Wyre Forest District Council is supporting Local Government Finance Day #futurefunding (24 March) by highlighting elements of its transformation plan – Wyre Forest Forward.
Like many other Councils, Wyre Forest District Council is facing a challenging time financially. The Council does not hold significant levels of revenue reserves but is faced with an ongoing gap between expenditure and funding that must be bridged by use of reserves. From 2015/16 onwards we are taking an average of circa £500k from reserves each year with usable reserves forecast to diminish to just over £1m at the end of our 3 year budget strategy in 2017/18. To combat this we have an approved Transformation Strategy known as Wyre Forest Forward that has made significant progress towards closing our funding shortfall. The following initiatives are examples of our work to reduce costs whilst preserving services to the public and improve the prospects for future budget setting..
New leisure facilities to replace existing aging centres
Wyre Forest has worked over the last four years to achieve the award of the contract to design, build, maintain and operate a single new leisure centre to Places for People, saving £390k a year. The centre is due to open in the summer of 2016, when the existing very well-used but now tired and no longer fit for purpose sites in Kidderminster and Stourport will close and be available for redevelopment. Funding for this major capital scheme includes a successful bid to Sport England for capital funding of £2m assisting significantly with the level of savings. This funding award recognises the quality of the Council’s plans to rationalise provision and invest in modern leisure facilities. The majority of the remainder of the funding is from prudential borrowing that has proved contentious in these austere times. The business case for this scheme makes good financial sense since the cost of servicing the prudential borrowing is significantly less than the Council is currently paying to the current leisure provider for operating the existing centres. Since award of the contract, the first tranches of borrowing have been undertaken at rates significantly lower than had been projected, which will add to the annual savings. Under the new 25 year contract the service provider will be paying the Council an annual fee that has exceeded our business case projections. Sport England will work with the Council and the service provider throughout not only the construction period but also the life of the contract and have congratulated Wyre Forest for what it says is “a brave and forward thinking decision to replace the aging facilities with modern, flexible leisure facilities that will be of ongoing benefit to the community as well as achieving financial savings.” Read more on the Wyre Forest Leisure Centre.
Income generation and channel shifting
Increased income generation to help the Council become more financially remains a key priority. We have an Income Generation working group led by one of our Directors that is doing some innovative cross-cutting work and we are making good progress in generating more income from our services, activities and assets. A more commercially focused approach is being taken where possible with over £90k of additional income generated in 2014-15 mainly from depot-based services and cultural and arts events. We are also “sweating our assets” and have recently welcomed 2 new significant tenants to our new Council offices at Wyre Forest House. These important tenancies will achieve income of £150k in a full year making a valuable contribution to our ongoing property income stream. This work is coupled with our “channel-shift” initiatives where we are encouraging customers to pay by direct debit for regular payments or online for one-off services. For customers who prefer other payment methods we encourage use of the “All Pay” system implemented last year that is available at post offices and other retail outlets.
The Council aims to reinvest capital receipts to stimulate growth and invest in development opportunities by setting up a new “Evergreen Fund”.
The “Evergreen Fund” will be filled by proceeds from selling land and buildings that are either vacant or underused in accordance with resolutions agreed by Cabinet or Council.
This will enable the Council to realise the regenerative benefits of some its less cost effective assets as well as securing some longer-term returns from taking a stake in development potential rather than just disposing of sites.
Linked to this, regeneration is a key priority for the district and significant progress continues to be made. Last summer’s announcement about an investment of £23m by international manufacturing company Amtek in a redundant recycling site on one of the town’s major urban corridors, is a compelling recognition of the benefits of investing and expanding in Wyre Forest. This was achieved in competition with other UK and European sites by working in partnership with the County Council to make an attractive business case for the company to set-up in the district. The supplier to the automotive industry will start production soon with an estimated 500 new jobs created. Read more about new business investment.