UNITARY CORNWALL’S COSTS AND SAVINGS (2)
6 March 2009
The other day in a House of Commons debate there was a reference to the costs of transition to the unitary council in Cornwall as £42.5 million (Hansard 24 February 2009 column 20WH). At first sight this looks alarmingly different from the figures usually quoted: see my post Unitary costs and savings 1.
Let me explain. They are the costs over four years. The details are found here in the Benefits realisation plan presented to the 10 February 2009 meeting of the Finance and Performance Group, a committee of the Implementation Executive of councillors which is overseeing the move to a unitary council.
We can now see more clearly the disposition of costs and savings associated with the creation and first four years of the new unitary council.
Over the four years 2008/09-2011/12 the new council will have total transition costs – the costs of setting it up, implementation costs – of about £42.582 million. It will make total savings over those four years of £71.592 million. A simple subtraction gives a total of usable savings of £29.010 million over the four years.
The Benefits realisation plan says the unitary council will generate “planned ongoing savings of over £29 million per annum.” This is higher than the £20 million mentioned by Lavery, the new chief executive, last month.
I have caveats.
The transition costs include an estimate of £21.936 million redundancy costs: this figure may go up or down depending on the individuals who become redundant; each individual has different redundancy entitlements. In consequence the transition costs may change; this is acknowledged by the Benefits realisation plan. There is an estimate of 462 redundancies.
The figures are estimates and projections, planned expenditure and savings; they are not reports of what has happened already.