HEADING into an election year, Herefordshire Council is set to reject the government’s offer of a one-off grant to freeze council tax and instead plans an increase of 1.9 per cent – just short of a rise that would trigger a referendum.

The recommendation, which  would see the average (Band D) bill up to  £1,275.10, is  made in a cabinet report outlining the council’s budget plans for 2015/16.

Councillor Tony Johnson, leader of Herefordshire Council, defended the rejection of the grant saying the council would have to find a further  £750,000 in savings if the grant was taken up.

“I’ve looked very closely at the offer but I’m afraid because of how the government grant allocation system works, Herefordshire and other rural authorities do not get the same level of grant as some other councils; particularly London boroughs,” said Cllr Johnson.

“This is despite the fact that in many instances our geography means some services, such as road maintenance and social care cost more to deliver. The scheme on offer doesn’t add up for Herefordshire so unfortunately we are recommending it’s rejected,” he said.

As proposed, spending on adult social services would be slashed  by £5.5 million over 2015/16,  children’s wellbeing by £1.1 million and spending on other services by £3.6 million.

The council says the majority of the savings can be found through on-going “efficiency measures” such as the “improved” use of technology rather than cuts to frontline services.

To 2013/14 the council has saved £34m and is on target to save a further £15m in the current financial year against a background of reductions in grants from central government, increases in demand for council services and increasing costs to the council.

Spending would be increased in designated “priority” areas including £200,000 to re-introduce rural bus services that received significant local public support and have a potential longer term growth, £400,000 to maintain increased grass cutting in parks and verges and £100,000 – on recommendation – for the prevention of  child sexual exploitation.

The report makes clear that significant further savings will still have to be found over future financial years.

Cabinet holds the first budget debate next Thursday but approval rests with full council on February 6.

If approved, the final rate will be set on March 6 to  include the amount charged by parish councils, the Fire Authority and the Police and Crime Commissioner.

Initial proposals were put to the council’s two overview and scrutiny committees in November with neither proposing alternative options.

Although the council is on target to deliver within the overall budget in 2014/15 there is slippage in some savings and additional pressures in both 2015/16 and 2016/17 that have been mitigated by alternative savings and the use of contingencies.

Next month, the full council will be asked to approve the 2015/16 budget and a medium term financial plan with scope for “refreshment” by any new administration after the election in May.

At present, the medium term plan estimates a near £34 million funding gap arising from increased costs and reduced funding.

The latest 2014/15 forecast outturn shows an overall delivery of savings in  the current year with an additional £18 million of savings required over 2015/16-2016/17, £10 million  2015/16 alone.

A total savings plan for the financial period 2011/12-2016/17 accounts for £67 million.

The council’s provisional spending settlement for 2015/16 was announced by the government last month and may change in the final settlement expected in February.

Behind the scenes at Shirehall, however, any change is not expected to be material enough to effect the budget.

 The provisional settlement  did, however, confirm another year of funding reductions in 2015/16 - in line with the council’s expectations.

There was also an increase in rural funding that resulted in a net in overall funding compared to budget assumptions of £251,000k.

This will be used to fund transportation costs and specifically to improve public transport options for vulnerable groups and further feasibility work on the Rotherwas rail link.

A breakdown of current cost pressures across the council’s three directorates shows:

Adult and wellbeing

The 2014/15 savings target was £5.5 million of which 44 per cent has been delivered.

An overspend against budget of £974,000 by the year’s end is forecast.

This compares to a forecast overspend of £962k that was previously reported to Cabinet.

The forecast overspend within adult social care client groups continues to rise particularly in residential and nursing as a result of pressures in the hospital system.

But this has been partially offset by a continued reduction in the forecast spend  on domiciliary care.

The client forecast assumes that any further  demand pressures will be managed and that new services such as reablement and telecare that were introduced in July will have an impact on managing growth.

Children’s wellbeing

The savings target for 2014/15 was £2.5 million, 60 per cent has been delivered.

The latest forecast predicts an overspend against budget of  £472,000 by the year’s end, an improvement of £12,000 since August.

Continuing cost pressures presented by children in care and the use of agency staff costs means that mitigating savings have stopped any further overspend.

Though there are no new residential placements, there is little spare  capacity within the council’s in-house fostering service.

Despite significant efforts to reduce the use of independent foster agency placements there  has been an increase of seven placements with independent agencies since August costing an additional £139,000.

The Herefordshire Intensive Placement Support Service has now been commissioned with a specific remit to reduce costs and improve outcomes in this area.

The first intake of newly qualified social workers have completed their initial 12 months and moved into posts.

But the commitment to keep caseloads at a  manageable level has meant that there is still a reliance on long term agency staff with a number being extended until the end of the financial year.

However, the recruitment of permanent staff continues and a new regional approach to agency recruitment should start in January.

Economy, communities and corporate

The savings target for 2014/15 was £7.3 million, 89 per cent has been delivered.

The projected underspend is £242,000, a minor improvement  on the August position of £17,000.

Fourteen major planning applications brought £747,000 in fees in excess of the income budget, an increase of £237,000 from the August position.

There is a net revenue pressure of £174,000 in relation to the Master’s House project in Ledbury.

This spend is required to meet grant conditions of the Heritage Lottery funding for the project.

Outstanding insurance liabilities have been externally re-assessed with a recommendation that the council increases the sum set aside in its insurance reserve.

This, as well as costs associated with the re-tender of the contract, gives an overspend of  £250,000 built into the base 2015/16 budget.

There are risks emerging in the property maintenance budgets marked for management within the overall directorate budget.

Earmarked reserves and contingency budgets have been set aside for in-year pressures.

The £2 million budgeted for ”change management”  is forecast to underspend by £1 million due to less than forecast redundancy costs falling in year.

In October, the revenue contingency budget  of £700,000 was committed to additional grass cutting, Colwall Primary School’s temporary accommodation and  adults transitions.