Agenda item

Medium Term Financial Strategy

Decision:

(a) That the resolutions on the Medium Term Financial Strategy that were passed by Council on 24^th September 2015 be noted;

(b) That the recommendations to review and comment on the strategy, and the implementation of the above resolutions of Council and to advise on alternatives to the contents of the strategy as a contingent should it not succeed be noted at this stage; and

(c) That the Committee wishes to be advised at the earliest possible moment of any apparent need to implement all or any of the list on page 22 of the Medium Term Financial Strategy Part 2 document and others in order to discuss the implications and acceptability thereof.

Minutes:

Councillor Richard Jones queried why the Medium Term Financial Strategy (MTFS) was on the agenda as it had been considered in detail at the County Council meeting held on 24^th September 2015. The Member Engagement Manager reminded Members that it had been agreed at the July 2015 meeting of the Committee that updates on the MTFS would be provided at each meeting.

The Leader of the Council and Cabinet Member for Finance, Councillor Aaron Shotton, introduced a report to provide the Committee with an update on the MTFS following the County Council meeting on 24^th September 2015. He commented on the three elements to the resolution made at that meeting which included the consultation and development of the strategy and he reminded Members of their shared duty to provide a balanced budget. Work was progressing with the Communications Team on how the consultation would take place and it was anticipated that this would include a web based element as well as the need for area based consultation with community groups, including Town & Community Councils. He spoke of the need to ensure that the public understood Part 1 of the MTFS along with the three sections of Part 2 and that discussions were undertaken with communities about the protection and sustainability of services.

Councillor Shotton indicated that he had taken every opportunity to raise the issue of the discussions that needed to take place with the Welsh Government (WG). He added that it was critical to build collective support across the local authorities in Wales and he spoke of the Welsh Local Government Association (WLGA) manifesto for issues for lobbying Assembly Members in the run up to the elections in May 2016. The WLGA manifesto included ambitions and the vision of local authorities and the need for flexibility and Councillor Shotton suggested that it could be included on the agenda for the next County Council meeting, so that it could be shared with all Members. He indicated that he had also raised the issue with the Leaders of the other North Wales authorities. He expressed his disappointment about some of the comments that had been made at the County Council meeting on 24^th September 2015 but added that it was important to progress the resolution to lobby WG. He advised that a meeting of Group Leaders would need to be held prior to contact being made with WG on the request for support.

The Autumn statement from the Chancellor was due to be made on 24^th November 2015 and it was therefore anticipated that the draft local government settlement would be shared with Councils on 9^th December 2015 after consideration by WG, which was a concern because of the lateness of the information. It had been indicated that the final settlement would be available on 1^st March 2016 and therefore there would be a need to review the budget setting timetable if this was the correct date for the settlement figure as this could also have an impact on the deadline for finalising Council Tax figures for 2016/17.

Councillor Carolyn Thomas welcomed the verbal update but queried when the detail of the strategy was to be scrutinised. She also sought clarification on the devolution of business rates in England and whether this was also to be undertaken in Wales. In response, Councillor Shotton said that he, and the Chief Executive, had met with the Chief Executive and Chairman of Cheshire West & Chester Council and it appeared that Councils in England could only retain 100% of the business rates for new businesses. He spoke of devolution of funding to Wales for services such as health and the discussions being undertaken about retention of business rates and he welcomed the progress being made.

Councillor Shotton spoke of the important role of Overview & Scrutiny in the budget process and the progression of the MTFS and added that the detail of the operational and service options would be discussed with Members at the budget setting sessions; the dates for these had not yet been finalised. The Chief Officer (Organisational Change) referred to the work that needed to be undertaken before detailed dialogue could be undertaken with Members.

Following a comment from the Chairman, Councillor Shotton said that there were winners and losers in terms of the funding formula for Councils in Wales but added that there had been a suggestion that this would be reviewed following the proposed re-organisation. He spoke of the comments of the Wales Audit Office on the 7% cuts faced by Flintshire County Council as a result of the formula when compared to the 3% average reduction. Councillor Shotton also spoke of the importance of the Council making its case for support from WG.

Councillor Jones sought clarification on who decided the ‘acceptability’ of budget cuts and also, in referring to the 16/17 service reviews and in particular the privatisation of the Streetscene service, queried where the £1m saving would be found from if the service was not privatised. He suggested that the service reform had already been agreed by Council in its determination of the MTFS on 24^th September 2015. Councillor Shotton reminded Members that the meeting had not set the budgets for 2016/17 but had agreed to undertake further consultation on possible proposals. The ‘acceptability’ of the proposals would be considered by Members at the budget setting meetings which would include further discussion or challenge of the business plans and options submitted by individual departments. He added that even with the proposals put already put forward for consideration, the Council would still have a budget gap and that was why the support of all Councillors had been sought at the Council meeting to undertake early engagement with WG on the dreadful situation facing the Council.

Councillor Arnold Woolley raised concern about possible alternatives on the contents of the strategy if it did not succeed and commented on options that could be considered by Members to establish whether they were acceptable or not. Councillor Shotton referred to the list in Part 2 of the MTFS which were services that could be at risk if the assistance to be requested from WG was not forthcoming. On the issue of alternatives, he felt that this Committee had a significant role to play.

In response to a query from Councillor Carolyn Thomas, the Corporate Finance Manager confirmed that prudential borrowing had only been used for the provision of new school buildings and not for existing buildings.

Councillor Marion Bateman referred to the total amount of inflation which was forecast to be £12.5m and queried whether this forecast remained the same. She also asked what rate of inflation had been used. The Corporate Finance Manager explained that a review had been undertaken and the amount identified for inflation had been reduced by £1m. He added that it was necessary to use different rates of inflation for different areas.

Councillor Carolyn Thomas suggested that the Committee should scrutinise the options listed in the MTFS documents before the commencement of the budget setting process and spoke of the importance of ensuring that the public were aware of the difficulties facing the Council. Councillor Shotton commented on the Member workshop sessions that had been held for the 2015/16 budget process and that similar workshops could also be organised for this year. He also suggested that there was a need for the Overview & Scrutiny Chairs to meet to discuss the budget setting process. The Chief Officer (Organisational Change) spoke of the critical areas of work that needed to be undertaken on alternatives, the appetite for local communities to take over delivery of some services to ensure they were sustainable and on the discussions needed with WG. He felt that it was important that information on these areas was available before discussions with Members were undertaken.

In referring to the earlier comment from Councillor Jones that the privatisation of Streetscene in 2017/18 had already been agreed, Councillor Shotton confirmed that this was not the case and he spoke of the importance of Members being provided with sufficient detail on each of the proposals put forward for them to decide if they could be progressed. The Chairman queried which Overview & Scrutiny Committee would consider any proposals for changes to services. In response, the Chief Officer (Organisational Change) explained that the overall project of alternative delivery models would be considered by the Organisational Change Overview & Scrutiny Committee but this would be in parallel to consideration by the relevant Overview & Scrutiny Committee. Councillor Jones felt that it was important to separate the service areas listed in the Part 2 of the MTFS document from the service reviews and suggested that it was premature to discuss alternatives to the MTFS list at this stage. Councillor David Roney spoke of the importance of provide Members with details on the proposals put forward by departments as soon as possible to allow discussions to take place in workshops at the earliest opportunity.

Councillor Arnold Woolley agreed with the comments made and suggested that a fourth recommendation be included, as follows:-

‘To be advised at the earliest possible moment of any apparent need to implement all or any of the list on page 22 of the Medium Term Financial Strategy Part 2 document and others in order to discuss the implications and acceptability thereof’.

On being put to the vote, the additional recommendation was agreed.

RESOLVED:

(a) That the resolutions on the Medium Term Financial Strategy that were passed by Council on 24^th September 2015 be noted;

Supporting documents: