Orkney Islands Council

Revenue Budget

2023/24

IMAGE: The cover displays the words “ORKNEY ISLANDS COUNCIL”, a heraldic coat of arms with the motto “BOREAS DOMUS MARE AMICUS”, and the title “REVENUE BUDGET 2023/24”.

Revenue Estimates

Contents

• Foreword by Head of Finance — page 1
• 1 General Fund Budget Strategy & Assumptions — page 5
  • Strategy and Assumptions — page 6
  • Approved Budget Calculation 2023/24 — page 17
  • Council Tax Calculation 2023/24 — page 17
  • Council Tax Comparison 2023/24 — page 18
  • Summary of Approved Service Pressures 2023/24 — page 19
  • Summary of Settlement Adjustments 2023/24 — page 20
  • Summary of Efficiency Savings 2023/24 — page 21
• 2 Service Committee Budgets — page 22
  • Service Committee Summary — page 23
  • Development and Infrastructure — page 24
  • Education, Leisure and Housing — page 26
  • Policy and Resources — page 28
  • Harbour Authority Sub-Committee — page 30
  • Asset Management Sub-Committee — page 30
  • Investments Sub-Committee — page 31
  • Pension Fund — page 31
• 3 General Fund Service Budgets — page 32
  • General Fund Summary — page 33
  • Central Administration — page 42
  • Education — page 47
  • Leisure Services — page 54
  • Social Care — page 62
  • Law, Order and Protective Services — page 69
  • Roads — page 70
  • Transportation — page 75
  • Operational Environmental Services — page 79
  • Environmental Health and Trading Standards — page 83
  • Other Housing — page 85
  • Economic Development — page 89
  • Planning — page 92
  • Other Services — page 94
  • Sources of Funding — page 100
• 4 Housing Revenue Account — page 101
  • Housing Revenue Account — page 102
• 5 Harbour Accounts — page 104
  • Scapa Flow Oil Port — page 105
  • Miscellaneous Piers and Harbours — page 109
• 6 Orkney College — page 113
  • Orkney College — page 114
• 7 Corporate Holding Accounts — page 117
  • Corporate Holding Accounts — page 118
• 8 Strategic Reserve Fund — page 121
  • Strategic Reserve Fund — page 122
• 9 Pension Fund — page 126
  • Pension Fund — page 127
• 10 Glossary of Terms — page 129

Foreword by Head of Finance

Introduction

The Local Government Finance Act 1992 is the legislative basis for the current system of local taxation, namely Council Tax. The Council is required to set a balanced budget by the 11 March in the financial year preceding that for which it is set. The revenue budget for the financial year 2023/24, commencing 1 April 2023, was agreed on 7 March 2023 with the Council Tax Band D level increasing by 10%, from 2022/23 level, to £1,369.21.

Level of Expenditure

The net revenue budget for 2023/24 stands at £100.778m.

General Fund services were not asked to identify any efficiency savings for financial year 2023/24. Whilst recognising the need to balance the budget and bring spending into line with available funding, £0.705M were of service pressures were approved for inclusion in the revenue budget. Service pressures are detailed on page 19 and Settlement Adjustments detailed on page 20.

Document Structure

The Strategy and Assumptions on page 5 were agreed by Council on 7 March 2023. These include the Council Tax calculation and the allocation of approved service pressure and savings across General Fund Service Areas.

The Service Committee Budgets on page 22 provides a budget summary by service committee. This includes details of all General Fund and Non-General Fund services.

The General Fund Service Budgets on page 32 details the General Fund Revenue Estimates, beginning with a Service Committee Summary then Service Area Summary, which includes a summary by Service Function. More detailed Service Area budgets by Subjective Group then follow.

The Housing Revenue Account on page 101 deals with the Housing Revenue Account.

The Harbour Account on page 104 deals with the Harbour Accounts: Scapa Flow Oil Port and Miscellaneous Piers and Harbours.

The Orkney College on page 113 deals with the Orkney College Account.

The Corporate Holding Accounts on page 117 deal with the budgets for General Fund and Non-General Fund Repairs and Maintenance to properties, General Fund and Non-General Fund Ground Maintenance costs and Utilities, Insurance, Telephones, Photocopiers and Postages holding accounts.

The Strategic Reserve Fund on page 119 deals with the Strategic Reserve Fund.

The Pension Fund on page 126 deals with the Pension Fund Account.

A Glossary of Terms is provided at page 129.

Definition of Key Terms

The estimates have been prepared using the format of the Council’s financial ledger system, which reflects the standard classification of local authority income and expenditure as recommended by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authorities (Scotland) Accountancy Advisory Committee (LASAAC).

Each of the constituent elements of the 2023/24 budget total are shown to enable both reader and budget holder to quickly see what makes up the budget figure presented.

The budget figures given cover eleven separate datasets, ranging from Approved Budget 2022/23 through to Approved Budget 2023/24.

These eleven datasets or columns of information are split between two distinct groupings which cover the two financial years 2022/23 and 2023/24.

The details show the full year revenue costs of providing General Fund, Housing Revenue Account, Harbour Authority, Orkney College, Corporate Holding Accounts, Strategic Reserve Fund and the Pension Fund.

Definition of Key Terms (cont.)

The following terms are used throughout the estimates with the undernoted definitions:

More detailed descriptions of each element within each of the Subjective Groups now follow:

Subjective Group (Expenditure)

Subjective Group (Income)

Erik Knight

Head of Finance

May 2023

General Fund Strategy and Assumptions

Strategy and Assumptions

1 The Budget Strategy

1.1

The Scottish Government published its draft budget for 2023/24 on 15 December 2022. In a letter sent to the COSLA President, the Deputy First Minister confirmed that the Budget document would not contain details of multi-year settlements for local authorities, and it would be a single year budget for 2023/24 once more. A key recommendation made in this report is to also set a one-year budget for 2023/24.

1.2

The letter goes on to reflect on the “unprecedented challenges” facing Scottish and Local government – with “rising prices and soaring energy bills”, stating:

“Councils, like the Scottish Government and the rest of the public sector, are working hard to support people through the cost crisis. In this regard we are hugely grateful to councils for their hard work and we fully appreciate that no part of public life has been immune from taking deeply difficult decisions to live within the current fiscal reality.”

In their response to the Scottish Budget, Scotland’s Council Leaders wrote to the First Minister expressing their collective deep concern about the impacts of the financial settlement, as follows:

“At a special meeting of Leaders on Monday 16th December, it was unanimously agreed that the budget settlement as it stands means another real terms cut to Councils’ core funding, at a time when many in our communities are struggling with the impact of rocketing prices across fuel, food and other bills, and facing unprecedented levels of poverty in a modern era, in an era where Local Government continues to provide the targeted and ongoing support deemed so vital to those most in need.

Council Leaders feel that this budget settlement will have a detrimental impact on vital local services, on our ability to focus the necessary resources and supports to our communities and on those who are already impacted by this cost-of-living crisis.

Leaders added that significantly, it will lead to the loss of jobs, both within Local Authorities and within the local companies who supply goods and services to councils and are reliant on their contracts to employ local people.”

The Convention of Scottish Local Authorities (COSLA) was “extremely disappointed that once again Local Government and the essential services it delivers have not been priorities by the Scottish Government”.

“The reality of the situation is that yet again, the essential services Councils deliver have not been prioritised by the Scottish Government. COSLA asked for £1bn but from our initial assessment of the Budget, we believe that Local Government will see an uplift of only £71m once policy commitments are taken into account” (COSLA news release of 16 December 2022).

The Fraser of Allander Institute summarised the settlement as “a real-terms decrease relative to a Gross Domestic Product (GDP) deflator of 4.9%”.

With this national backdrop, setting the Council’s 2023/24 budget has been difficult, not least because the Council has previously faced significant budget constraints that have required year on year savings; delivering savings of £15,164,200 over the past 12 years to 31 March 2023 as follows:

IMAGE: A table headed “STRATEGY AND ASSUMPTIONS” lists savings totals by financial year: £11,461,000 for 2011 to 2018, £1,756,700 for 2018 to 2019, £350,000 for 2019 to 2020, £1,022,800 for 2020 to 2021, £573,700 for 2021 to 2022, £nil for 2022 to 2023, and a total of £15,164,200.

1.7

The Council’s annual budget uplifts since financial year 2011/12 have reflected a prudent approach, with minimal uplifts due to the constrained financial position. This approach has resulted in all Council services having to find additional efficiency savings within their approved budgets to cover the impact of price increases. This prudent approach continues in the 2023/24 budget setting process.

1.8

It is proposed that any additional funding secured for 2023/24, that is not specific to government initiatives that must be funded, be retained in the non-earmarked General Fund balance.

1.9

The reality is that sustained real terms increases in general revenue funding are not being delivered, whilst the use of reserves to balance the budget can only be a solution if the contribution is at a sustainable level. There is therefore a continuing requirement to maximise income from all available sources and to reduce the level of General Fund expenditure to bring it more into line with the financial support received.

1.10

The budget increases the use of General Fund reserves to maintain, in cash terms, the Council’s 2023/24 revenue budget only. Services must bring forward, and deliver efficiencies, revenue generations or service reductions during 2023/24 to balance the 2024/25 budget.

1.11

In addition to setting the Council Tax level for financial year 2023/24, the Council is required by law to set a balanced revenue budget by 11 March whereby the level of budgeted expenditure cannot be set at a level greater than the known or realistically anticipated total income for that year.

1.12

Work is ongoing on the updating of the Medium-Term Financial Strategy and Long-Term Financial Plan for the Council. Early indications of the funding gap that the Council could face over a ten-year period are significant. The general recognition that further spending reductions need to be considered in a strategic manner and in the context of potential future income streams are evident. This includes the various wind farm projects being progressed by the Strategic Projects team over the medium-to-long term.

1.13

The Council agreed and set the General Fund budget and Council Tax for 2023/24 based on the allocations in Finance Circular 11/2022. Those allocations in the settlement changed in Finance Circular No 3/2023. The Council’s settlement from the Scottish Government was confirmed in Finance Circular No 3/2023 at £89,936,000 as set out in the table below.

IMAGE: A table under “STRATEGY AND ASSUMPTIONS” compares the P&R Report Feb-23 with Finance Circular 1/2023. It shows Ring-Fenced Grants of £16.114m and £16.113m, Non-Domestic Rates of £11.473m in both columns, General Revenue Funding of £61.479m and £62.350m, and Total General Revenue Funding of £89.066m and £89.936m. The differences are (£0.001)m, £0.000m, £0.871m and £0.870m respectively.

1.14

Accordingly, the General Fund revenue budget for financial year 2023/24 has been set at £100.778m, a decrease of £0.917m from that reported in February 2023. The changes are as follows:

1.15

The reduction in the draw on the General Fund of £1,787,050 represents the £870,000 of additional funding that is not specific to government initiatives that must be funded, and £917,050 of corrections to draft revenue budgets presented in February. For example, on detailed analysis of staffing budgets it was noted that ~ £700k was doubled up in relief staffing national insurance and holiday cover costs. Both elements have been applied to reduce the draw on unearmarked General Fund balances.

2 Headline Grant Settlement Figures

2.1

At Council level, the settlement has delivered an increase in the revenue grant that will be received of £3.712m, as illustrated below:

2.2

The single biggest movement in the settlement has been the increase in general grant funding to meet the 2022/23 pay awards.

2.3

A £0.555m increase in specific grant for ferries funding included in the settlement. However, this ‘increase’ represents a flat settlement from 2022/23 as this amount was received through redetermination as Orkney Transport Grant funding.

2.4

The year on year reduction in Loan Charges support continues with a reduction of £218,000 in 2023/24. Loan charges support will reduce over future years according to the Government profile for repayment of capital debt.

2.5

A review of where loan and leasing charges sit relative to the settlement floor was carried out by the Scottish Government and COSLA during 2018. This review concluded that loan and leasing charges should remain within the floor calculation which should afford the Council some protection in future. With the Government support for servicing debt diminishing, the importance of repaying existing debt is increasingly important.

2.6

The Scottish Government requires local authorities to deliver on the full package of agreed measures as set out in the letter, including the shared priorities which will improve outcomes for local people. The total overall funding package for 2023/24 now includes:

• £260 million to support the local government pay deal and also delivers additional funding to ensure that payment of SSSC fees for the Local Government workforce which will continue to be made on a recurring basis.
• £72.5 million increase to the General Revenue Grant.
• £105 million to give effect to the devolution of Non-Domestic Rates Empty Property Relief.
• Maintained key in-year transfers worth over £1 billion and added a further net £102 million of resource to protect key shared priorities particularly around education and social care.
• £50 million capital to help with the expansion of the Free School Meals policy.
• Additional funding of £100 million to deliver a £10.90 minimum pay settlement for adult social care workers in commissioned services.
• Consolidation of £30.5 million for the homelessness prevention fund.
• £32.8 million of recurring funding to support councils with the continuing cost of previous teacher pay settlements.
• £45.5 million which has been retained to encourage all local authorities to maintain teacher numbers in 2023-24.
• An initial £100 million contribution for non-teaching staff pay.
• £123 million contribution towards the teachers’ pay negotiations.

3 Projected Spending Pressures

3.1

With real terms cuts in the government grant awarded to core Local Government services, the cost of budgeting for inflation has, in recent years, been a significant spending pressure which has had to be partially funded by the Council. The inclusion of a 15% uplift for the high cost of energy prices and a 3% pay award is recommended for 2023/24.

3.2

As a result of these real-terms cuts, Council services will have to find additional efficiency savings within their approved budgets in 2023/24, as well as long term savings for 2024/25 onwards. The September 2022 headline rate of Consumer Price inflation was 10.1%, up from 3.1% in September 2021, although inflation is currently forecast to fall to 4% or 5% by the end of the current financial year. Annex 1 provides details of recommended budgetary adjustments across the main cost and income subjective groupings. The estimated cost of applying these budgetary adjustments is £5,219,000. Note the proposed 15% inflationary increase in property costs is specifically for energy costs.

3.3

Recognising that the Council faces a very difficult task in bringing its revenue budget into line with available resources and a sustainable draw on the Strategic Reserve Fund, services are encouraged to find efficiencies or undertake service redesign within their own service areas to meet any ongoing service pressures.

3.4

No baseline service pressure bids were invited as part of the budget process for 2023/24. This does not mean that there are not latent pressures within Services, rather, due to challenging budget circumstances, it has not been possible for the Corporate Leadership Team to support the principle of growth at this time. This means that Services will have to continue to manage within historic budget envelopes which may in turn impact on outputs and/or performance. However, it is recommended that pressure areas with a total cost of £705,000, be approved for inclusion in the revenue budget, as follows:

Non-recurring pressures:

• Nursery provision — £0.255m
• Braeburn provision — £0.450m

3.5

There are limited options to deal with such a significant spending pressure including:

• An increase in Council Tax.
• An increased draw from reserves, if this can be done in a sustainable manner.
• The cessation of services and cuts in employment.
• An increase in other sources of income.
• A combination of the above.

3.6

At the February 2023 Policy and Resources meeting a 10.0% increase in council tax was agreed.

3.7

The highest Council Tax level in Scotland in 2023/24 is £1,514.73. The average council tax rate for Scotland in 2023/24, band D, is £1,410.38. The rate set for 2023/24 for Orkney is £1,369.21 — 3.0% below the Scottish average, and 9.6% below the highest.

3.8

On 19 December 2022, when reviewing the level of disbursements from the Strategic Reserve Fund used to support General Fund Services and other Council priorities for financial year 2023/24 onwards, the Policy and Resources Committee recommended:

• That a financial contribution of £6,350,000 from the Strategic Reserve Fund to the General Fund be used as a planning assumption as part of the Council’s budget setting process for financial year 2023/24.
• That the Strategic Reserve Fund budget for financial year 2023/24, together with indicative budgets for 2024/25 and 2025/26 which included a contribution towards General Fund services of £6,350,000 be approved.

4 Reserves and Balances

4.1

Section 93 of the Local Government Finance Act 1992 requires Scottish authorities, in calculating the Council Tax, to take into account any means by which Council expenses may otherwise be met or provided for. This includes General Fund reserves and earmarked portions of the General Fund balance but not other reserves the Council is specifically allowed to hold.

4.2

The Council currently holds various earmarked reserves within General Fund balances as part of its longer-term financial management strategy. These earmarked reserves, amounting to £44.273m at 31 March 2023, are held to meet specific commitments, specific purposes or for specific Council priorities.

4.3

Balancing the annual budget by drawing on general reserves may be a legitimate short-term option. However, it is not prudent for reserves to be deployed to finance recurrent expenditure. CIPFA has commented that local authorities should be particularly wary about using one off reserves to deal with shortfalls in current funding. Where such action is to be taken, this should be made explicit, and an explanation given as to how such expenditure will be funded in the medium to long term.

4.4

The General Fund Reserves Strategy report presented to the Policy and Resources Committee at its meeting of 23 February 2023 details the use of earmarked and non-earmarked General Fund reserves. Any use of General Fund reserves made in determining the 2023/24 revenue budget, should only be done on the basis of a sustainable strategy, which ensures that future years’ revenue budgets are not dependent on the unsustainable continuing use of General Fund reserves. The report recommended that £10,631,250 of General Fund reserves be used to balance the 2023/24 budget. By comparison, £2,621,100 was required to balance the 2022/23 budget.

4.5

There is generally no recommended target level of uncommitted General Fund Reserves although a number of local authorities do have a target range of between 2% to 4% of their net revenue expenditure. The General Fund Reserves Strategy report recommends that General Fund non-earmarked balances for 2023/24 be set at 2% of the net revenue budget for 2023/24, with a target balance of approximately £2,000,000.

4.6

Prior to the finalisation of the 2019/20 financial accounts it was recognised that, as a result of the changed financial circumstances brought about by the coronavirus pandemic, maximum flexibility for the Council would be afforded in 2020/21, as well as for the budget setting process for 2021/22, through retaining a higher General Fund non-earmarked balance and limiting debt repayments to minimum scheduled debt repayment levels.

4.7

As a result, several elements from the 2021/22 budget outturn were applied to the General Fund non-earmarked balance rather than to make accelerated debt repayments.

4.8

There is presently much uncertainty regarding the budget outturn for financial year 2022/23, therefore the final draw on the non-earmarked General Fund Reserve in 2022/23 is not yet known.

4.9

The Council also has available a source of funding from its Strategic Reserve Fund. In setting the revenue budget for 2022/23, a contribution of £8.263m of the investment income or interest that would be earned on the Strategic Reserve Fund was budgeted as a means of cushioning savings targets/requirements and to maintain and protect spending and services which might otherwise have been reduced or removed when setting the budget.

4.10

The policy recommended for the use of interest earned on the Strategic Reserve Fund has been to establish a Floor of £175m as at 1 April 2012, which has been inflated by the Retail Price Index (RPI) annually, with sums drawn to support services restricted to what can be accommodated from the headroom above the inflated Floor to maintain, as far as possible, the “real” value of the reserves.

4.11

With the Consumer Price Index (CPI) now the generally accepted measure of inflation in the United Kingdom, it is proposed that the Strategic Reserve Fund Floor should in future be calculated with CPI inflation rather than RPI, effective from 1 April 2021.

4.12

In May 2021, the Investments Sub-committee obtained assurance that the current income focused investment strategy remained appropriate for the Strategic Reserve Fund managed fund investments. While the review confirmed that expected returns in terms of the current strategy were expected to reduce from 5.6% to 5.2% per annum over a rolling three-year period, largely due to the impact of COVID-19 on the global growth forecasts, this level of income is now considered sufficient to support annual distributions of approximately £6.350m per annum and still maintain the value of the Strategic Reserve Fund in real terms.

4.13

The value of the Strategic Reserve Fund usable reserves has been estimated at £212,112,000 as at 31 March 2023. This value is below the “floor”, therefore it is anticipated that, as at 1 April 2023, there is no additional headroom available for financial year 2023/24. The affordability gap is forecast to further increase to £32,711,000 over the three years to 31 March 2026, as the level of disbursements on the Strategic Reserve Fund continues to exceed the amount of forecast growth in real terms.

4.14

To protect the Strategic Reserve Fund in real terms, the Council reduced the reliance placed on the Fund, reducing the annual draw. As budgets have become tighter the reliance on the Strategic Reserve Fund has been increasing, as detailed below:

4.15

A financial contribution of £6,350,000 from the Strategic Reserve Fund to the General Fund be used as a planning assumption as part of the Council’s budget setting process for financial year 2023/24.

4.16

The Council continues to investigate strategic investment opportunities which are anticipated, in the future, to generate returns which will enable the Council to support, and enhance, core services. However, at this time these income streams are unknown. Until such time as accurate forecasts can be made, the Council will ultimately seek to draw on the Strategic Reserve Fund.

4.17

Having regard to the continuing reduction in grant to support repayment of capital debt, it is recommended that, in the event an underspend on General Fund services is realised in 2022/23, it is applied as follows:

• Outwith Orkney Placements — to top up the fund as provision for unplanned placements outwith Orkney of individuals at risk.
• To the setting of the General Fund revenue budget for 2023/24, with excess amounts, if any, being retained for budget setting pressures in 2024/25.

4.19

In light of the current financial climate, the importance of sustaining a sufficient reserve position is pivotal to the financial framework of the Council given the very tight budgets which have to be set for Council services and the inherent risk therein.

5 Council Tax

5.1

The Council Tax is based upon the capital value of domestic properties (as at 1 April 1991) which is determined by the Assessor. Once the capital value of properties is assessed, properties are allocated to one of eight bands.

5.2

Some councils generate relatively high levels of income from Council Tax with, at the higher end, 19% of general income raised from Council Tax. In comparison, Orkney generates less than 11% of general income from Council Tax. This is partially historical, with councils having been tied to their 2008/09 Council Tax rates by the freeze and thereafter, with the exception of 2022/23, only permitted capped increases. The mix of house property bands is a further factor with fewer high banded properties in the islands meaning the Council Tax base is a lot lower.

5.3

The budget announcement by the Deputy First Minister on 15 December 2022 confirmed that the Scottish Government will not seek to agree any freeze or cap in locally determined increases to Council Tax, meaning the Council has full flexibility to set the Council Tax rate that is appropriate for Orkney, with the proviso “that councils reflect carefully on the cost pressures facing the public when setting council tax rates”.

5.4

The 10% Council Tax increase will mean the Council Tax bands for 2023/24 as indicated below:

5.5

In September each year, the Council submits an annual return to the Scottish Government providing details of Council Tax Band D equivalent properties which is used by the Scottish Government in determining the level of revenue support grant for each Council. The number of Band D equivalent properties in Orkney for the September 2022 return was 8,284 and represents an increase of 50 on the previous year’s figure of 8,234.

5.6

An element of non-collection of Council Tax will inevitably occur and it is considered prudent to make a non-collection allowance of 1.0%, thereby reducing the number of Band D equivalent properties by 83 from 8,284 to 8,201. The allowance for non-collection is consistent with the rate applied in previous years.

6 Efficiency Savings for 2023/24

6.1

Largely in recognition of the exceptionally difficult period since the pandemic and the acute pressure that services have been under to maintain existing provision, no efficiency savings have been requested as part of the budget setting process for 2023/24.

7 Target Savings and Future Savings Proposals

7.1

The current level of budgeted expenditure is more than can be sustained through the ongoing support from Scottish Government and locally raised revenue from Council Tax and fees and charges. There is also a high level of risk inherent in propping up the budget through contributions from reserves.

7.2

There is now a requirement, across all Council services, to seek efficiencies, maximise revenues and minimise costs. With reference to section 5 above, Services are again under significant pressure to deliver services within proposed budget inflationary increases for 2023/24. For example, a 1% increase in the budget for the following overheads would result in an additional budget requirement of £170,700:

• Supplies and Services.
• Transport Costs.
• Administration Costs.
• Third Party Payments.
• Transfer Payments.

7.3

The September 2022 headline rate of Consumer Price inflation was 10.1%, up from 3.1% in September 2021. Inflation is currently forecast to fall to 4% or 5% by the end of 2023/24, therefore inflationary pressures will have to be met from within existing service budgets.

7.4

Notwithstanding these pressures, and maintaining the 2023/24 budget in cash terms, there is a requirement for significant and real savings to be made if the Council budget is to remain sustainable in the medium term. Each Service will have to present strategies for implementation during 2023/24, to enable the 2024/25 budget to be balanced.

8 Charging for Services

8.1

On 9 December 2014, the Council approved a revised Corporate Charging and Concessions Policy.

8.2

The importance of charges has increased with the reduction in grant funding and the knowledge that increasing existing charges and introducing new charges are required in order to maintain services or prevent certain services being removed altogether. Inflation, as measured by the Consumer Price Index (CPI) was 10.1% at September 2022, peaking at 11.1% in October, and falling back towards the end of the calendar year. It is therefore recommended that Corporate Directors should look to review and increase existing charges by a minimum of 10% from 1 April 2023, if it is possible to do so.

8.3

There are however exceptions to this where, for commercial or other reasons, application of the charge would result in a reduction in income or where the charges collected by the Council are set by statute; a committee to which the Council has delegated responsibility, or a national body. Nationally determined charges will continue to be adjusted according to the national changes.

8.4

The proposed exceptions where the general increase of at least 10% will not apply are as follows:

• Building Warrant and Planning fees — set nationally.
• Harbour Charges — annual increase considered separately by the Harbour Authority Sub-committee.
• Ferry fares — policy is to match Caledonian MacBrayne increase.
• Car Park and Electric Vehicle charges — annual increases should be considered separately by the Development and Infrastructure Committee.
• Residential Care and Home Care — based on cost of service.
• Very Sheltered Housing — based on cost of service.
• Supported Accommodation — based on cost of service.
• Meals At Home Service — full cost recovery.
• Licensing fees — annual increase considered separately by the Licensing Committee.
• Ship Sanitation Certification — set nationally.
• Marriage / Civil Partnership — set nationally.
• Roads Inspection Fees — set nationally.
• Trade Waste charges — based on cost of service.
• Homelessness rents — set in accordance with the Rapid Rehousing Transition Plan.
• Selected quarry product sales — based on cost plus.

8.5

When calculating increases for the Council charges register, the increased charges will be rounded for ease of collection in accordance with the following charging policy guidance:

8.6

With reference to section 7.2 above, Services have to seek to maximise revenues. This is not always just looking at price increases but could be increasing take up. Services should seek to understand each service cost structure and market and set prices accordingly.

9 Revenue Budget Summary

9.1

The proposed uprating assumptions to be applied to the existing base budget are set out in Annex 1 and total £5,219,000 for 2023/24. The table below indicates the monetary values where increases are to be applied.

9.2

A summary of the net budget movement between 2022/23 and 2023/24 is set out below.

9.3

The 2022/23 pay settlement, inflationary pressures and the cost of the revised pay and grading structure, for example, will require an increased contribution from the General Fund non-earmarked balances, to set a balanced budget for 2023/24. As such a balance of £8,843,200 has been identified from General Fund reserve balances.

Approved Budget Calculation 2023/24

Council Tax Calculation 2023/24

Council Tax Comparison 2023/24

Summary of Approved Service Pressures 2023/24

Summary by Service Area

IMAGE: A table headed “SUMMARY OF APPROVED SERVICE PRESSURES 2023/24” lists Education at £255.0 thousand, Orkney Health and Care at £450.0 thousand, all other service areas at £0.0 thousand, and totals of £705.0 thousand.

Summary by Item

Summary of Settlement Adjustments 2023/24

Summary by Service Area

Summary by Item

Summary of Efficiency Savings 2023/24

Summary by Service Area

Service Committee Budgets

Service Committee Summary

By Committee (General Fund)

By Committee (Non-General Fund)

Notes

For the purposes of the Service Committee Summary, the column headings have been simplified from the information shown within the detailed Service Area Summaries as follows:

Development and Infrastructure

General Fund Services

• Roads
• Transportation
• Operational Environmental Services
• E/Health and Trading Standards
• Economic Development
• Planning

Roads

• Winter Maintenance and Response
• Street Lighting
• Car Parks
• Other Works
• Traffic Management
• Structural Maintenance
• Routine Maintenance
• Quarries Holding Account
• Roads Holding Account
• Garage Holding Account
• Miscellaneous
• Movement In Reserves
• Net Expenditure

Transportation

• Administration
• Co-ordination
• Concessionary Fares
• Support for Operators - Bus
• Support for Operators - Air
• Support for Operators - Ferries
• Airfields
• Orkney Ferries
• Movement in Reserves
• Net Expenditure

Operational Environmental Services

• Burial Grounds
• Refuse Collection
• Waste Disposal
• Recycling
• Environmental Cleansing
• Environmental Holding Account
• Net Expenditure

E/Health and Trading Standards

• Administration
• Trading Standards
• Public Toilets
• Net Expenditure

Economic Development

• Administration
• Business Gateway
• EEC Expenditure
• LEADER Programme
• Regeneration
• Tourism
• Economic Development Grants
• Other Economic Dev. Grants
• Net Expenditure

Planning

• Administration
• Development Management
• Development Planning
• Building Standards
• Archaeology
• Net Expenditure

Education, Leisure and Housing

General Fund Services

• Education
• Leisure Services
• Other Housing

Non-General Fund Services

• Housing Revenue Account
• Orkney College

Education

• Senior Secondary Schools
• Junior Secondary Schools
• Primary Schools
• Early Learning and Childcare
• Additional Support Needs
• Papdale Halls of Residence
• Quality Development
• Administration
• Assistance For Students
• Community Learning and Development
• School Meals
• School Transport
• School Crossing Patrol
• Parent Councils
• Net Expenditure

Leisure Services

• Administration
• Parks and Play Areas
• Healthy Living Centres
• Tourism - Caravan Sites
• Tourism - Hostels
• Sports Development
• Sports Facilities
• Swimming Pools
• Active Schools
• Community Facilities
• Heritage
• Museums
• St Magnus Cathedral
• Libraries
• Net Expenditure

Other Housing

• Housing support
• Homelessness
• Housing Loans
• Energy Initiatives
• Garages
• Miscellaneous
• Housing Benefit
• Landlord Registration
• Care & Repair
• Sheltered Housing
• Student Accommodation
• Net Expenditure

Housing Revenue Account

• Administration
• Tenant Participation
• Property Costs
• Finance Charges
• Rent Income
• Other Income
• Net Expenditure

Orkney College

• Business Support
• Further and Higher Education
• Agronomy Institute
• Orkney Research Centre
• Centre for Nordic Studies
• Net Expenditure

Policy and Resources

General Fund Services

• Central Administration
• Law, Order & Protective Services
• Orkney Health and Care
• Other Services
• Sources of Funding

Central Administration

• Chief Executive's
• Corporate Services
• Finance
• Development & Infrastructure
• I.T and Facilities
• Legal Services
• Apportionment Control Account
• Cleaning Holding Account
• Movement In Reserves
• Net Expenditure

Law, Order and Protective Services

• Civil Contingencies
• Net Expenditure

Orkney Health and Care

• Administration
• Childcare
• Elderly - Residential
• Elderly - Independent Sector
• Elderly - Day Centres
• Disability
• Mental Health
• Other Community Care
• Occupational Therapy
• Home Care
• Criminal Justice
• Integrated Joint Boards
• Net Expenditure

Other Services

• Corporate Management
• Corporate Priorities
• Area Support Team (CP)
• Registration
• Miscellaneous Property
• Payments to Joint Boards
• Elections
• Licensing
• Payments to Third Sector
• Publicity
• Twinning
• Community Councils
• Interest on Loans and Balances
• Miscellaneous
• Cost of Collection
• Finance Charges
• Movement In Reserves

Sources of Funding

• Non Domestic Rates
• Council Tax
• Revenue Support Grant
• Movement in Reserves
• Total Income

Housing Revenue Account

Housing Revenue Account

The Housing Revenue Account deals with the management and maintenance of the Council housing stock.

Harbour Accounts

Scapa Flow Oil Port

• Administration
• Scapa Flow Development
• Oil Pollution
• Environmental Unit
• Marine Officers & Pilots
• Navigational Aids
• Weather Forecasts
• Harbour Launches
• Towage Services
• Harbour Dues
• Finance Charges
• Net Expenditure

Miscellaneous Piers and Harbours

• Miscellaneous Piers
• Administration
• Miscellaneous Piers Development
• Environmental Unit
• Marine Officers & Pilots
• Navigational Aids
• Weather Forecasts
• Harbour Launches
• Oil Pollution
• Pilotage Income
• Movement in Reserves
• Finance Charges
• Net Expenditure

Orkney College

Orkney College

• Business Support
• Further and Higher Education
• Agronomy Institute
• Archaeology Institute
• Institute for Northern Studies
• Net Expenditure

Corporate Holding Accounts

Corporate Holding Accounts

• Repairs & Maintenance GF
• Repairs & Maintenance HRA
• Repairs & Maintenance Piers ALWC
• Repairs & Maintenance Contributions
• Ground Maintenance
• Utilities Holding Account
• Insurance Holding Account
• Telephones Holding Account
• Photocopiers Holding Account
• Postages Holding Account
• Net Expenditure

Strategic Reserve Fund

Strategic Reserve Fund

• Investment Activities
• Investment Properties
• Local Investments
• Conservation Fund
• Travel Fund
• Talented Performers Fund
• Flotta Decommissioning Fund
• Talented Young Persons Fund
• Orkney Memorial Fund
• Renewable Energy Investment Fund
• Movement In Reserves
• Finance Charges
• Net Expenditure

Pension Fund

Pension Fund

• PF Operations
• PF Admitted Bodies
• PF Administration
• PF Investments
• Net Expenditure

Glossary of Terms