City of Westminster
Cabinet Date Title of Report
20 January 2003 Further Budget Savings
Classification Report of
For General Release Chief Financial Officer
Wards involved All
Policy context City Council’s budget
Financial Summary Additional net savings of £3.1 million are proposed over
the next three years, together with a review of the parking
places reserve account.
Officer Contact David Gann Tel. 020 7641-2210
1.1 On 16 December, the Cabinet considered the Local Government Finance
Settlement 2003/04. It was noted that future grant uncertainties – together
with the need to fund growth commitments such as the cleansing contract
relet – means that there will be continuing pressure to identify budget
savings and generate additional income. The Cabinet therefore agreed that
the scope for further budget savings be reported to this meeting.
1.2 Chief Officers have identified further savings totalling £3.1 million p.a. over
the next three years. In addition, a reserve list of potential savings has
been prepared – these total £2.7 million p.a. over the three year period but
are not recommended at this stage as some difficult choices will need to be
2.1 That the draft revenue estimates for 2003/04 incorporate the additional net
savings shown in Appendix 1.
2.2 That the proposed changes to the parking places reserve account outlined
in paragraph 6.2 be agreed.
2.3 That the reserve list of savings summarised in paragraph 5.2 be excluded
from budget plans at this stage.
2.4 That the Chief Executive be given delegated authority, in consultation with
the Leader and Deputy Leader, and the Director of Legal and Administrative
Services, to decide whether the City Council makes an application for
judicial review against the Registrar General in respect of the non-discharge
of his duties under Section 2 of the Census Act 1920 (and/or his failure to
supply information) and/or application to the Chancellor of the Exchequer
under Section 6 of the Act for a local census to be carried out for the
3. BACKGROUND INFORMATION
3.1 On 18 November, the Cabinet considered the budget strategy including new
growth proposals totalling £12.1 million p.a. over the next three years (i.e.
2003/04 to 2005/06). However, these proposals included some major new
commitments which are being treated corporately within the budget
strategy, i.e. Customer Service Initiative, relet of the refuse collection and
street cleansing contract, rising school rolls, and the increase in national
insurance contributions. After excluding these corporate items, the
proposals represent net savings of £6.1 million, exceeding the initial savings
target of £5.0 million set by the Cabinet on 15 July.
3.2 The Cabinet provisionally agreed the growth and savings proposals on 18
November, subject to a further review of the budget strategy in the light of
the revenue support grant settlement and a reserve list of possible savings.
3.3 The provisional grant settlement for 2003/04 was reported to the Cabinet on
16 December. As expected, the settlement is based on formulae and
Census data changes which will have serious implications for the Council’s
budget, particularly in future years. Although the settlement represents an
increase of 3.5% over the equivalent amount for 2002/03, the real concern
is that the Formula Spending Share is a reduction of £50 million (14.6%) on
the comparative figure for 2002/03. This means that the Council will remain
at the “floor” level for future years and there is no guarantee that increases
will continue at or above inflation.
3.4 Future grant uncertainties – together with the need to fund growth
commitments such as the cleansing contract relet – means that there will be
continuing pressure to identify budget savings and generate additional
income. As part of the financial remit set in July 2002, the Cabinet
requested that a reserve list of possible savings totalling £5 million be
prepared for consideration in the light of the overall financial position
following the announcement of the grant settlement.
3.5 The Cabinet, therefore, agreed on 16 December that the scope for further
budget savings be reported to this meeting, together with a review of the
parking places reserve account (PPRA).
4. ADDITIONAL SAVINGS NOW PROPOSED
Since the budget options were submitted to Cabinet on 18 November, chief
officers have identified further net savings totalling £3.1 million over the next
three years. These proposals are shown in Appendix 1. The total net
savings, including those considered by Cabinet on 18 November, are shown
in Appendix 1A.
5. RESERVE LIST OF SAVINGS
5.1 As requested by the Cabinet, chief officers have prepared schedules for a
reserve list of possible savings. These are shown in Appendix 2 but are not
recommended at this stage as some difficult choices will need to be made.
5.2 The possible savings total £2.7 million over the next three years and are
Cabinet Member 2003/04 2004/05 2005/06 Total
over over over
2002/03 2003/04 2004/05
£’000 £’000 £’000 £’000
City Development -332 -25 -56 -413
Community Protection -350 0 0 -350
Finance & Support Services -193 0 0 -193
Leisure & Lifelong Learning -60 -195 -60 -315
Schools -316 -250 -250 -816
Social & Community Services -15 -115 -100 -230
Street Environment -255 -125 0 -380
Transportation & Infrastructure 0 0 0 0
-1,521 -710 -466 -2,697
6. PARKING PLACES RESERVE ACCOUNT
6.1 The PPRA has been reviewed to reflect revenue and capital commitments
and the need to maintain a working balance. The current projections are
shown at Appendix 3.
6.2 In particular, these projections assume that the following additional income
and expenditure savings will be agreed and achieved in the light of the
forecast effects of congestion charging:
Income Proposals :
Extension of controlled hours ?
This is under consideration in selected parts of the West End
where we are experiencing extreme congestion in the early
hours of the morning. These controls would start at 1.00 a.m.
and would not impact on people visiting restaurants, theatres
or other forms of entertainment between 6.30 p.m. and 1.00
Increase in meter charges outside borders of the congestion 1,100
Increase charges to £2.40 per hour in these zones
Increase in resident permit fees 300
Increase price of permit to £100 p.a. (current price of £90 was
set in 1999)
Reduction in resident permit subsidy 250
Reduction from current 85% subsidy to its former level of 80%
Increase meter tariffs in Lincoln Inn Fields 200
Match Camden’s current rate of £4 per hour (Westminster’s
rate is currently £2.40)
Improve on-street parking signage 120
Increase in spend on signage will increase meter income
Increase fees for trade persons’ permits 90
Reduce discount from 25% to 15%
Introduction of business permits 40
Development of business links in the north west of the City by
allocating specific spaces or sharing underused resident
Savings in Revenue Expenditure :
Off-Street car parks 150
Maintenance and reduced opening hours
Transport policy and traffic management 75
General reductions subject to impact analysis
Carriageway cycling improvements 200
Reduction in number of journeys and eligibility criteria
Total savings under City Council’s control 3,275
7. GOVERNMENT GRANT SETTLEMENT AND CENSUS ISSUES
7.1 On 16 December, the Cabinet agreed to continue the campaign for an
urgent review and correction of the 2001 Census figures for Westminster. It
was also agreed that objections be made to the Government about the
proposed changes to funding formulae and the proposals for passporting
education funding to schools.
7.2 Westminster’s formal response to the Government’s consultation document
on the local government finance settlement has concentrated on these
three major issues. Evidence has been produced to show that the 2001
Census has materially under-estimated the number of people living in
Westminster. In respect of the formulae changes, officers have critically
examined the new Personal Social Services and the Environmental,
Protective and Cultural Services formulae which adversely affect the
Council. Changes to the Education and Highways Maintenance formulae
were generally favourable to Westminster.
7.3 The Council has objected to the DfES proposals for “passporting” the
increase in Westminster’s Schools Formula Spending Share directly on to
schools. The Council would be required to pass an additional £8.96 million
to schools even though the cash increase in total grant for all services is
only £7.3 million. It would therefore be impossible to adhere to the DfES
demands without a real terms cut in other service budgets. The Secretary
of State must be notified of the authority’s proposed schools budget for
2003/04 by 31 January, 2003. If this is less than the “passporting”
requirement, he must be given the reasons for failure to pass on schools
funding in full. The Secretary of State has a reserve power to set a
minimum level of schools budget although it is intended to use this power
only in exceptional circumstances. If he does decide to determine a
minimum level of schools budget for an authority, he will provide notification
that he is doing so within 14 days. The authority then has a further 14 days
to object to the level of budget determined by the Secretary of State.
Following consideration of this objection and the reasons to support it, the
Secretary of State may proceed by placing an order before the House of
Commons setting out his determination. Once the order has been made an
authority will be required to set a schools budget of at least the level in the
7.4 The current draft of the Council’s response to the Minister of State for Local
Government and the Regions is attached at Appendix 4.
7.5 In addition to this formal response, considerable time and effort has been
devoted to the Census issues. An inter-departmental officer group has
been established to oversee and steer all Census work within the Council.
MORI were commissioned to test the validity of the 2001 Census. Their
findings, released on 8 January 2003, indicate that the Census has
significantly undercounted Westminster’s population.
7.6 Two meetings have been held with ONS officials to discuss the 2001
Census results for Westminster. Also, numerous requests have been made
to ONS requesting information about the conduct of the Census in
Westminster and requesting background information relating to the Census
results for the Westminster area. This information has not yet been
received from ONS. Meetings have been held both with the Greater
London Authority and Association of London Government to consider the
implications of the Census results for London and individual boroughs, and
to develop joint work programmes.
7.7 The officer census steering group has also mounted a highly successful
media campaign to highlight the inaccuracies in the 2001 Census for
Westminster. Briefing meetings have been held with journalists. This
campaign culminated in major stories appearing in the Daily Telegraph, the
Guardian and the Financial Times on 8 January 2003.
8. LEGAL IMPLICATIONS
8.1 At the last meeting the Director of Legal and Administrative Services
summarised in the confidential part of the meeting the advice which had
been received from Roger Henderson QC in relation to the City Council’s
legal options in the light of the fact that the 2001 Census has materially
underestimated the number of people living within Westminster, with the
consequent serious implication for the City Council’s grant position,
particularly in future years.
8.2 Those options included judicial review proceedings against the Registrar
General in respect of the non-discharge of his duties under Section 2 of the
Census Act 1920 and/or an application to the Chancellor of the Exchequer
under Section 6 of the Act for a local census to be carried out for the
8.3 On 23 December 2002 the Director of Legal and Administrative Services
wrote to the Director for the Office of National Statistics and Registrar
General for England and Wales formally requesting the outstanding
information the City Council requires to enable it to respond effectively to
the Government’s consultation on the provisional grant settlement. The City
Council had suggested 7 January as the date by which this information
should have been provided, but this deadline expired without the
information having been provided, or even a response to the letter of 23
December having been received. A further letter chasing a reply was sent
by the Director at the close of business on 7 January. Clearly the
continuing failure of the ONS to supply this information seriously
disadvantages the City Council in responding to the Government’s
consultation on the provisional grant settlement, the deadline for which is 14
8.4 It would clearly be sensible for the City Council to decide on what action it
wishes to take in respect of its legal options once the Government’s
reaction to the City Council’s response to the consultation is known and a
decision on the grant settlement has been made, which is expected at the
end of this month. It is therefore recommended that the Chief Executive
should be given delegated authority to decide, in consultation with the
Leader and Deputy Leader, and the Director of Legal and Administrative
Services, whether the City Council should commence judicial review
proceedings against the Registrar General and/or apply to the Chancellor of
the Exchequer under Section 6 of the Census Act 1920 for a local census to
be carried out for the Westminster area.
8.5 At this stage it is not easy to forecast the likely cost of a local Census but it
could be in the region of £800,000. If the City Council proceed with this
option, the possibility of the Westminster Primary Care Trust and the
Greater London Authority contributing to the cost will be explored.
9. WARD MEMBER COMMENTS
As this report relates to all Wards, no Ward Member consultation was
10. PROPOSED REASONS FOR DECISIONS
The scope for further savings needs to be considered in the light of the local
government grant settlement which has serious implications for future
Council budgets. In order to enable Departments to finalise their draft
estimates for 2003/04, it is recommended that the proposals for additional
income and savings, including those relating to the parking places reserve
account, be formally agreed. The proposed delegation will enable an
appropriate decision to be made on the City Council’s legal options in the
light of developments.
If you have any queries about this report, please contact David Gann on extension
2210, or e-mail email@example.com.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985
The documents referred to in compiling this report are as follows:
1. Report of Chief Financial Officer to Cabinet on 18 November 2002 – Budget
2. Report of Chief Financial Officer to Cabinet on 16 December 2002 – Local
Government Finance Settlement 2003/04.