Agenda item

That the presentation be noted and comments referred to Cabinet.

The Chief Executive introduced an update on the Medium Term Financial Strategy (MTFS) forecast for 2020/21-2022/23 prior to consideration by Cabinet.  A joint presentation with the Corporate Finance Manager covered the following:

·         The financial forecast as at February 2019

·         Review of pressures

o   Pay/workforce

o   Social care demands

o   Education pressures

o   Corporate financing pressures

o   Other pressures - updated and new

o   Risks

·         Next steps

·         Timeline

Since the report to County Council in February, the impact of reviewed existing pressures, new and emerging pressures and the additional use of reserves agreed at the budget stage had increased the forecasted budget gap for 2020/21 to £13.320m.  There were a number of pressures including assumptions on teachers’ pay, and the investment in Marleyfield Residential home and Holywell extra care which would help to meet service demand and offset further pressures.  The estimated initial impact of the Additional Learning Needs and Education Tribunal (Wales) Act 2018 was a new pressure with significant cost implications for all councils.

The Chief Executive advised that a large majority of the budget gap could only be funded by reform of national policy.  The views of the Committee and Cabinet would help the cross-party group to work with the Welsh Local Government Association (WLGA) in engaging with Welsh Government (WG).  The evidence-based case for increased national funding consisted of three main building blocks:

1.    Inflation protection against core costs e.g. pay and pensions;

2.    Severe service pressures, e.g. Out of County Placements and Looked After Children; and

3.    Full funding of new legislation e.g. Additional Learning Needs (ALN).

Councillor Roberts highlighted the importance of the cross-party group working together to formulate a response to the Minister for Local Government including the need to provide funding for national pay awards.

Following a question by Councillor McGuill, the Corporate Finance Manager explained that unused allocations had been put back into reserves to maintain prudent levels but that some risks had exceeded the amount of funding available.  He reminded Members that reserves were only for use on a one-off basis.

Councillor Axworthy spoke in support of a review of national funding policy.  She suggested that the 2016 Commission on local government finance in Wales - to which Flintshire had been a primary contributor - be re-visited and tailored for relevance at this stage to support the case to WG.  The Chief Executive said that there had been a lack of progress on the report’s recommendations and confirmed that representations on the funding formula were within the terms of reference for the cross-party working group.  He agreed that the report would be circulated to all Members as it was included in the reading list for the working group.

Councillor Heesom said that a mechanism was needed to ensure that respective Overview & Scrutiny Committees were satisfied with portfolio spend.  In welcoming Member involvement on the budget, Councillor Roberts said that the majority of expenditure was outside the Council’s control as it was directly allocated to support schools, social care, etc.  He said that the Council Tax increase for 2019/20 had been a difficult decision for Members, despite the expectation from WG for a 6.5% increase across Wales, and he hoped that the Council would not be put in a similar position again.  The way forward was to work together through the cross-party group and with other councils to make the funding case in advance of the budget-setting stage.

The Chief Executive said that notwithstanding the support of the cross-party group, there were no plans to revise the budget process which had received positive feedback from Members over several years.  He reiterated the advice given throughout the process in 2018/19 that there were no further safe options remaining for service cost reductions of scale.  There was a clear alignment of officers to Committees which determined their own workload.

In response to further comments, the Chief Executive said that whilst there had been some success on specific grants, the case remained for some to be included with the Settlement.  He provided explanation on the transport anomalies referred to in the presentation.

Councillor Woolley recalled working with the WLGA in previous years to request that WG consider what proportion of funding should be held centrally and what was best allocated regionally and locally, and that this was still continuing.  He said that the concerns raised by the Authority had been represented to WG by the WLGA since 2008 but had still not been addressed, and that national progress in resolution was unsatisfactory.

In acknowledging the value of the National Health Service, Councillor Roberts spoke about the link with social care services which should also be given priority for national funding.

Councillor Johnson welcomed the detailed overview of the forecast for 2020/21 and the high level forecast up to 2022/23, asking if more detail on the three year forecast could be shared with Overview & Scrutiny Committees to enable Members to see the direction of travel.  Officers agreed and provided a brief overview of the approach to developing the forecast which evolved as pressures changed throughout the year.

The Corporate Finance Manager provided clarification to Councillor Bateman on projected parking and enforcement pressures based on existing usage.

Councillor McGuill urged officers to continue extending an invitation to Assembly Members to meet with the Council so that they could gain a greater understanding of the impact of WG decisions on local government budgets.  Her comments were endorsed by Councillor Hughes.

The Democratic Services Manager gave assurance that ongoing attempts would continue.  Members were asked to do their best to encourage AMs to take up the offer.

Following his earlier comments, Councillor Heesom questioned the Council’s approach to controlling spend at an earlier stage in the budget process.  In response, he was reminded that all six Overview & Scrutiny Committees had formally concluded, in agreement with officer advice, that no further safe options had been identified.  The potential 15.2% increase in Council Tax which had been reported at an earlier stage had been reduced markedly as a result of an improved Final Settlement.

The recommendations were moved by Councillor Woolley and seconded by Councillor Hughes.

A summary of the points raised would be reported to Cabinet.

RESOLVED:

That the presentation be noted and comments referred to Cabinet.