Sheffield City Council - Case Study Example

Sheffield City Council By student’s name Course code+ name Professor’s name University name City, state Date of submission Table of Contents Introduction 3 Background Information 4 Financial Performance Analysis of Accounts and Performance against Budget 5 Overview of the Year 2014 5 Revenue Expenditure 5 Capital Expenditure 7 Financial Performance against Internal Targets 9 Non-Financial Performance against Internal Targets 11 Non-Financial Performance against External Targets 13 Comparison with other City Councils 15 Conclusion 16 References 17 Introduction Sheffield City Council is the local authority that represents the metropolitan borough of Sheffield consisting of 84 councillors. These councilors represent 28 wards that make up the entire region. Sheffield City Council provides over 500 services to the residents. As a result, the Council is a major employer with an objective of ensuring that the services are available and accessible to the citizens. The Council has over 18,000 employees who work in different portfolios namely the resources portfolio, place portfolio (responsible for housing in the city), communities portfolio and children, young people and families portfolio (Sheffield City Council 2014d, 1). The current plan for the local authority is to stand up for the entire region, support communities and protect them, focus on the provision of jobs, and to ensure that Sheffield becomes a more business-friendly environment. The long-term plan for the organization is to provide a strong economy for the benefit of the citizens, establish thriving neighborhoods and communities, tackle inequality in the local area and to promote better health and wellbeing for all people (Sheffield City Council Statement of Accounts 2014/2015, 5). Sheffield City Council also has certain values that guide its activities and plans. These include fairness, enabling individuals and communities to promote independence, proper and effective use of public money and ensuring cooperation (Sheffield City Council 2015, 21). These values are to ensure that Sheffield City becomes a strong and competitive economy, provides better services for the citizens, becomes a great place to live and provides safe and secure communities by tackling certain issues such as poverty (Sheffield City Council Statement of Accounts 2013/2014, 5). The aim of this report is to evaluate the performance of Sheffield City Council for the year ending 2014/2015. The report focuses on its financial performance, non-financial performance, its targets (both internal and external), service delivery and also looks at key aspects of the local authority that needs further review. Background Information Sheffield City Council should ensure that all its activities are conducted in accordance with the law and the standards that have been set by the national government and the policies that guide local authorities (Sheffield Development Services 2015, 54). The Council has a duty to ensure that public money is protected and properly accounted for by using it economically and efficiently. Under the Local Government Act 1999, Sheffield City Council has a duty to make continuous improvements in the exercise of its functions to ensure efficiency (Sheffield City Council 2014c, 2). In light of the duties and responsibilities that the Council has, it has established a Governance Framework whose purpose is to ensure that there is a proper exercise of the responsibilities of the council and to promote accountability (Sheffield City Council Statement of Accounts 2014/2015, 13). The framework consists of systems, processes, and values that guide the Council in discharging its duties. The framework consists of a system of internal control that is designed to ensure that the Council works towards the achievement of its aims and objectives. In line with the provisions of the framework and the system of internal control, the Council prepares annual accounts to show the performance of the Council in the last financial year (Felix and Bowers 2014, 7). This ensures accountability to the citizens, the community, and other stakeholders. Financial Performance Analysis of Accounts and Performance against Budget Overview of the Year 2014 The year 2014 was filled with both success and failures in the economy of many cities because it was the year before the elections. As a result, many cities gained from the promises made to them of greater funding by contestants. However, the political temperatures running up to the elections had a negative effect on the performance of most City Councils (Dan 2015, 14). The choice of government has great implications for cities since they rely on funding from the national government to finance most of their projects as the deficit is catered for by other means such as the collection of taxes as well as the fees acquired from issuing licenses. Despite the financial setbacks, city councils made great strides in delivering on their duties to the citizens (Centre for Cities 2015, 6). As part of ensuring accountability, the Council is required to comply with International Financial Reporting Standards in preparing its financial performance. Based on its reports, this requirement has been complied with where the international standards have been applied in the preparation of the financial statements (Sheffield City Council 2014a, 1). Revenue Expenditure Revenue expenditure refers to the day to day running costs of business or an organization. Regarding Sheffield City Council, revenue expenditure refers to the daily costs for the provision of the Council’s services under the five portfolios. The net revenue budget for Sheffield City Council in the financial year ending 2014/2015 was £58.4m which was divided based on the portfolios that guide the delivery of services for Sheffield City Council (Sheffield City Council Statement of Accounts 2014/2015, 16). This was a 6.7% and 17.7% increase from the net revenue budget in the financial years 2012/2013 and 2013/2014 which stood at £54.7m and £49.6m respectively (Sheffield City Council Statement of Accounts 2013/2014, 7). One of the strategies that were formulated to ensure economic efficiency is the implementation of the savings program for all the portfolios. This means that each of the portfolios had a responsibility to reduce unnecessary expenses in the delivery of services to ensure that there was less wastage of public money. All the five portfolios made significant progress in implementing the savings program. However, as will be discussed later in the report, there were still loopholes that hindered proper management of funds which affected the delivery of services (Sheffield First Partnership 2014, 23). Total Amount of Savings from 2012 to 2014 The successful implementation of the savings program, however, was impeded by the fact some of the portfolios exceeded their budgets. The communities portfolio, for example, exceeded its budget by £2.0m compared to £2.8m in 2012/2013 and £9.7m in 2013/2014. Though this was a significant reduction from the previous year, the difference between the budget and the actual spending for the portfolio was greater than in other portfolios. This means that there needs to be more scrutiny of the activities in the communities portfolio such as the adult social care service that has greatly contributed to the over expenditure (Sheffield City Council Statement of Accounts 2012/2013, 12). Capital Expenditure Capital expenditure refers to expenditure which is meant to create and increase assets whose life exceeds one year. The capital overturn for the year 2014 was £145.3m compared to a revised budget of £164.8m creating a variance of 12%. The four main sources of capital expenditure were capital grants and contributions which accounted for £67.6m, prudential borrowing which accounted for £43.4m, major repairs reserve which accounted for £25.8m and capital receipts which accounted for £8.5m. The funding from capital grants and contributions in 2014 increased by 73% from the financial year 2013/2014 but was 37% lower than the funding in financial year 2012/2013 (Sheffield City Council Statement of Accounts 2014/2015, 17). Despite the drop from 2012/2013, there was an introduction of funding from the major repairs reserve which contributed £32.4m in 2013 and £25.8m in 2014. This can be attributed to the implementation of the savings program making it possible to set aside funds for repairs of infrastructure. Sheffield City Council has successfully raised £240m through the savings program for the past four years (Sheffield City Council Statement of Accounts 2012/2013, 15). This has led to the increase in funds allocated to the delivery of services to the citizens. The year 2014 had an increase in prudential borrowing from 2012 and 2013 which can be because of the variance between the budget and actual spending. In 2014, prudential borrowing increased by 14% from the year 2013 (Sheffield Health and Social Care NHS Foundation Trust 2015, 9). The changes made to the local government finance have improved the financial outlook of city councils such as Sheffield City Council. City councils can now retain 50% of the funds collected through business rates while the other 50% is sent to the Government (Sheffield Independent Reviewing Service 2015, 34). Previously, the whole amount would be sent to the government which would then determine the share for each city council. Another change is the Revenue Support Grant allocation which represents each local authority’s share of the overall spending control by local governments, that is, the total amount the national government intends to spend on local governments. This has improved the funding for county councils hence, the increasing budgets (Volterra Partners 2013, 12). Financial Performance against Internal Targets Adult social care has featured for a number of years as a control weakness. As a result, Sheffield City Council set targets to ensure that more people have access to these services. Adult social care services have reached out to more adults with mental health problems and learning disabilities and has helped them find employment and improve their quality of life. The success seen in adult social care can be seen in the fact that the communities portfolio exceeded their budget by £2.0m which shows that more people are accessing the services offered by Sheffield City Council (Sheffield News Room 2016, 1). In 2014, Sheffield City Council spent £128.8m on supporting more than 13,000 people. This exceeded the target that had been set for 10,000 people. Though the total expenditure on Adult social care decreased by 4% in 2014 compared to 2013, there was an increase in the number of people who accessed the service. This shows that there was a considerable number of people that became independent as a result of the assistance from the program (Sheffield Adult Social Care Services 2014, 4). The implementation of the savings program has led to the need to ensure that expenditure in different departments or portfolios is kept low and focused on the basic on important things. Sheffield City Council had, by 2012, been able to move approximately 90% of the housing benefits claimants to an online system. The purpose of this system is to reduce the costs of delivering services to the claimants as well as ensuring that the quality of services is improved. Such changes have led to the achievements of targets in savings (Grant Thornton UK LLP 2014, 140). In 2012, Sheffield City Council was able to save £o.5m as a result of the new system. The savings increased by 100% in 2013 to £1m. In 2014, 99% of the claimants had been moved to the online system hence, increasing the savings by 20% from the year 2013. This is in line with the Council’s plan to use technology to improve service delivery and reduce costs (Grant Thornton UK LLP 2014, 145). The channel shift initiative by the Council was supposed to ensure that the delivery of services moved to self-service through online transactions with the aim of saving up to £200m. The savings have enabled more funds to be directed towards the acquisition of properties by the council to ensure that affordable housing is available to all residents. In the period between 2012-2014, there was a total of £900,000 of funding from the savings that was directed to the acquisition of properties as part of the strategy to ensure that the Council has more housing stock (Green 2015, 5). Non-Financial Performance against Internal Targets Sheffield City Council’s plan is to be an in touch organization, build a strong economy for the citizens, establish thriving communities, promote better health and wellbeing and deal with the inequalities in the City (Meadows et al. 2010, 16). As part of ensuring the wellbeing of the citizens and the community as a whole, the Council has invested in housing with the aim of providing affordable housing to all people. The Council continues to acquire new properties, build new houses as well as renovating older houses to meet the needs of the current generation. Further, the Council has also provided affordable housing for the old people in the communities and the adults with mental disabilities and learning disabilities. This has been achieved through the adult care social services (Local Government Association 2014, 10). As part of ensuring that Sheffield City Council becomes an in touch organization, the Council has adopted new technology into the delivery of their services to ensure that they can reach out to more people and ensure quality services. Further, the residents and the community can share their ideas and development needs to the Council. This is in line with the need to address the increasingly diverse needs of the citizens of Sheffield. The Council has also made an effort to ensure innovativeness by finding new approaches and delivery models to the residents of Sheffield (Sheffield City Council 2014b, 9). As part of creating a strong economy, the Council has embarked on creating conditions that allow the local businesses to grow. This is in line with the findings that Sheffield City Council ranks as among the Councils that experience the least rate of the establishment of new businesses (Owens 2014, 47). As a result, the Council has reached out to the business community to agree on ways to boost the conditions. The greatest challenge for the council has been the shortage of funds. The government has embarked on a plan to reduce the budget deficit to zero which means that the allocation of money to local governments has reduced. This has led to the reduction of funds available to city councils. The need for savings has further contributed to the need to tighten the belts further to reduce wastage of funds while at the same time maintaining the quality of services (Sheffield City Council 2015, 20). Business start-up rates in London, Brighton ad Sheffield Source: Centre for Cities, 2015 Non-Financial Performance against External Targets According to the Local Government Association (2014, 10), there are certain targets that Sheffield City Council should strive to achieve. The Council is required to make efforts in ensuring that those in active care have access to health services to improve their quality of life. Further, the Council should also strive to increase funding for preventative health to ensure that the number of admissions to hospital and long term care are reduced significantly. People should also stay in their homes yet receiving long-term care instead of being admitted to hospitals (Local Government Association 2014, 10). In residential housing, the Council also has a responsibility to ensure that it promotes access to affordable housing to the residents by increasing the number of residential developments (DTZ 2007, Sheffield city centre residential market assessment, 6). In 2014, Sheffield City Council made significant strides towards ensuring that these health targets are met. First, the year was considered as a shadow year which involved planning and budgeting for the activities that will promote the achievement of these targets. There were 2% of patients with care plans who joined the national GP enhanced scheme for reducing emergency admissions (Banwell 2014, 25). Though this did not meet the actual target, there was progress made in promoting self-care. Through the adult social care service, persons with mental disabilities that have benefitted from the program have become independent through the support from the Council as shown in the graph below. This includes having their residential houses (Sheffield Adult Social Care Services 2014, 32). In housing, Sheffield has made progress in the establishment of residential schemes. At least 1025 net units if new housing developments were made in 2014 to cater for the growing population in Sheffield (Winkler 2008, 20). Percentage of Adults with disabilities in paid employment Though there are significant efforts made in the achievement of the targets in health and housing, certain challenges remain to be impediments to these strategies. The growing population in Sheffield means that the demand for quality service is high (DTZ 2007, 38). This translates to the demand for more funding. Such growth has not been accompanied by an increase in funds to cater for such changes. This means that the Council has experienced finance difficulties making it hard to achieve these goals (The Northern Way 2009, 35). Comparison with other City Councils Sheffield City Council is the third largest Council with a population of 563,749 people as of 2014. Its net budget requirement in 2014 was £451.2m. This can be compared with £21.5m which was the net budget for Cambridge City Council. The small budget for Leeds City Council can be attributed to the small population of 126,500 residents. Leeds City Council, on the other hand, had a budget of £565.8m for service expenditure (Leeds City Council 2015, 23). Both Leeds and Cambridge City Councils spent less than their budgets, unlike Sheffield that exceeded the budget for the year 2014. Leeds City Council underspent £0.7m on their £565.8m while Cambridge City Council net revenue spending was £3.4m less than the budget that had been set for the year. Bristol City Council also spent less than its budget by £9.4m (Bristol City Council 2015, 34). Sheffield spent more than its budget with the Communities Portfolio exceeding its budget by £2.0m. The implication is that these Councils are making more progress in their savings program compared to Sheffield. The source of funds for Leeds, Sheffield and Cambridge, are similar though there are differences in loans. Cambridge City Council had less borrowing approximately 5% lower than both Sheffield and Leeds, which can be attributed to the differences in size between the Councils (Cambridge City Council 2015, 56). Once of the common strategies among the Councils is the promotion of independence of the communities. The three Councils dedicated over 60% of their budgets on substantial the delivery of services. Part of these investments was in the communities to promote their independence and eradicate poverty. The implementation of Anti-Poverty Strategies was common in the cities as part of an effort to reduce the overreliance on the Councils by the residents. Conclusion Sheffield City Council has greatly invested in the provision of services to its residents. The division of the budget based on the five portfolios has ensured that most of the needs of the residents are addressed in the budget. Further, the existence of a program such as the adult care social services has ensured that even people with disabilities are supported to become independent. In 2014, the Council made significant efforts in promoting quality health care to the residents, affordable housing and investment in infrastructure for the residents. However, challenges such as the inadequate funds and the growth of population impede the delivery of services to the citizens. These challenges have largely contributed to the number of complaints as shown in Appendix 1. References Banwell Jon 2014, Report of the executive director children, young people and families, Sheffield City Council. Available at: http://sheffielddemocracy.moderngov.co.uk/documents/s14584/Adoption%20Reform%20Grant%20201415.pdf [Accessed 6 May 2016] Bristol City Council 2015, Statement of accounts, Available at: https://www.bristol.gov.uk/documents/20182/33624/Audited+Statement+of+Accounts+2014.15_0.pdf/aeb124fd-0f29-48ad-8f61-aed78b33ebfa [Accessed 6 May 2016] Cambridge City Council 2015, Annual report and statement of accounts for the year 2014/2015, Cambridge City Council, Available at: https://www.cambridge.gov.uk/sites/default/files/statement-of-accounts-2014-15_0.pdf [Accessed 6 May 2016] Centre for Cities 2015, Cities Outlook 2015, Available at: http://www.centreforcities.org/wp-content/uploads/2015/01/15-01-09-Cities-Outlook-2015.pdf [Accessed 6 May 2016] Dan Wake 2015, Comparing council performance: The feasibility of cross-national comparisons within the UK, Chartered Institute of Public Finance and Accountancy. DTZ 2007, Sheffield city centre residential market assessment, Sheffield City Council. Felix K and Bowes P 2014, The Sheffield city region economy: Performance and Challenges, Regional Economic Intelligence Unit, Leeds City Council. Available at: http://sheffieldcityregion.org.uk/wp-content/uploads/2014/01/SCR-Labour-Market-Analysis.pdf [Accessed 6 May 2016] Grant Thornton UK LLP 2014, Good Practice in Local Government Savings, Department for Communities and Local Government. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/388519/Good_Practice_in_LG_Savings_-_Final_Report_-_17_Dec.pdf [Accessed 6 May 2016] Green, S 2015, Empty homes agreement 2015-2018, Available at: http://sheffielddemocracy.moderngov.co.uk/documents/s19509/Empty%20Homes%20Agreement.pdf [Accessed 6 May 2016] Leeds City Council 2015, Statement of accounts 2014/2015, Available at: http://democracy.leeds.gov.uk/documents/s137344/Statement%20of%20Accounts%2010th%20September%202015.pdf [Accessed 6 May 2016] Linda Meadows et al., 2010, Evaluation of Sheffield city council’s community justice panels project, Hallam Centre for Community Justice, Sheffield Hallam University. Local Government Association 2014, Better care fund submission: Part 1, National Health Service, England. Owens Dianne 2014, Report of children, young people and family support scrutiny and policy development committee, Available at: http://sheffielddemocracy.moderngov.co.uk/documents/s16556/Scrutiny%20Committee%20Report%20on%20CSE.pdf [Accessed 6 May 2016] Sheffield Adult Social Care Services 2014, How did we do? Sheffield City Council. Sheffield City Council 2014, Adult social care performance: Local account 2014, Available at: https://www.sheffield.gov.uk/SCC-Home/caresupport/involvement-engagement/policy/local-account.html [Accessed 6 May 2016] Sheffield City Council 2014, Population and health of Sheffield, Available at: https://www.sheffield.gov.uk/your-city-council/sheffield-profile/population-and-health.html [Accessed 6 May 2016] Sheffield City Council 2014, Sheffield City Council financial regulations 2014: Summary of changes from the 2013 regulations, Available at: http://sheffielddemocracy.moderngov.co.uk/documents/s14112/Changes%20to%20the%20Constitution%20Appendices.pdf [Accessed 6 May 2016] Sheffield City Council 2014, Sheffield plan, Available at: https://www.sheffield.gov.uk/planning-and-city-development/planning-documents/sheffield-plan.html [Accessed 6 May 2016] Sheffield City Council 2015, Corporate Plan 2015-2018, Sheffield City Council. Sheffield City Council 2015, Statement of accounts 2012/2013, Sheffield City Council. Sheffield City Council 2015, Statement of accounts 2013/2014, Sheffield City Council. Sheffield City Council 2015, Statement of accounts 2014/2015, Sheffield City Council. Sheffield Development Services 2015, The Sheffield plan: Our city, our future, Sheffield City Council. Sheffield First Partnership 2014, State of Sheffield 2014, Available at: https://www.sheffield.ac.uk/polopoly_fs/1.357296!/file/SOS.pdf [Accessed 6 May 2016] Sheffield Health and Social Care NHS Foundation Trust 2015, Annual report and accounts 2014/2015, National Health Service. Sheffield Independent Reviewing Service 2015, Annual report 2014-2015, Sheffield Independent Reviewing Service. Sheffield News Room 2016, The changing face of Sheffield city centre, Available at: http://www.sheffieldnewsroom.co.uk/the-changing-face-of-sheffield-city-centre/ [Accessed 6 May 2016] The Northern Way 2009, City relationships: Economic linkages in Northern city regions, Available at: http://www.theworkfoundation.com/assets/docs/sheffield%20city%20region.pdf [Accessed 6 May 2016] Volterra Partners 2013, An assessment of the case for a city centre high speed rail station in the Sheffield city region, Sheffield City Council. Winkler Astrid 2008, Sheffield City report, Centre for Analysis of Social Exclusion. Available at: http://sticerd.lse.ac.uk/dps/case/cr/CASEreport45.pdf [Accessed 6 May 2016] Appendix 1 The Number of Complaints in 2013/2014 and 2014/2015 Source: Sheffield Adult Social Care Services, 2014 Read More