Agenda item

That the report be received.

The Chief Executive introduced the report to enable the Committee to make comments on the Council’s response to the Provisional Settlement for 2016/17 before consideration by Cabinet on 19^th January 2016.  The report would not be considered by County Council due to the short timescale for a response.  Paragraph 1.06 of the report to Cabinet suggested a response and was separated into three areas which were:-

·         The Provisional Settlement for 2016/17

·         Future annual Settlements

·         Immediate National Budget Work for 2016/17

In referring to the Provisional Settlement for 2016/17 the Chief Executive welcomed the lower Revenue Support Grant (RSG) reductions which reduced the budget gap for Flintshire County Council by nearly £4m.  There was a need to press Welsh Government (WG) for a lower reduction in the new Single Environment Grant (SEG) than the proposed reduction.  The cut in the SEG was -6.7% or £0.210m for Flintshire, with the average for Wales being -6.4%, and could result in an impact on key local public services.  Concerns were also being expressed on the risk of any further above average reductions for currently unpublished specific grants and the inability to plan for impacts on services as a result of in-year specific grant reductions as had been experienced in 2015/16.  On the issue of the newly announced joint health and social care additional funding, the Chief Executive explained that progress was being made to ensure it was equally accessible for current and emerging service demands.

Councillor Aaron Shotton spoke of the lobbying work that had been undertaken which included a request for an exemption on the social care charging cap.  He also commented on pressures in the social care budget.  Councillor Shotton spoke of the positive comments that had been received from Mark Drakeford, the Minister for Health and Social Services, about the need to examine the concerns raised and the positive recognition by WG of the issues that were being highlighted.  However, it was unlikely that any changes would be implemented before the Welsh Assembly elections in May 2016.  Councillor Shotton also raised concern about the Council Tax Reduction Scheme, which was not fully funded and was therefore a budget pressure even though it was in effect a national Welfare Scheme in Wales.  He commented on the additional funding for joint health and social care and referred to the Intermediate Care Fund.

Flintshire was ranked 19^th out of the 22 Welsh Councils per capita on Aggregate External Finance (AEF) and it had been reported to Cabinet in December 2015 that if Flintshire received the per capita average, then the Council’s AEF would be £17.455m per annum higher than the amount currently received.  The formula was based principally on deprivation indices, rurality and sparsity, and service need indices. National discussions on the future of the local government funding formula were ongoing.  The Chief Executive explained that if the Council had received funding based on the average AEF, then a balanced budget could be agreed without the need for any new efficiencies this year.  He added that the funding formula was last reviewed fundamentally in the early 2000s.

Councillor Robin Guest thanked Councillor Shotton and the Chief Executive for their introduction.  He raised concern about the reduction in the SEG and referred to the consideration of the report on the Streetscene & Transportation overspend at the Committee meeting in December 2015 where a drop in income from recyclates had been reported.  He agreed with the proposal to seek a lower reduction in the SEG than the £0.210m identified for Flintshire.  On the exemption to the Social Services charging cap, Councillor Guest queried whether this was a request only from Flintshire County Council or to WG from all Councils in Wales and sought clarification on whether other authorities had expressed the same concerns as Flintshire. 

In response, Councillor Shotton suggested that any review in the funding formula may not be considered prior to a possible reorganisation and reduction in the number of Councils in Wales.  However, he felt that it was important to continue to discuss the inequality in the funding formula, which resulted in Flintshire being a low funded Council.  He added that services performed well compared with other Councils that received more funding and a number of efficiencies had been achieved without a significant reduction in services.  Councillor Shotton also referred to the need to highlight the issue of business rates and whether any changes could be introduced that would allow monies from growth of new local businesses to be retained by the local authority.  This would not affect the amount of rates received by WG from existing businesses which was then redistributed to local authorities as part of the local government revenue settlement.  The Chief Executive said that a review of the Social Services charging caps was a national issue on which  Flintshire County Council was pressing for reform. This would remain an issue for 2017/18 budget planning as the current system was unsustainable. 

Councillor Richard Jones said that one of the reasons that he had not supported the lobbying of WG in the third strand of the MTFS was because he did not feel that it would have an impact on the budget setting for 2016/17.  He felt that to include the proposal in the MTFS for 2016/17 was unacceptable but added that it could have been considered separately for future years.  In response the Chief Executive referred to the positive outcome with a lower reduction in RSG than had been anticipated, as a result of lobbying, and a partial achievement in the area of Social Care.  Other areas such as the Council Tax Reduction Scheme had not been inflation protected and therefore the scheme would continue to pose an annual budget pressure.  The Chief Executive commented on other areas of success which included protection for the Supporting People grant and an increase in the Pupil Deprivation grant.  The feedback that had been received was that Flintshire had been articulate in its lobbying arguments and the Chief Executive spoke of the significant cuts to services that would have had to have been considered without the lower than forecast reduction in RSG.

Councillor Shotton disagreed with the comments of Councillor Jones but and referred to numerous meetings that had taken place on lobbying and funding predictions, he spoke of the work that still needed to be carried out which would include continued lobbying of WG.  He spoke of the MTFS for the period 2015 to 2018 and said that any comments from Members for inclusion in the response on the provisional settlement would be welcomed. 

Councillor Arnold Woolley referred to the funding formula which was based on a number of areas including deprivation and he raised concern on the aspects of longevity, flexibility and impact.  He commented on the expectation of Value for Money and said that any lack of return or improvement was unsustainable. 

Councillor Peter Curtis felt that a careful approach should be taken when lobbying WG for more money as it may be perceived that Flintshire had already made significant savings and was one of the most efficient Councils in Wales with funding that was lower than many authorities and therefore did not require any additional funding. 

The Chief Executive spoke of discussions that had taken place, and would continue, on the newly announced joint health and social care additional funding and the risk of performance in the area of education which was still a significant pressure.                                                              

            RESOLVED:

That the report be received.