Car Park Redesign – Financial Options

Introduction

This paper follows on from the Redesign Board Workshop held on Tuesday 15 May 2018.

The options set out below are in relation to off-street car parks and should be considered in the context of underlying traffic management requirements.

Members asked that further work be undertaken to identify options coupled with relevant financial data. The following briefing note explains 3 options which can be implemented for use in 2019/20, together with implications and potential timeframes.

Members are invited to consider and guide officers on which of the options below should be progressed.


Option 1 - The Current Model

At present, car park revenue and expenditure is accounted for centrally and reported as a single line item on the Community Services budget monitoring report to Environment, Development & Infrastructure committee.

Any budget surplus is utilised corporately to manage the overall budget. Any deficit would require to be managed within the overall Service budget.

The current Service budget is set out as Appendix 1

This model could be maintained and used to report on additional car parks that may be brought within the charging regime.

Pros

• Simplicity of reporting and management.

• Reflects current practice with use of existing processes.

• Is familiar to Members.

• Permits balancing of surpluses and deficits across the car park estate.

• Allows investment to be funded from surpluses achieved corporately.

• Permits consistency in application of tariffs.

Cons

• There is no local committee input so does not support the Council’s Programme commitments on localism.

• Less transparency on how car parking income is used.

• Less opportunity for meaningful community engagement.

• Poor correlation between income raised locally and monies spent locally

• Limited scope for local tariff variations.

• As budgets become more constrained, there will be continued pressure to raise income to off-set service reductions/job losses but the current model does not enable that to be informed by local circumstances, options and decision-making.

• Is not consistent with the car park review recommendation that revenue & expenditure should be disaggregated.

Timeline

This is deliverable immediately but does not support the agreement so far in the Board for car parking to contribute to localism objectives. The review scope would have to be adjusted and the review would be more limited.


Option 2 – Limited Local Budget Control

Car Parking revenue and expenditure for each area could be reported through local committees and, as now, separated from the Community Services disaggregated budget.

The table at Appendix 2 shows the assumptions for each area for 2018/19

Decisions on tariffs to be applied and lists of car parks for inclusion would be made by local committees and in the context of the income targets set annually by the Council as part of its overall budget setting process. The income target relates to the amount of income generated that is pooled regionally.

Those areas generating a surplus would be given a proportional share of the net surplus, i.e. any surplus generated above the income target set by the Council. Where income targets are not met, the deficit creates a budget pressure. The budget pressure can be off-set by using the surplus in one area meeting the deficit in another.

Pros

• Permits balancing of surpluses and deficits across the car park estate.

• It provides for some local decision making.

• Greater transparency in how surplus car parking income is used.

• Enables local variation of tariffs.

Cons

• Limited correlation between income raised locally and monies spent locally.

• Additional layer of complexity of reporting and management.

• Less familiar to Members.

• An element of monies raised locally is used to fund deficits elsewhere

• Limits local motivation to maximise revenue.

• Limits the local committees’ ability to base community engagement on local benefits accruing from parking charges due to the weaker linkage between revenue generated and funds available locally.

• Requirement to manage inconsistency in application of tariffs across Highland.

Timeline

This is deliverable for 2019/20.


Option 3 – Extended Local Budget Control

Car Park revenue and expenditure is fully included in the Community Services disaggregated budget.

Decisions on tariffs to be applied and lists of car parks for inclusion would be made by local committees.

A revenue target would be set by Council for each area to account for existing corporate saving targets.

Surplus revenues would be retained by local committees for expenditure against relevant local priorities.

Any deficits would need to be met from reductions in other disaggregated budget lines, subject to statutory requirements.

Both surpluses and deficits would be applied to the following year’s budget.

It is likely that future increased corporate savings targets might be applied against the car park estate within the local area and may include any new car parks.

The table at Appendix 3 gives an indication of what a disaggregated budget report might look like

Pros

• Extended local budgetary control.

• Improved opportunities for local benefit.

• Improved scope for meaningful engagement.

• Local accountability for deficits.

• Opportunities to sell the benefits of car park tariffs.

• Provides for stable corporate budget planning.

• Builds on current practice, emphasising the disaggregated budget.

• Allows for local budget planning.

• Scope for future development of this model to full local responsibility for the budget, income and savings, including a review of the apportionment of the Community Services disaggregated budget. It is unlikely this could be developed in time for 2019/20.

Cons

• No scope for future deficit transfers across areas.

• Locks in existing deficit transfers.


• Lacks transparency in current apportionment of budgets across areas (historically based budgets) which could hamper meaningful community engagement.

• Reduction in flexibility to improve assets/facilities as surplus revenue raised in one area will not be available for expenditure elsewhere.

• Risk of surplus car park revenue being required to meet one-off deficit on other disaggregated budget lines.

• Additional layer of complexity of reporting and management

Timeline

This requires additional work involving the Community Services Management team and Corporate Resources together with assessing workforce planning implications in delivering advice to local committees.

With appropriate support, this could be delivered in 2019/20.

Summary

Board Members are asked to:

• Deliberate on the options;

• Confirm if there are other pros and cons to include for the options;

• Provide a steer to the review team on which option they seek to have work progressed.


APPENDIX 1

COMMUNITY SERVICES

Revenue Expenditure Monitoring Statement

1 April 2017 to 31 March 2018 Financial Detail

BY ACTIVITY

£000 £000 £000 £000 Actual Annual Year End Year End YTD Budget Estimate Variance Roads and Transport Winter Maintenance

6,269 4,582 6,269 1,687 Roads Maintenance

5,332 5,898 5,332 (566) Engineering Services

1,830 1,632 1,830 198 Flood Alleviation

24 57 24 (33) Lighting Services

3,375 3,366 3,375 9 Integrated Transport Services

651 697 651 (46) Subsidies and Concessionary Fares

7,352 7,356 7,352 (4) School Transport

8,610 8,610 8,610 0 Car Parks

(870) (829) (870) (41) 32,573 31,369 32,573 1,204 Environmental and Amenity Services Refuse Collection

779 702 779 77 Waste Disposal

12,850 12,743 12,850 107 Recycling

9,583 9,304 9,583 279 Street Cleaning

1,868 1,915 1,868 (47) Public Conveniences

1,300 805 1,300 495 Burials and Cremations

(1,139) (979) (1,139) (160) Grounds Maintenance

1,573 1,685 1,573 (112) Amenity Services

828 867 828 (39) Environmental Health

1,919 2,153 1,919 (234) 29,561 29,195 29,561 366 Trading Operations Harbours and Ferries

(3,474) (2,824) (3,474) (650) (3,474) (2,824) (3,474) (650) Administration Management Overheads

854 718 854 136 Stores and Depots

1,907 1,847 1,907 60 Vehicle Maintenance Trading Account

(68) (367) (68) 299 2,693 2,198 2,693 495

SERVICE TOTAL

61,353 59,938 61,353 1,415

BY SUBJECTIVE

Staff Costs

60,988 Other Costs

87,317 Gross Expenditure Grants Other Income Total Income

61,353 59,938 61,353 1,415

61,201 85,408

60,988 87,317

(213) 1,909 148,305 146,609 148,305 1,696

(1,107) (85,845)

(156) (86,515)

(1,107) (85,845)

(951) 670 (86,952) (86,671) (86,952) (281)


Appendix 2

Community Services Parking Budget 2018/19

Core Parking Service

Caithness Inverness Lochaber Nairn Ross &

Cromarty

Skye Sutherland TOTAL

Parking Revenue 690,000 40,000 0 2,189,200 829,500 0 0 100,100 0 3,848,800 Additional Revenue* 128,000 64,000 172,000 30,000 25,000 419,000

Less: Expenditure -900,700 -1,100 -13,500 -474,800 -95,500 -13,800 -44,500 -18,500 -13,300 -1,575,700 Net Parking Revenue -210,700 38,900 -13,500 1,714,400 862,000 50,200 127,500 111,600 11,700 2,692,100

*Agreed at Budget on full year basis

Badenoch & Strathspey


Appendix 3 COMMUNITY SERVICES - SUMMARY DISAGGREGATED AREA BUDGETS 2018/19 REAL CASH BUDGETS ONLY

Badenoch

& Ross & Strathspey Caithness Inverness Lochaber Nairn Cromarty Skye Sutherland Total FUNCTION/ACTIVITY No of Employees 30 60 126.69 50 23 108 42 84.41 524.1 (including seasonals)

£ £ £ £ £ £ £ £ £ Labour 716,600 1,500,865 3,021,110 1,269,600 557,000 2,641,150 1,028,200 1,986,450 12,720,975

Plant 293,500 877,100 1,096,880 554,400 243,200 1,347,900 697,900 949,965 6,060,845

Winter maintenance 184,400 153,600 284,600 57,000 41,900 302,400 296,000 335,500 1,655,400

Roads maintenance 77,100 68,500 89,800 72,600 62,900 191,600 62,100 180,100 804,700

Public conveniences 33,100 47,400 72,200 75,500 21,400 212,961 71,400 56,500 590,461

Burials 13,300 16,800 40,000 11,300 16,800 37,100 17,500 8,700 161,500

Grounds maintenance 19,600 17,000 83,700 40,000 14,000 33,800 20,000 6,000 234,100

Play areas maintenance 3,000 6,500 8,300 7,000 2,000 24,300 2,000 3,800 56,900

Street cleansing - 3,000 20,000 22,000 - 12,200 200 11,000 68,400

Roads capital works 486,263 785,013 1,132,321 858,888 297,107 1,522,992 807,202 1,040,215 6,930,001

SURPLUS PARKING REVENUE ? ? ? ? ? ? ? ? ?

TOTAL 1,826,863 3,475,778 5,848,911 2,968,288 1,256,307 6,326,403 3,002,502 4,578,230 29,283,282