The National Assembly for Wales Commission Budget Proposals 2009-10 - Guidance
Introduction
1. May 2007 saw the creation of the Assembly Commission under the Government of Wales Act 2006. The Commission is responsible for the provision of property, staff and services to support the National Assembly for Wales, and its purpose is to make the Assembly an accessible and effective parliamentary body that inspires the confidence of the people of Wales.
2. The budget is used to meet the running costs of the National Assembly for Wales and consists of Assembly Members’ and Office Holders pay and allowances; the salaries of the staff of the Assembly - committee clerking teams, researchers, staff supporting the legislative processes, parliamentary translation and reporting staff, legal advisers, visitor services and outreach staff and those in operational support services such as security, accommodation, HR, finance and ICT; and the cost of goods, services and facilities used in the day to day operation of the Assembly.
Budget overview - the context
3. The Budget proposals for 2009-10, laid on 15 October, represent the culmination of considerable activity by the Commission and its staff in preparing a budget that reflects our strategy of tight, steady financial management and increasing efficiencies where possible.
4. In May this year the Commission considered the financial impacts and outcomes of a range of service proposals for inclusion in the Budget. These initial proposals were categorised on a priority basis, and the June meeting of the Commission indicated that lower priority proposals together with the significant i
-change programme should be excluded from the Budget. Commissioners also decided to exclude any potential changes resulting from the review of Assembly Members’ pay and allowances due to report in 2009.
5. A Budget of £48.398m was put before the Commission in early September and represented a 4.8% increase on the budget for 2008-09. The Commissioners considered this Budget and decided that current economic conditions, and their impact on the public sector and the people of Wales, did not support an increase of this level. Commissioners concluded that any increase should be restricted to circa 3.5%.
6. A revised Budget for 2009-10 of £47.751m (3.4% increase) was subsequently agreed by Commissioners in readiness for it to be laid on 15 October.
Comparison 2008-09 to 2009-10
7. Table 1 below provides a broad outline of how the budget figure was calculated. This has been achieved against both actual and anticipated increases in committee and legislative activity outlined in paragraphs 11 to 15 of the Budget document.
Table 1
Starting point - the 2008-09 budget: |
£m 46.181 |
|
Remove one-off costs: We take off costs which were one-offs during 2008-9, which won’t recur in future years. We don’t need the budget for these anymore (see table 2) |
-0.875 |
|
Take account of recurring efficiencies: Some of the cash efficiencies generated during 2008-09 will have a recurring effect in future years (see table 3) |
-0.239 |
|
Add-in Inflation: We add price and pay inflation, consisting of: an estimate for price inflation on procured goods and services of £0.351m (0.76%); £0.341m (0.74%) for estimated inflationary costs on Members’ and Office Holders pay and allowances; and, £0.480 (1.0%) to fund the existing commitment to incremental progression and the third year of a three-year pay settlement for staff of the Commission. It is recognised that the proposed price inflation increase is below the current levels of consumer price inflation. This may lead to pressure on the budget, but will be managed through the Commission’s financial performance management framework. |
1.172 |
|
Add-in new spending plans: We add the cost of new plans aligned with the Commission’s Strategic Goals, as explained in Annexes 2 and 3 of the Budget document (see Annex 1). |
1.512 |
|
This gives the budget for 2009-10: |
47.751 |
8. So, comparing the £47.751m for 2009-10 with the £46.181m for 2008-09 gives a budget increase of 3.4%. As a comparator this is broadly in line with the indicative budget for 2009-10 of £47.566m outlined in last year’s budget proposals.
What was removed from the Budget to reduce it from £48.398m to £47.751m?
9. The reduction of £0.647m was achieved by: reducing proposed expenditure on new archiving arrangements by putting on hold the aspects relating to archiving AV/Video streams (-£0.270m); not proceeding for the time being with the recruitment of an additional lawyer (-£0.077m); reducing the level of planned maintenance on the Assembly estate (-£0.050m); and, for the first time, introducing a formal target for achieving in-year cash savings and efficiencies (-£250m).
Have we underestimated our resource requirements?
10. We think not - the Budget as laid includes resources at a level sufficient to deliver our key objectives:
Accommodation and facilities for the Assembly to undertake its work;
370 staff in the Commission to support this work;
ICT provision - hardware, software, broadcasting and the website;
Outward facing activities to engage with people across Wales.
11. We are mindful of the pressures that we are likely to face over the course of the year in view of the current economic conditions and the resulting pressures on the public sector and people in Wales. We’ve scaled back some of the new plans we were hoping to take forward and have introduced a new cash efficiency target to restrict the cost of the revised plans. We monitor budgetary performance closely through the year to enable us to anticipate and plan for changing demands and circumstances. We also regularly review our performance over a range of Key Performance Indicators, including financial and efficiency targets, and corporate project milestones, to ensure we deliver the services and standards expected of us, within the resources available.
12. We have flagged our assumptions in the document, particularly in relation to a number of additional developments on the horizon that could impact on the Commission’s budget, most notably a major review of ICT-related services to the Assembly and to improve and further support the Assembly’s ability to widen public engagement (i-change),
and the independent review panel of support to Assembly Members which will be reporting in 2009. We have said that it is not possible at the current time to estimate accurately the potential costs of these developments, though the ICT costs are likely to be significant and to span a number of years. Depending upon costs and savings generated during this period, the Commission may need to consider a supplementary budget request during the course of 2009-10.
Performance Management Framework
13. Our framework for managing the organisation’s corporate performance consists of:
The system of internal control - this is the totality of policies, procedures and practices relating to governance, risk and the management of resources;
Agreed strategic goals and organisational values providing the focal point for service-based business plans and individuals’ Performance and Development Management Reviews;
A monthly financial management report on performance against budget;
A monthly HR dashboard report on the Commission’s staffing performance indicators;
A monthly Key Performance dashboard of key performance indicators, key project milestones, satisfaction measures and significant risks;
A Management Board progress report to meetings of the Assembly Commission;
An annual interim and year-end review of the effectiveness of the system of internal control in supporting achievement of the Commission’s goals.
14. Table 2: Non-recurring costs in the 2008-09 budget, removed for 2009-10:
Description |
Service |
Amount |
Pierhead Futures redevelopment project - capital set up costs. |
External Communications |
£ 500,000 |
Capital set up costs to establish a Crèche. |
Facilities Management |
£ 350,000 |
ICT Consultancy to support the Commission’s finance system. |
Financial Services |
£14,000 |
Reductions across a number of budget allocations to reflect demand. |
Corporate Unit |
£11,000 |
Total |
£875,000 |
15. Table 3: Efficiencies and savings in the 2008-09 budget, removed for 2009-10:
Description |
Service |
Amount |
Service restructuring - removal of two administrative support posts following a review by the Head of Corporate Unit combining the work in to other roles. |
Corporate Unit |
£52,000 |
Internal service restructuring incorporating the Fees Office into HR and combining roles. |
Human Resources |
£134,000 |
Renegotiation of lease and reduction in rent payable for the North Wales Office |
Facilities Management |
£22,000 |
Restructuring - removal of one administration post |
Financial Services |
£27,000 |
Reduction in stationery budget |
ICT |
£4,000 |
Total |
£239,000 |
Efficiencies and savings
16. To date, the Commission has targeted efficiencies and savings so as to release funds for redeployment elsewhere within our budget. In the past, we have used such savings to absorb the costs of, for example, the Royal Opening of the Third Assembly, the refurbishment and extension of the Members’ Restaurant, and modernisation of areas of Tŷ Hywel office accommodation.
17. Our Budget for 2009/10 sets a cash efficiency target of £0.250m - this is a saving we must find during the year in order to remain within budget. We’ll be keeping it simple - it is all about saving money and working smarter, without compromising our services and standards. In addition, we will set a further efficiency target to release funds for redeployment within our budget. In the current year, this target is £300,000. The combined efficiencies and other savings will come from a range of enhanced financial management measures, including effective oversight of staff related costs, critical assessment of project costs and phasing and improved monitoring of spending. Before the year begins and during its course we will identify a range of specific actions through reviews of key systems so that we can improve delivery while saving costs.
Changes in staffing levels
18. Some of our new spend relates to an increase in staffing since the 2008-09 budget was approved. In the current year these are funded via the Commission’s contingency budget, but for 2009-10 onwards they need to be incorporated in the baseline budget. New posts are subject to business cases being approved by the Chief Executive or relevant Director. We’ll have circa 370 funded posts in place at April 2009, compared with 360 at April 2008. The increase in posts relates to: an additional lawyer; two new Heads of Service - Assembly Resources and ICT/Estates; a Financial Controller; a Sustainability Coordinator; a Procurement Officer; an Accommodation Projects Manager; and administrative support in a number of areas, including the Members’ Helpdesk.
New Spend Proposals
19. Please see Annex 1 for details on the new spending proposals for 2009-10.
Capital projects and capital charges
20. Last year, the Finance Committee expressed concerns at the level of changes made in our budget for capital projects and capital charges. We gave assurances that this repatriation of budgets from the Welsh Assembly Government to the Assembly Commission was a one-off event reflecting the change in responsibilities and budgetary authority arising from the Government of Wales Act 2006. We confirm this remains the case.
21. Our capital budget will change annually according to the level of capital investment, under accounting terms, we choose to undertake. The Committee will note that for 2009-10 this is £0.709m. We liaise with Assembly Government colleagues who consider the wider issues of Government controls on capital investment.
22. Increases in capital spend in 2010-11 and 2011-12 relate to the ICT strategic replacement programme, for example: replacing hardware and software in the Senedd; replacing Members ICT equipment following the 2011 elections.
Contingency Budget
23. Commissioners considered the level of contingency for 2009-10 and agreed that the level of 2% should be maintained. For simplicity, this has been rounded to £1m (2.09%). Our outturn for 2007-08 was within 1.6% of the budget (underspend), and this, coupled with financial performance to date this year, informed our decision for 2009-10.
Further analysis of the Budget (Annexes)
24. These are self explanatory and are included for information purposes and to provide a clear indication of how the proposed budget will be spent during 2009-10.
Annex 1: New spend proposals – the detail
Annex 2 - compares the different areas of expenditure and income for actual costs 2007-08, the budget for 2008-09 and the proposals for 2009-10
Annex 3 - provides a breakdown of other administrative and accommodation costs for 2009-10
Annex 4 - provides details of Assembly Members and Office Holders salaries together with a description of the allowances payable to Assembly Members
