City investment programme to continue despite budget savings
The Full Council agreed a total of £2.4million of revenue savings along with £516million of capital investment over the next five years to help the city achieve the ambitions in the Regional Economic Strategy, Strategic Infrastructure Plan and recently-agreed City Region Deal.
Aberdeen City Council Leader Councillor Jenny Laing said the savings have been achieved while ensuring no jobs were lost and council tax was frozen for a ninth consecutive year.
The figures were agreed at a meeting at the Town House for the General Fund Revenue budget for 2016-17 alongside the Non-Housing Capital Programme for 2016-21.
Cllr Laing said: "I have spoken in previous years about the need for this council to operate within its means and, as the lowest funded council in Scotland that is proving more challenging with each passing year.
"The council is operating in an environment of increasingly constrained public finances.
"The settlement from Scottish government for the year ahead means that local authorities across the country are facing some of the toughest choices we've ever known. Aberdeen is no different.
"Our revenue funding has been cut by more than £10million, while we must contend with additional cost pressures of £16million. That means we must find total savings of £26 million.
"All of this comes at a time when the city, and the north-east more widely, is in the grip of a prolonged downturn in the oil and gas industry.
"We have a balanced budget which protects frontlines services, jobs and will also drive inward investment into the city. Our approach to the savings has been to focus on back office efficiency savings.
"Aberdeen City Council has a 8,500-strong workforce and, despite the cut to our budget, we will protect every single one of our employees. This comes at a time when other local authorities are being forced to consider swingeing job cuts.
"Our budget allows continued investment in vital services that the most vulnerable people in our communities rely on. I think it is also important to note the impact this council can have on the local economy and indeed the well-being of our citizens.
"Despite the fiscal pressures, we will spend £450m through our revenue budget this year and commit in excess of £550m in our capital programme over the next five years.
"Our capital budget is an ambitious, but achievable, programme which is designed to breed confidence in the city and is in addition to the funding set out in the city region deal.
"Our capital budget has provision of £59m for roads infrastructure projects, including more than £19m for the Berryden corridor, a further contribution of £26m for the AWPR, £80m of investment for green energy, £81m for the new Aberdeen Exhibition and Conference Centre, funds to invest in flood prevention measures, and £34m for city-centre regeneration as part of the City Centre Masterplan.
"It also includes £130m for new schools which highlights our continuing commitment to education right across the city. These projects include the new state-of-the-art centre of excellence facility for children with serious and complex needs; the new academy south of the city, and a replacement Stoneywood primary school. Work also recently started on a £5m extension at Greenbrae Primary School in the Bridge of Don.
"Our budget provides the strongest approach to the challenges we face with the best options for serving the people and place of Aberdeen."
At the committee meeting, councillors agreed to:
The £0.5bn capital programme agreed includes funding for projects such as the new AECC and the three-council Energy from Waste facility.
A number of projects are entering the final construction phase and will be operational this year. These include:-
It was further agreed at the meeting that £11.3million is kept within the Budget as General Fund reserves, with the express intention of ensuring Aberdeen City Council can deal with unexpected and unplanned expenditure should the need arise.
The budget was recommended for approval by Full Council in the context of the Scottish Government's financial settlement which was published on 16 December 2015.
The settlement details for the Council show a reduction in General Revenue Grant of £8.7m from the 2015/16 figure. The value of the Non Distributed Rates (NDR) received from the Scottish Government is also reduced by £1.6m bringing the total reduction in funding from the Scottish Government to just over £10.3m.
The council had a £16.825m increase in contractual costs which include nationally-agreed pay awards, an increase in National Insurance employer contributions, an increase in pension costs, and other contractual costs.
Council officers identified £20m programme of efficiency savings including a reduction in energy consumption, smarter economics for staffing costs, and a reduction of historical under-spend, which has allowed costs to be reduced.
There was further an increase in expected council tax income (£2.4m) due to the increase in new houses and an additional gross £4.75m (£2.1m net of cost pressures) of funding towards adult health and social care which incorporates an allowance to meet the implementation of a Living Wage of £8.25 for careworkers.
The identified position for 2016/17 was therefore a deficit of £2.403m. A number of possible options were developed in November 2015 to allow elected members to determine how they would wish to meet the shortfall. The total savings identified £5.9m were in excess of the required shortfall on how the funding gap will be met and therefore not all options had to be implemented.