Agenda item

Financial Forecast and Stage Two of the Budget 2018/19

Decision:

(a) That the Stage Two Budget options within the Scrutiny report and the recommendations of Cabinet detailed below be received;

(i) That feedback from Corporate Resources Overview and Scrutiny Committee be received with a recommendation to Council on Stage 2 of the budget strategy;

(ii) That the remaining stages of the budget process and the timescales be noted; and

(iii) Cabinet received and accepted in full the 6 draft recommendations from Corporate Resources Overview and Scrutiny Committee (listed below). Cabinet noted and recommended Stage 2 of the budget to County Council with the proviso that the specific proposals on schools budgets and car parking charges would be reported to the respective Overview and Scrutiny Committees in January for full review, for them to report back before any final agreement on those two areas.

Corporate Resources Overview and Scrutiny Recommendations:

1. That having considered the Stage 2 budget options, the report and proposals be noted;

2. That the remaining stages of the budget process and timescales be noted;

3. That the letter to the Cabinet Secretaries for Finance and for Local Government and Public services and the Resilience Statements be circulated to all Members;

4. That the full detail of the assessments of the risks, impacts and consequences of all of the budget proposals be made available for review in January;

5. That the Environment and Education and Youth Overview and Scrutiny Committees be convened in January to review in detail the car parking charges and school budget proposals respectively, including the risks and consequences of the proposals, prior to any final decision being taken; and

6. That a report reviewing the process for the setting of the annual budget process be prepared for the Constitution & Democratic Services Committee at its meeting on 31^st January 2018.

(2) That the remaining stages of the budget process and the timescales be noted; and

(b) That the remaining stages of the budget process and the timescales be noted.

Minutes:

The Chief Executive introduced the report on the Financial Forecast and Stage Two of the Budget 2018/19 which had been submitted to a special meeting of Corporate Resource Overview and Scrutiny Committee on 6^th December and a special meeting of Cabinet that morning. A copy of the draft recommendations from the special Corporate Resources Overview and Scrutiny Committee, which had been endorsed by Cabinet that morning, had been given to Members.

Councillor Heesom queried why Members were being asked to approve minutes of the Corporate Resources Overview and Scrutiny Committee in this meeting. The Chief Executive explained that Members were not being asked to approve minutes and at the scrutiny meeting the previous week, Members who were present were advised that the outcome of that meeting would be reported to Cabinet and then to County Council. The recommendations and minute content were draft. Councillor Carver indicated that as Chair of that Committee, they were indeed a fair record of what was agreed. Following a further comment from Councillor Heesom, the Chief Executive confirmed that he was faithfully reporting what Cabinet had decided that morning, taking into account the resolutions of Corporate Resources Overview and Scrutiny Committee.

Cabinet received and accepted in full the six draft recommendations from Corporate Resources, which were:

1. That having considered the Stage 2 budget options, the report and proposals be noted;

2. That the remaining stages of the budget process and timescales be noted;

3. That the letter to the Cabinet Secretaries for Finance and for Local Government and Public services and the Resilience Statements be circulated to all Members;

4. That the full detail of the assessments of the risks, impacts and consequences of all of the budget proposals be made available for review in January;

6. That a report reviewing the process for the setting of the annual budget process be prepared for the Constitution & Democratic Services Committee at its meeting on 31^st January 2018.

Cabinet had noted and recommended Stage Two of the budget to County Council with the proviso that the specific proposals on schools budgets and car parking charges would be reported to the respective Overview and Scrutiny Committees in January for full review, for them to report back before any final agreement on those two areas. Cabinet also noted the remaining stages of the budget process and the timescales.

The Corporate Finance Manager explained that following approval of Stage One of the budget proposals the gap had reduced to £10.5m which excluded the impact of any in-year risks and pressures which could continue into the new financial year. Stage Two budget proposals were categorised into high or low level of control/certainty and full details were contained in the Corporate Resources Overview and Scrutiny report which was appended to the Council report and varied from £7.592m to £9.001m. The projected in-year overspend of £1.3m was under critical examination and any carry forward of any recurring overspend in the base budget would increase the budget gap for 2018/19.

The Chief Executive added that three national requests had been made to Welsh Government (WG) on the Domiciliary Care Fee Cap (£0.490m), the Intermediate Care Fund (£0.500m) and the Apprentice Tax Levy (£0.350m) with the first two at no cost to WG. There was no request to change the formula but those specific requests had been made to help Flintshire with the budget gap. He clarified that those requests would also not be at any cost to other local authorities. A meeting with the Leader, the two Cabinet Ministers and himself was planned to take place before Christmas.

Councillor Shotton reconfirmed the recommendations from Cabinet that morning which was as explained by the Chief Executive. He explained that the new process for setting the budget was now done in three stages, emphasising the importance of planning. He also stressed the importance of the impending discussions with WG to help to achieve a balanced budget, particularly on the three requests. The Cabinet was not prepared to “passport” any further UK Government cuts onto Council services and he was seeking support from WG to fight back against austerity. He sought Members’ support, particularly for the discussions that would take place with WG.

Councillor Peers asked for information on the in-year spend that was under critical examination and the further negative changes to specific grants which was agreed would be sent. On the £13.6m budget gap, he said a negative gap would occur when spending exceeded income. On Stage Two proposals, particularly on no level of control or certainty, this was at some risk and it was out of the Council’s control. He asked if there were contingency plans for the end of Stages Two and Three, citing uncertainties in Stage One which could still change. He added that he had asked a number of questions on Stage One and he had not yet received responses. He queried if all Members would be invited to the Overview and Scrutiny Committees when the schools budgets and car parking charges were to be discussed so that questions that would have been asked at this Council meeting could be asked at those Committees.

The Chief Executive said that work was being undertaken on Councillor Peers’ questions on Stage One of the budget for the New Year. On the crucial examination of the in-year pressures, the question was the predictability of what would happen next year, one area being the increase in spend on Out of County Placements. In January the likely impact of such pressures could be detailed. On specific grants, the Education Improvement Grant and the Single Environment Grant were significant and always late. There was a combination of three ways in which the budget could only be balanced: (1) supplementary support from WG; (2) use of reserves and balances as a temporary measure; and/or (3) service and budget reductions which would result in services being impacted, such as Social Care, Streetscene and Education, all of which had been discussed at Overview and Scrutiny Committee meetings. The Chief Officer (Governance) explained that Chairs of Overview and Scrutiny Committee meetings always welcomed other Members to their meetings.

Councillor Heesom queried the recommendations from the Corporate Resources Overview and Scrutiny Committee that had been handed to Members. He commented on the magnitude of the budget gap faced by the Council and felt there was an air of desperation on the position being faced. Unless WG was prepared to assist then the position was dire. He said the Administration had made the situation and it was for them get the Council out of the position. Comments had been made at the Corporate Resources Overview and Scrutiny Committee the previous week on Stage One and Members were advised by the Leader of the Council that the budget had been looked at line by line, but he said other Members in Overview and Scrutiny Committees had not had that opportunity. Even if all Stage Two options were put in place that would only raise £9m with a gap still remaining. He asked the Chief Executive, on the three options he referred to, what other options were remaining as if there was a surcharge in addition to a possible 5% rise in Council Tax, Members needed to inform their residents as soon as possible.

The Chief Executive said the financial situation was extremely serious. The responsibility of setting the budget was for Members, based on professional advice provided by Officers which could then be scrutinised. He advised that it was not appropriate to personalise comments to him on options such as Council Tax levels. He said it may not be necessary to raise the Council Tax up by 5% and added that a Council Tax rise was not mentioned by any Members at the Corporate Resources Overview and Scrutiny Committee the previous week as an area of major concern. Councillors Richard Jones and David Healey had both indicated that the recommendations were correct and he reiterated that they had been accepted by Cabinet that morning. The Chief Officer (Governance) also said the recommendations reflected what had been discussed at that meeting and they would form part of the draft minutes for that Committee to consider. As Chair of Corporate Resources Overview and Scrutiny Committee, Councillor Carver also said they were a true reflection of what was agreed. He also said that he welcomed other Members to his meetings. The Democratic Services Manager confirmed the dates as, Environment Overview and Scrutiny Committee, 16^th January at 10.00 a.m. and Education and Youth Overview and Scrutiny Committee, 18^th January at 2.00 p.m.

Councillor Richard Jones thanked the Chief Executive for capturing the main points from the Corporate Resources Overview and Scrutiny Committee. He raised concern on the possibility that some of the options may not be felt to be acceptable, citing car parking charges which could result in a town no longer being viable, but he did not understand the consequences sufficiently to be able to make such decisions. He felt there was an immunity for Deeside due to the Deeside Plan. He believed that the £500k for the Intermediate Care Fund should be included in the figures.

The Chief Executive explained that the three proposals which would have consequences for the public were Council Tax, schools and car parking and two of those had been taken out of the main report for separate discussions at the Overview and Scrutiny Committees as previously discussed. All of the remaining options were a corporate risk and did not impact people directly; equalities impacts assessments looked at the risks to people and communities. Details of the assessments, impacts and consequences would be available in January. In response to the point on Intermediate Care Fund, he explained that this was not guaranteed at this early stage.

Councillor David Healey also said the draft recommendations faithfully reflected what had been said at Corporate Resources Overview and Scrutiny Committee and he also welcomed all Members to the Education and Youth Overview and Scrutiny Committee meeting in January. He expressed his concern on schools budgets and commented that some schools in England had reduced to a four day week to meet budget pressures. He expressed his appreciation that such a situation had not occurred in Flintshire.

The Chief Executive explained the importance of schools knowing the situation as soon as possible to enable them to plan. As Cabinet Member for Education, Councillor Roberts said he had attended a number of consultation meetings and general feedback from schools was they were grateful for what the Council had done thus far and they expected the situation as set out. However, he concurred with the Chief Executive on the importance of them being provided with information as soon as possible.

On being put to the vote, the recommendations were carried.

RESOLVED: