just some of the actions being taken. The recession reserve allocations give further information as does the action plan reported to the May Cabinet meeting.

Economic Development

• The Council, together with North Somerset & South Gloucestershire Councils and GWE Business West have been awarded £40,000 match funding by the South West Region Efficiency & Improvement Programme to deliver a mentoring and support programme to up to 80 local small businesses in key sectors to help them survive the recession
• 90 businesses have so far responded to the Business Needs Survey sent out by Development & Regeneration with requests for specific help: all requests are being followed up through GWE Business West and in conjunction with Business Rates and Corporate Procurement
• Pump priming funding provided through the Council's LAA is being used by Creative Bath and GWE Business West to deliver an ongoing programme of support to local businesses in the creative industries sector: to date 139 businesses have received "intensive assistance" to improve their business performance
• Some future proposed actions include:
  • Contributing towards a jobs and training fair at Green Park on 17th September - delivered by Job Centre Plus
• Funding a course for job-seeking graduates living in B&NES (delivered by Bath Spa University) - which would include giving them information about the local economy and the types of employers that are here, as well as general CV and interview advice;
• Supporting a project which is looking at getting local (and long-term unemployed) people into some of the jobs being offered by Southgate and across the City through the West at Work partnership - we are contributing £15,000 towards this project;

• A "Meet the Buyer" public procurement event using recession reserve funding

Communications

• the recession part of the Council's web site is being kept up to date and there remains close working between the Communications team and parts of the Council that give advice such as Housing Benefits and Council Connect.

Tourism, Leisure & Culture

• The Council has invested £20,000 in Bath Tourism Plus Ltd in order to develop a marketing programme aimed at the traditional visitor areas of Northern Europe and North America. This has been matched by the business sector.
• In addition the Council has invested £20,000 into a partnership with Future Bath Plus Ltd and the retail sector in order to develop a regional marketing and City Centre events programme aimed at increasing footfall during the autumn & winter period. This has been matched on a 2:1 basis by the retail sector in Bath.
• £20,000 has been invested in an events programme for Bath to attract greater footfall to the City. A further £10,000 has been made available for Keynsham, Radstock and Midsomer Norton through the Future Bath Plus Ltd for new events and activities to encourage footfall in the town centres.
• The Heritage Service has brought the Sophie Ryder exhibition of sculpture and drawings to Bath creating an indoor/outdoor exhibition of unique character. This increased the use of the public squares by 3 fold during the period May to September 2009. In addition the service brought the Supremes Exhibition of dresses and memorabilia to the Assembly Rooms during August.
• Council has arranged to bring the 'Earth from the Air Exhibition' to Bath for the period September 2009 to January 2010 supported by the Brian Roper Family Trust / the Trevor Osborne Property Company. This will increase visitor numbers by around 400,000 for the period and increase dwell time in the city by 40 - 90 mins.
• Worked with our services and contractors to create a range of discounts and offers to encourage people who are on Job Seekers Allowance or are unemployed to gain use of facilities and services at reduced costs. For instance a series of offers of free or £1 swimming lessons have been promoted throughout the B&NES communities.
• In our libraries we have highlighted our career sections and drawn attention to books that give guidance on job applications and developing CVs

Other

• Ongoing work in benefits to provide proactive support, to work closely with colleagues in housing, to provide home visits, and to cope with increasing demands on the service
• Small grants scheme for community organisations as referred to above
• Active work with tenants in the Council's commercial estate which together with the relatively limited impact of the recession on the centre of Bath is resulting in continued low levels of empty shops within the Council's estate - a landlords' forum is helping co-ordinate activity and support with other commercial landlords.
• The Southgate development is progressing ahead of schedule and this should start to provide new employment opportunities in the autumn

7 RISK MANAGEMENT

7.1 The report author and Lead Cabinet member have fully reviewed the risk assessment related to the issue and recommendations, in compliance with the Council's decision making risk management guidance.

7.2 A risk assessment has been carried out and is reflected in:

• the Council's Corporate risk register
• annual assessment of financial reserves

7.3 Some of the key risks include:

• difficulty in achieving the Council's priorities as a result of additional pressures being placed on communities
• difficulty in achieving targets in the LAA such as for more affordable housing and more housing generally
• loss of revenue income from fees and charges with this type of income representing about 30% of the Council's total income

7.4 In response the Council has:

• reviewed its Corporate Plan
• developed action plans in respect of the recession as set out in this report and in service action plans
• indicated that it will need to renegotiate relevant targets in the LAA affected by the recession
• set aside a special reserve to help deal with the effects of the recession
• anticipated the impact of the next actuarial review of the pensions fund and started to set aside what will need to be increasing amounts in its budget and medium term financial plans

8 EQUALITIES

8.1 Individual services have been advised to consider the impact of the recession when carrying out equalities impact assessments.

9 RATIONALE

9.1 See section 1.

10 OTHER OPTIONS CONSIDERED

10.1 All of the actions in this report are optional except those already in place to ensure there is a prudent approach inherent in the Council's budgets.

11 CONSULTATION

11.1 Cabinet members; Other B&NES Services; LSP Stakeholders/Partners; Section 151 Finance Officer; Chief Executive; Monitoring Officer

12 ISSUES TO CONSIDER IN REACHING THE DECISION

12.1 Social Inclusion; Customer Focus; Sustainability; Human Resources; Property; Young People; Human Rights; Corporate; Health & Safety; Impact on Staff; Other Legal Considerations

13 ADVICE SOUGHT

13.1 The Council's Monitoring Officer (Council Solicitor) and Section 151 Officer (Strategic Director - Support Services) have had the opportunity to input to this report and have cleared it for publication.