Agenda item

(a)       That following a review, £1.927m of reserves and balances is released to contribute to balancing the budget;

(b)       That a 5% rise in Council Tax is set to balance the budget in combination with reserves and balances in (a) above;

(c)        That a further rise in Council Tax of 1.71% is set to provide additionality of £1.140m specifically for schools budgets;

(d)       That a report be made to the next meeting with an update on any additional one-off funding to be received from Welsh Government late in this financial year, with advice on how an improved out-turn position in 2018/19 could be used to further increase the funding for schools in 2019/20; and

(e)       To note that the £18K pressure for providing discretionary top-up relief, as agreed by Cabinet, be built into the budget for 2018/19.

The Chief Executive introduced the report to provide the recommendations of Cabinet for the Council Fund Revenue Budget 2018/19 - Third and Closing Stage, copies of which had been circulated.

The Chief Executive and Corporate Finance Manager gave a joint presentation covering the following areas.  The Chief Officer (Governance) also contributed:

·         Review of budget process for future years: Constitution Committee

·         Setting a legal and balanced budget

·         National positions on Local Government

·         Local Government national position

·         Through innovation - £79m efficiencies over 10 years

·         Big things we have achieved

·         Council resilience

·         Local position

·         Budget Stage One - portfolio business plans

·         Budget Stage Two - secondary/corporate proposals

·         Budget Stage Three - closing and balancing the budget

·         Professional opinions

·         Future outlook

·         Next steps

The valuable input by all Members throughout the budget process would continue as part of consultation on a review of the future budget process.  The phased budget process had enabled early planning and implementation of proposals.  Taking a higher level of risk was acknowledged as a characteristic of budget setting in times of severe financial restraint.  As an unresolved issue, options for increased public car parking charges still to be considered by Cabinet would need to meet a £0.450m additional income target if the budget as presented were to be approved.  On the cases made by the Council at national level, there were ongoing discussions with Welsh Government (WG) on the requests for local flexibility on domiciliary care charges and the retention of a share of Apprentice Tax Levy.

The review of reserves had been rigorous due to the financial situation and the interest of the Corporate Resources Overview & Scrutiny Committee.  The outcome of the review, which had been circulated, provided details of each reserve and identified nearly £2m of reserves which could be released to assist in balancing the 2018/19 budget.  A reminder was given that reserves could only be used once and that, if they were to be drawn upon for the 2018/19 budget, then there would be a cost pressure on an equal amount to be met from 2019/20.

In moving the recommendations, Councillor Aaron Shotton thanked the Chief Executive, the Corporate Finance Manager and all those involved in working on the budget in the context of reduced government grant and increased demand and other costs for services.  Whilst the budget gap could be met wholly by a Council Tax increase of over 8%, the recommendation from Cabinet was to use £1.927m of reserves and balances with a 5% increase in Council Tax to firstly balance the budget.   In recognition of the concerns raised amongst the schools community, the public and Members, Cabinet recommended a further increase in Council Tax of 1.71% (taking the rise in total to 6.71%) to provide an additional £1.140m for schools’ delegated budgets.  Councillor Shotton commended the additional investment to meet pressures in social care, and the involvement and support of the Overview & Scrutiny committees throughout the process.  Widespread recognition that service options had been exhausted had led to challenge on the retention of unused earmarked reserves.  A recent report by the Wales Audit Office had acknowledged that Flintshire was a financially well-governed Council.  The escalating public debate was helping to raise awareness of the impact of continued austerity and the scale of future challenges.

Councillor Shotton’s proposal was seconded by Councillor Attridge who requested a recorded vote to which the requisite number of Members stood in support.

Councillor Sharps spoke about the responsibility of elected Members in setting a balanced budget in keeping with the professional advice given by officers.  He raised concerns about the difficult decisions required in future years.

As Chairman of the Education & Youth Overview & Scrutiny Committee, Councillor David Healey spoke in support of the additional support for school funding and of the work done to achieve efficiencies and protect front-line services.

In commending the efforts of all involved, Councillor Richard Jones referred to the disparity of funding given to the National Health Service in comparison with local authorities where more was being done to achieve efficiencies.  He said that unused earmarked reserves should be drawn back into the Council Fund revenue account if unspent within the timeframe set and that the additional support for schools would not have been possible without the release of reserves - a challenge which had been led by the Corporate Resources Overview & Scrutiny Committee.  In recognition of the risk of inflationary pay pressures to schools, he said it was appropriate to use a combination of £0.900m Invest to Save funding held by the Council and £1m of contingency reserves.  He therefore proposed the following amendment, which was seconded by Councillor Peers:

(a)     That following a critical review, £1.927m of reserves and balances is released to be ring-fenced to schools budgets/education;

(b)     That a 6.71% rise in Council Tax is set to balance the budget in combination with reserves and balance; and

(c)     That following the same review, £0.787m of reserves and balances is released to contribute to balancing of the budget.

Following a closure motion moved by Councillor Attridge, the Chairman agreed to a short adjournment to allow officers to consider the implications.

Once the meeting was reconvened, the Corporate Finance Manager, in his capacity as Section 151 officer, gave his opinion that the amendment proposed was of too high a risk.  This was based on the need to maintain a prudent level of contingency reserves to protect the Council against a number of significant in-year pressures such as the potential increase in pay award; annual budget management tolerance level; potential shortfall in efficiencies; Invest to Save on future efficiencies; and unforeseen cost pressures particularly for out of county placements.  These pressures had been part of the presentation made earlier in the meeting.

The Chief Executive reported that WG had indicated that there was potential additional in-year revenue releases to address pressures including social care.  He suggested that if Members were minded to support the Cabinet recommendations, the Council would engage with WG to seek an update for the next meeting on the release of any further funding.  If such additional funding could be drawn down to subsidise service costs which had already been met in the financial year, rather than for additionality in service expenditure, then the Council’s position on reserves and balances would improve and there would be some flexibility to go further with an increase in funding for schools in 2019/20.

On receiving this explanation, Councillors Jones and Peers indicated their willingness to withdraw the amendment on the basis that any additional funding be ring-fenced for schools.  The Chief Executive clarified that any one-off funding made available by WG which improved the Council’s out-turn position for 2018/19, would allow the release of further reserves to supplement the funding formula for schools.

As Cabinet Member for Social Services, Councillor Christine Jones conveyed her pride in the services and teams within her portfolio.  She welcomed the increased investment in key areas of Social Services and highlighted significant financial support in several areas including extra care facilities, Children’s Services and in meeting new legislative duties.

During the debate, a number of Members welcomed the progress made to reach this stage but recognised the challenges of work ahead on the 2019/20 budget.

As part of the budget process for 2019/20, Councillor Peers called for more scrutiny of areas such as vacancy management, mobile phone costs and the costs of borrowing.  Councillor Heesom felt there should also be more focus on expenditure within portfolios.

In welcoming the investment in Social Services, Councillor Ellis said that the Council should intensify its case to WG for more funding.

Following comments from Councillor Bithell, the Corporate Finance Manager clarified that the use of reserves to support this budget was not a recurring solution.  Reserves would need to be maintained at a prudent level in future years.

The Chief Executive confirmed the additional recommendation to report back to the next meeting on additional funding from WG.  As reported in the previous item, the additional £18K to provide the increase in discretionary top-up rate relief would be reflected in an adjustment to reserves.

On being put to the vote, the recommendations from Cabinet - along with the additional recommendations outlined above - were carried unanimously as follows:

For the proposal:

Councillors: Brian Lloyd, Paul Cunningham, Mike Allport, Bernie Attridge, Janet Axworthy, Glyn Banks, Haydn Bateman, Marion Bateman, Sean Bibby, Chris Bithell, Sian Braun, Helen Brown, Derek Butler, Clive Carver, Geoff Collett, Bob Connah, David Cox, Jean Davies, Rob Davies, Chris Dolphin, Rosetta Dolphin, Ian Dunbar, Andy Dunbobbin, Mared Eastwood, Carol Ellis, David Evans, Veronica Gay, David Healey, Gladys Healey, Patrick Heesom, Cindy Hinds, Andrew Holgate, Dave Hughes, Kevin Hughes, Ray Hughes, Dennis Hutchinson, Joe Johnson, Paul Johnson, Rita Johnson, Christine Jones, Richard Jones, Tudor Jones, Richard Lloyd, Mike Lowe, Dave Mackie, Hilary McGuill, Billy Mullin, Ted Palmer, Mike Peers, Michelle Perfect, Vicky Perfect, Neville Phillips, Ian Roberts, Tony Sharps, Aaron Shotton, Paul Shotton, Ralph Small, Ian Smith, Carolyn Thomas, Owen Thomas, Martin White, Andy Williams, David Wisinger and Arnold Woolley

RESOLVED:

(a)       That following a review, £1.927m of reserves and balances is released to contribute to balancing the budget;

(b)       That a 5% rise in Council Tax is set to balance the budget in combination with reserves and balances in (a) above;

(c)        That a further rise in Council Tax of 1.71% is set to provide additionality of £1.140m specifically for schools budgets;

(d)       That a report be made to the next meeting with an update on any additional one-off funding to be received from Welsh Government late in this financial year, with advice on how an improved out-turn position in 2018/19 could be used to further increase the funding for schools in 2019/20; and

(e)       To note that the £18K pressure for providing discretionary top-up relief, as agreed by Cabinet, be built into the budget for 2018/19.