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> NTC Precept Spending, Everything you wanted to know and weren't vexatious enough to ask
Simon Kirby
post Mar 16 2014, 01:32 PM
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You'll probably have noticed the council tax bill plopping onto your mat this week. It's a good time to have a look at where NTC is spending your money. Here's the last five years of budgets with some pretty graphs to illustrate how that spending is evolving. [attachment=194:precept_spending.pdf]

Despite their talk about enabling engagement with local government the Council still don't publish the cost of their services or provide a break-down of where all the administration costs and staffing goes, but from the figures that they do publish in the precept leaflets and the Income and Expenditure account it's not too difficult to work it all out.

For example, this is how the council's inefficiency has been steadily creeping up in the last few years. It's a graph over time of the administration costs as a fraction of total spending. You'll see that in 2010 spending on back-office administration was 26% of everything that the council spent, and that's pretty dire really, but by 2014 the picture is even worse with the council spending more than 31% of its revenue on back-office administration. This steady increase of inefficiency is the result of a failure to manage.


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Simon Kirby
post Mar 16 2014, 01:40 PM
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Here's how the cost of providing the allotment service has steadily increased. The service is an important source of busy-work for the council providing a pretext of almost £100,000 of the precept, so it's not a service the council will be in any hurry to lose even though other councils routinely provide their allotment service at zero cost to the precept payer through devolved self-management.

Note particularly how the council's staffing costs dwarf the rental revenue, despite Newbury's allotments being in the upper quartile of rents nationally.


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Simon Kirby
post Mar 16 2014, 01:48 PM
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Civic Duties is something of a growth industry for NTC. It has been defended in terms of the social benefits to people of seeing their ceremonial mayor and the importance of the annual church parade, but the real cost is in the staffing and it isn't readily apparent how such a large administration costs is justified. There no particular need for the town council to contribute any costs to a church parade which in any event costs next to nothing to organise, and no particular reason either why the precept-payer should be taxed to dress the parading councillors as seventeenth century pirates.


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Simon Kirby
post Mar 16 2014, 01:55 PM
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This is the Town Hall costs. The Town Hall is particularly expensive as office accommodation but that's not particularly down to the maintenance of the building but is largely because of the staffing costs, and it isn't readily apparent why the administrative costs of providing the offices should be so high.


Town Hall costs contribute to the back-office overheads which are apportioned amongst the services to find the full commercial cost of providing that service.


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Simon Kirby
post Mar 16 2014, 03:02 PM
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And here is the budget for 2014/15


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Cognosco
post Mar 16 2014, 03:19 PM
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QUOTE (Simon Kirby @ Mar 16 2014, 03:02 PM) *
And here is the budget for 2014/15


New Town Motto to go on Town Flag? tongue.gif

"Never in the field of human efficiency
Has so little been achieved by so few
For such high cost" rolleyes.gif



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Exhausted
post Mar 16 2014, 03:52 PM
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Simon, the 44 pages of annual accounts and the pretty graphs, where have they originated or is this all your work. Just asking.

And,


For example, this is how the council's inefficiency has been steadily creeping up in the last few years. It's a graph over time of the administration costs as a fraction of total spending. You'll see that in 2010 spending on back-office administration was 26% of everything that the council spent, and that's pretty dire really, but by 2014 the picture is even worse with the council spending more than 31% of its revenue on back-office administration. This steady increase of inefficiency is the result of a failure to manage.

The quoted spend on admin costs at 31%. How does that figure work out. Perhaps you could help me out there.
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Simon Kirby
post Mar 16 2014, 04:36 PM
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QUOTE (Exhausted @ Mar 16 2014, 03:52 PM) *
Simon, the 44 pages of annual accounts and the pretty graphs, where have they originated or is this all your work. Just asking.

The figures on expenditure and income (in yellow boxes) are all the council's, taken from the published Income and Expenditure report that I linked to. The precept breakdown that itemises the fraction of the precept that funds each service is also the council's, taken from the precept leaflet which I also linked to.

The council don't publish the total cost or staff costs for each service, but you can reverse-engineer these figures from what they do publish, and that's what I've done.

The total cost of all services is the precept plus any other income such as investments and whatever is taken from reserves to balance the budget. As it happens that's not exactly the figure that the council use in preparing the precept breakdown, but because there are a couple of services that have no staff costs such as the flood alleviation, WBC toilets, and neighbourhood wardens, I can work out what figure the council actually used and reconstruct the staff costs with that figure, and then balance the budget separately later. It doesn't actually make a lot of difference because the budget balances whatever, but it does slightly affect how the costs are apportioned and that gives the council something to whine about - despite the error being there's.

Getting the individual service costs is just a matter of dividing up the total service cost in the ratio of the published precept breakdown.

Given the individual service costs you can get the individual service turnover by adding the published service revenue.

Taking away the published service expenditure from the service turnover gives you the remaining service expenditure which is the staffing costs and some other costs that the council apportion to services such as bank charges and VAT contingency, and you can isolate the staff costs because you know what the total staff costs are.

To get the full commercial cost of the services I apportion the back-office overheads of admin, town hall, election expenses, and young people's council in proportion to the service staff costs which is a standard accounting methodology.

QUOTE (Exhausted @ Mar 16 2014, 03:52 PM) *
For example, this is how the council's inefficiency has been steadily creeping up in the last few years. It's a graph over time of the administration costs as a fraction of total spending. You'll see that in 2010 spending on back-office administration was 26% of everything that the council spent, and that's pretty dire really, but by 2014 the picture is even worse with the council spending more than 31% of its revenue on back-office administration. This steady increase of inefficiency is the result of a failure to manage.

The quoted spend on admin costs at 31%. How does that figure work out. Perhaps you could help me out there.

Taking the service costs above I divide the cost of the back-office overheads of admin, town hall, election expenses, and young people's council by the total cost of everything, and that gives me the relative cost of the back-office overheads. I then compare in the graph how that relative cost has evolved over time from 2010 to 2014.


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NWNREADER
post Mar 16 2014, 04:51 PM
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So, some graphs are a straight lift from NTC information while others are an interpretation by you. Cool with that, but where you have applied 'interpretation' is there an alternative slant that produces different (but arguably equally valid) outcomes?
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Simon Kirby
post Mar 16 2014, 05:30 PM
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Take for example the Market service. The council publish that the expenditure is £24,185, the revenue is £40,000, and the cost to the precept payer is £0.71 out of a total precept charge of £75.66.

The council also say that the expenditure for Neighbourhood Wardens is £53,000 and that the cost to the precept payer is £4.22. I know that the only cost for the Neighbourhood Wardens line is the £53,000 that is passed to WBC and that there is no NTC staff costs, so I can infer that the total service cost is 75.66/4.22x53,000 = £950,232.

I can say then that the net cost of the Market is 0.71/75.66x950,232 = £8,917.

Adding the revenue to the net service costs gives me the service turnover of 40,000+8,917 = £48,917.

Removing the service expenditure gives me the other service costs of 48,917-24,185 = £24,732.

I can work out the total non-expenditure costs for all services like this, which works out to be £403,719, and I know from the Income and Expenditure report that the total staff costs are £388,261, and so I can see that the staff costs for the Market are 388,261/403,719x24,732 = £23,785.


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Simon Kirby
post Mar 16 2014, 05:41 PM
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QUOTE (NWNREADER @ Mar 16 2014, 04:51 PM) *
So, some graphs are a straight lift from NTC information while others are an interpretation by you. Cool with that, but where you have applied 'interpretation' is there an alternative slant that produces different (but arguably equally valid) outcomes?

No, the council don't publish any of the information that I have inferred. They should. My reconstruction makes some assumptions about how stuff like capital spend gets apportioned and how transfers to and from reserves are accounted for, and getting that wrong can create some minor but annoying inconsistencies - the budget still balances, but you get stupid anomalies like negative staff costs popping up. I am happy that my reconstruction is reasonable and consistent, but it is a reconstruction and it's possible that the council's actual underlying information is a little more irregular, although I would argue if that were the case then my consistent reconstruction would actually be a more valid interpretation of what they have published and the problem would be with them publishing a summary that distorts the underlying reality - that can happen.

All I am trying to do here is recreate the information that the council already use to create the precept breakdown, so it would really help if they simply published that information themselves. They don't like to though, because they don't like people looking at the actual cost of services or the reality of their staff costs, but without that information it is impossible to engage meaningfully with the council's budget - and they know it!


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Exhausted
post Mar 16 2014, 06:49 PM
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I have to agree with you on the admin costings according to the leaflet on the precept.

Administration at 10.26%
Accounts staff costs at 5.83%
Council & support staff costs at 4.9%
Civic duties at 6.05%
and
Direct committee expenditure at 1.88%

This works out at 28.92% in administration costs
With an income figure of precept income plus their figure for "total income" at £1,112,171, this is a real cost of £321,640 for admin.
This does not include the cost of running the Town Hall at 9.12% £101,430

Can this be right. When it is seen as real cost in pound notes, then it doesn't look too good.

This is more than we spend on our parks and open spaces £313,000
It seems to me that the Christmas lights will cost us £26,500 as well.
The market £10,500 and the allotments £50,700


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Simon Kirby
post Mar 16 2014, 07:38 PM
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QUOTE (Exhausted @ Mar 16 2014, 06:49 PM) *
I have to agree with you on the admin costings according to the leaflet on the precept.

Administration at 10.26%
Accounts staff costs at 5.83%
Council & support staff costs at 4.9%
Civic duties at 6.05%
and
Direct committee expenditure at 1.88%

This works out at 28.92% in administration costs
With an income figure of precept income plus their figure for "total income" at £1,112,171, this is a real cost of £321,640 for admin.
This does not include the cost of running the Town Hall at 9.12% £101,430

Can this be right. When it is seen as real cost in pound notes, then it doesn't look too good.

This is more than we spend on our parks and open spaces £313,000
It seems to me that the Christmas lights will cost us £26,500 as well.
The market £10,500 and the allotments £50,700

I've argued previously for Civic Duties to be treated as as administration overhead but I'm not doing that myself any more as I think Civic Duties is properly seen as a service, albeit a service that doesn't serve the public very well. I do though definitely include Town Hall as an administrative overhead because I know it has some prestige value but it is essentially just office accommodation and should be compared with the cost of other office accommodation available in and around the town.

The council haven't previously broken their administration costs down into Administration, Accounts staff costs, and Council & support staff costs, and have previously lumped those all together under Administration in the precept leaflet, so I keep them together under Admin so this year remains directly comparable with previous years.

So by my reckoning administration is Administration, Accounts staff costs, Council & support staff costs, Town Hall, Newbury Youth Council, and Election Expenses.

I include the last two because they are both part of the machinery of the council's operation.

The Committee head is a catch-all slush fund for councillors to spend on pet projects. It is accounted for quite differently in the Income and Expenditure account and you have to take out a bunch of stuff like all the various things that are accounted for in the precept leaflet as grants, as well as the NYP, Neighbourhood Wardens, WBC Toilets, and maybe some other stuff too, I forget. It's not admin as far as I can tell, it's just not very worthy service spending.

You need to work out the net service cost rather than the turnover, so don't include the revenue. If you the lump in the revenue you effectively apportion it across the services by expenditure, but a service's revenue is applied entirely to its own service. Once you have the net service cost you can add the service revenue to get the service turnover.

But yes, £296,398 for back-office administration (so accounts, reception desk, office accommodation, phones and photocopiers, etc) from a precept of around £950,000 is lousy.


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Simon Kirby
post Mar 16 2014, 07:48 PM
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QUOTE (Exhausted @ Mar 16 2014, 06:49 PM) *
I have to agree with you on the admin costings according to the leaflet on the precept.

I have to admit though, I'd completely missed that I could have calculated the admin directly from the precept leaflet as you did - d'oh! Same result, it's just it's much easier your way!


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Cognosco
post Mar 16 2014, 07:55 PM
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QUOTE (Exhausted @ Mar 16 2014, 06:49 PM) *
I have to agree with you on the admin costings according to the leaflet on the precept.

Administration at 10.26%
Accounts staff costs at 5.83%
Council & support staff costs at 4.9%
Civic duties at 6.05%
and
Direct committee expenditure at 1.88%

This works out at 28.92% in administration costs
With an income figure of precept income plus their figure for "total income" at £1,112,171, this is a real cost of £321,640 for admin.
This does not include the cost of running the Town Hall at 9.12% £101,430

Can this be right. When it is seen as real cost in pound notes, then it doesn't look too good.

This is more than we spend on our parks and open spaces £313,000
It seems to me that the Christmas lights will cost us £26,500 as well.
The market £10,500 and the allotments £50,700


The Business standards recommends an Administration cost of 2.5% - 3.5% so you can see just how efficient our local council really are? rolleyes.gif

But of course I haven't said a word have I? cool.gif


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NWNREADER
post Mar 16 2014, 08:26 PM
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Strikes me an NTC resident should put a question to NTC.......
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Simon Kirby
post Mar 16 2014, 08:41 PM
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QUOTE (NWNREADER @ Mar 16 2014, 08:26 PM) *
Strikes me an NTC resident should put a question to NTC.......

Last time I did that they publicly humiliated me with a life-long declaration as a vexatious complainant. You'll understand that I have no intention of putting myself in that position again.


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Simon Kirby
post Mar 16 2014, 08:58 PM
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QUOTE (Simon Kirby @ Mar 16 2014, 07:48 PM) *
I have to admit though, I'd completely missed that I could have calculated the admin directly from the precept leaflet as you did - d'oh! Same result, it's just it's much easier your way!

And following Exhausted's suggestion, here's the calculation of the Admin Fraction directly from the precept leaflet alone.

A steady deterioration of an already poor efficiency then.


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Strafin
post Mar 16 2014, 11:50 PM
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QUOTE (Simon Kirby @ Mar 16 2014, 08:41 PM) *
Last time I did that they publicly humiliated me with a life-long declaration as a vexatious complainant. You'll understand that I have no intention of putting myself in that position again.

If you are already considered to be vexatious for life, then maybe you are the best person to question them, they can't label you twice! wink.gif
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NWNREADER
post Mar 17 2014, 12:48 AM
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QUOTE (Simon Kirby @ Mar 16 2014, 08:41 PM) *
Last time I did that they publicly humiliated me with a life-long declaration as a vexatious complainant. You'll understand that I have no intention of putting myself in that position again.

I doubt you are the only resident.....
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