1. Scrutiny Select Committees Introduction to local government finance

2. Agenda The Council budget –Why budget? –The balancing act –Key dates and activities –Budget variances Revenue vs capital –Expenditure –Funding Retention of business rates Recommended reading

3. Why do we need to budget? Planning Monitoring Controlling Measuring performance

4. The balancing act Income Expenditure RSG Grants Business rates Council tax Rents Fees and charges Employees Premises Transport Supplies and services

5. Key budget dates and activities AprMayJunJulAugSepOctNovDecJanFebMar previous year closure of accounts audit of accounts current year budget monitoring & control budget updates more detailed forecasts next year provisional settlement final settlement public consultation detailed estimates savings/growth cabinet and SMG proposal to council

6. Variances can occur due to: Monitoring budgets Delays in processing payments/income Uneven spending patterns Incorrect profiling of budgets Mis-codings Centrally managed budgets e.g. repairs and maintenance Activity/demand changes Incorrect budget assumptions Poor management of resources

7. Revenue vs capital, expenditure Revenue expenditure relates to the day-to-day running of the Council Capital expenditure relates to the acquisition or improvement of a fixed asset such as land, buildings, vehicles or roads

8. Revenue vs capital, funding Revenue funded by: Council tax Central government grants Redistributed business rates Fees and charges Capital funded by: Capital receipts Grants Borrowing Contributions from the revenue budget

9. New developments: business rates Position up to 2012/13 –Collect NNDR as an agent for the government –Rates set centrally –NNDR redistributed by govt according to perceived need –Redistribution NOT connected to amount collected –SCC net gainer From 2013/14 –50% retention by collecting authorities –System of tariffs/levies to ensure fairness –Rates still set centrally –Authority will keep any incremental increases in rates collected

10. Recommended reading On the finance library intranet page at http://intranet.salford.gov.uk/customer/finance/finance- accountancy/finance-links.htm A brief guide to local government finance for councillors (CIPFA) A comprehensive guide to local government finance (CIPFA) Finance for members (link to mini-site)