The Authority uses an incremental approach to the development of the budget. The existing 2013/14 base revenue budget has been adjusted to reflect the impact of pay and price increases, additional growth needed for new developments, proposed savings and financial efficiencies.
Pay - The budgets for staff costs are adjusted each year to reflect estimates for inflationary pay increases, the movement of staff through grades (increments), changes to employer national insurance and pension contributions and assumptions about the impact of staff turnover. The main area for salary growth results from the application of estimates for nationally set pay awards. Reflecting these changes and incorporating provision for a 1% pay increase across all pay groups, the pay budget for 2014/15 has increased by £819k. In his Autumn Statement on 5 December 2013, the Chancellor announced that public sector pay awards would continue to be restricted and that these should average no more than 1% in 2013/14 and 2014/15.
Prices - A figure of 3% has been allowed for unavoidable and contractual price increases unless there are known inflationary pressures to be applied. For areas of discretionary spend an increase is calculated, but instead of increasing the budgets the sum is taken as a saving so that any pressures are managed through existing budgets or efficiencies.
Pensions - Following two years of no new ill health retirements, the number is expected to increase this year following the introduction of revised medical capability procedures, resulting in an additional cost in contributions to the Pension Fund. This, together with an increase in injury pension payments of 2.5%, has resulted in an additional cost (£66k). The Local Government Pension Scheme (LGPS) sees a new Career Average Revalued Earnings scheme being implemented in April 2014. It is expected that this will cost an additional £43k in employer contributions.
Growth - Growth of £1,313k has been added in 2014/15, supporting the implementation of Control changes and the station build programme, whilst also recognising the removal of one-off grants received in 2013/14.
Savings - The majority of the savings have been made through staff turnover, in both front line and back office functions. Savings in whole-time pay have come entirely from natural wastage, and the Service Support savings have been achieved through a combination of natural wastage, voluntary redundancies and the closure of catering and in-house occupational health facilities. Other savings come from a variety of headings arising from a review of devolved non-pay budgets.
| ||Total |
| Base Budget 2013/14 || 70,936 |
|Pay Growth ||819 |
|Prices Growth ||533 |
|Pensions ||109 |
|Growth ||1,313 |
|Savings || -3,189 |
| Net Budget 2014/15 || 70,521 |