Agenda item

Council Fund Revenue Budget 2022/23 - Final Closing Stage

Decision:

(a)       That the recommendations of Cabinet, as detailed above, for balancing the budget for 2022/23 be approved; and

 

(b)       That the level of Council Tax for 2022/23 as recommended by Cabinet be approved.

Minutes:

The Chief Executive introduced a report to receive the recommendations from Cabinet for the Council to set a legal and balanced Council Fund Revenue Budget for 2022/23.

 

The Chief Executive, Corporate Finance Manager, Strategic Finance Manager and Revenues Manager gave a presentation covering the following:

 

·         Setting a legal and balanced budget

·         The Journey so far…

·         Changes to the Additional Budget Requirement 2022/23

·         Budget Solutions 2022/23

·         Council Tax 2022/23

·         Schools and Social Care Budgets

·         Open risks

·         Reserves

·         Professional opinions and concluding remarks

·         Looking ahead and the Medium Term Financial Strategy (MTFS)

 

The Council had received full reports on previous stages of the budget setting process for 2022/23 and previous reports and appendices had been provided as background information.  Cabinet had sent a revised minimum budget requirement for 2022/23 of £20.696m at its meeting on 14 December and received an update on the key headlines and financial impacts of the Welsh Local Government Provisional Settlement at its meeting on 18 January 2022. 

 

In previous years, the Council had set a clear direction that any annual increase should be 5% or less.  The Council had had to include a number of additional pressures to provide for the new responsibilities identified in the Welsh Local Government Provisional Settlement which had increased the budget requirement.  Based on the final additional budget requirement of £30.562m an overall annual increase of 3.3% is required on Council tax for Council Services and 0.65% for additional contributions to North Wales Fire and Rescue Service, Regional Coroners Service and Regional Education Consortium GwE.  This equated to an overall uplift of 3.95%.     

 

The recommendations for Council were moved by the Leader of the Council and Cabinet Member for Education, Councillor Ian Roberts, who thanked the Chief Executive and officers for their work throughout the budget setting process.  He also thanked the National Government and Welsh Government (WG) for the settlement provided but said that there was a need to recognise that the Council had been particularly dependent on the COVID Reserve with a number of claims having been made to WG.  He assured Members that the budget proposals had been robustly challenged by all Cabinet Members, with particular emphasis around Earmarked Reserves, and reported that Members continued to make representations on the need to review the funding formula for Local Government through the Welsh Local Government Association (WLGA).  He said he was fully aware of the proposed rise in Council Tax at a time when energy costs and National Insurance contributions were rising, and applauded WG’s ambition to move towards a real living wage, but outlined the challenges that would face the future Council administration if the Council Tax level was to be reduced or the use of reserves was proposed.  He therefore moved the following recommendations: -

 

(a)       That Council approves the revised additional budget requirement for 2022/23;

 

(b)       That Council approves the final proposals for the corporate efficiencies which would contribute to the budget;

 

(c)       That Council sets a legal and balanced budget based on the calculations as set out within the Cabinet report;

 

(d)       That Council notes the open risks which remain to be managed in the 2022/23 financial year;

 

(e)       That Council approve an overall annual increase in Council Tax for 2022/23 of 3.3% for Council Services and 0.65% for contributions to North Wales Fire and Rescue Service, Regional Coroners Service and Regional Education Consortium GwE – an overall uplift of 3.95%;

 

(f)        That Council approves an additional £3.250m be transferred from the Contingency Reserve to the Emergency Reserve to safeguard against the ongoing financial risks of the pandemic in 2022/23;

 

(g)       That Council approves the formal Council Tax resolution following notification of the precepts of the Police and Crime Commissioner and all town and community Councils within Flintshire; and

 

(h)       That Council notes the medium-term forecast as a basis for the next revision of the Medium-Term Financial Strategy (MTFS).

 

As Cabinet Member for Finance & Social Value, Councillor Paul Johnson seconded the proposal and supported the comments made by the Leader of the Council.  He commented on the 3 year settlement from WG and the funding available in subsequent years and the significant uplift required for future budgets.  He spoke of the budget planning process which had been significantly difficult given the cost of living crisis, COVID financial support coming to an end, the increase in National Insurance contributions, fuel and energy costs rising and the predicted rise in inflation.  He reported that the amount of reserves had been scrutinised carefully and explained that Audit Wales had recommended that the current levels were prudent in managing reserves going forward.

 

Councillor Tudor Jones thanked officers for the presentation and report provided.  He commented on the cessation of the WG Hardship Fund and welcomed the Council proposal to continue to provide financial support to Services provided under Community Asset Transfers which he said were vital for the County.  

 

Councillor Tony Sharps spoke in support of the proposal and thanked officers for their work, particularly the work carried out during the pandemic.  He spoke against the banding of Council Tax which he felt was an unfair system and should be reviewed by Local Authorities to ensure a different system of collecting taxes in a fair and equitable way from local people was implemented.  He also commented on the level of reserves and said that the Administration in place following the Local Government Elections in May would need to consider carefully the level of reserves given that Audit Wales had reported that the Council had one of the lowest reserve levels in Wales. 

 

            Councillor Richard Jones moved an amendment to the final closing stages of the revenue budget and thanked the officers for the presentation together with the Chair and previous speakers.  He said that this year’s budget requirement was £326.678m, which was made up of Aggregate External Finance (AEF) and the balancing value of Council Tax which meant that £94.5m or 29% of the total budget would be collected from Flintshire tax payers.  In comparison, in 2014/15 Council Tax was £60m at 24% of total budget and in 2017/18 levels Council tax was £70m at 26% of total budget.  This was an increase of £25m over the 5 year administration period and he felt that this level could not continue and that WG must start to provide their fair share and stop putting financial pressure on local residents.  He advised that his amendment would result in a Council Tax increase proposal of £1.95% as follows: - 

 

(a)       That £910,000 be transferred from the Earmarked Reserves to the revenue account in the following way –

  • Propose the transfer of £757,000 from the General Reserve – Investment in Organisational Change budget and £153,000 from the Single Status / Workforce budget.  This would provide 1% towards Council Tax therefore reducing the amount to 2.95%.  Any Organisational Change proposals made during 2023/24 would need to be considered during the year to assess affordability;

 

(b)       Additionally, that £910,000 be transferred from Contingency Reserves to the revenue account in the following way –

  • Propose that this transfer to the Emergency Fund be lowered to £2.34m, providing much needed funds to the revenue account.

 

The two proposals taken together would transfer £1.82m into the revenue account, lowering the Council Tax increase to 1.95%.  Councillor Richard Jones felt that this would have very little effect on the running of the Council and would have a minimum effect on risk to finances and that lowering the burden on Flintshire tax payer’s outweighed perceived increases in risks.

 

Councillor Mike Peers seconded the amendment outlined by Councillor Jones.  He commented on previous high Council tax increases following low settlements from WG and said that it was clear the shortfall in funding from WG was being made by up by the tax payers of Flintshire.  He said that the cost of living was being faced by all Council tax payers irrespective of proposals being put forward by WG to try and ease the cost of living and said that the proposal put forward by Councillor Jones would benefit all tax payers in Flintshire.

 

The Chief Executive and Corporate Finance Manager responded to the amendment outlined by Councillor Jones.  The Chief Executive advised that there needed to be financial resilience in the Council, and this would not be possible by reducing the Council tax to levels suggested in the amendment.  The Corporate Finance Manager said that the fundamental principle was that it was not sustainable to use reserves to meet the costs of recurring spends.  Reserves could only be used for one year and therefore would create a funding gap the following year.  For a number of years there was a cycle of using reserves to bridge the budget gap and reserves were having to be replaced the following year to ensure sustainable budgets.  Members also needed to consider that the settlement proposed for 2023/24 left a budget gap which was likely to rise and would increase the financial risk significantly to the Council.  On the proposal to reduce the £4.7m hardship fund, detailed consideration had been given and a risk assessment carried out on all current claims to ensure the levels were prudent.  The Corporate Finance Manager advised that he would not be supportive of the amendment.

 

Councillor Chris Dolphin spoke against the amendment.  Whilst he agreed that improved settlements were required from WG, and paid tribute to the late Councillor Kevin Hughes on leading the lobbying of WG for better settlements, he felt that reserves should be safeguarded and thanked officers for their professional and sound advice.

 

Councillor Dave Healey spoke against the amendment, highlighting climate change and the need for reserves to be used to deal with any adverse weather.  Councillor Carolyn Thomas also spoke against the amendment and supported the comments made by Councillor Healey.  She said that in her role as a Member of the Senedd, she had asked for the funding formula to be reviewed and for additional funding to be provided for highway maintenance.  She reported that a £150 cost of living support would be provided to all households within Council tax band a-d and those households who are part of the Council tax reduction scheme.  WG were currently working with Local Authorities on how the scheme would operate with payments being made available as soon as possible.

 

The Leader of the Council said that the hole in the argument put forward for the amendment by Councillor Jones was that the use of reserves was one off money and therefore could not be used again next year.  Following the Local Government elections in May, the next Council administration would immediately face a £2m funding gap and he felt this was irresponsible.  He re-iterated the comments made by the Corporate Finance Manager and hoped the Council would not vote to support the amendment.

 

Councillor Carol Ellis spoke in support of the amendment.  She raised concerns that many Members had not been involved in the budget setting process and not been consulted on proposals.  She referred to the funding settlement from WG and commented on the low settlement provided.  She welcomed the cost of living support provided by WG but said that many people living in poverty were not in receipt of benefits and relied on foodbanks.  She did not feel that it was fair for residents in Flintshire to make up the funding gap from WG year on year.  Councillor Helen Brown also spoke in support of the amendment and the comments made by Councillor Ellis.  She commented on the work she had undertaken as a volunteer over the past 2 years and the overwhelming support needed for people all across Flintshire who were struggling with the cost of living.  She sought Members support in accepting the amendment to help reduce the burden on all residents. 

 

Councillor Aaron Shotton thanked all officers and Cabinet Members for their work on the budget and presentation.  He spoke against the amendment and said that there was a clear message within the report, particularly around pay awards which was a considerable risk, particularly as the current proposed public sector pay was considerably below inflation and could be expected to rise in final negotiations.  He referred to the comments made by the Corporate Finance Manager around ending the cycle of utilising reserves and said that reserves had previously been used during times of austerity to protect services which had been removed in neighbouring authorities and had not been re-instated.  He felt that the amendment would increase the Council’s cost and would put Council services at risk.

 

Councillor Richard Jones in summing up, said that he had been accused of utilising reserves but he explained that the amendment would see the contingency reserves remain the same level with funds being taken out of earmarked reserves.  He said that his amendments utilised small amounts of funding and that it was not irresponsible to reduce the Council tax burden.  He outlined the decisions made by WG which had funding implications on the Council, such as the increase in Teacher’s pay and the implementation of the real living wage, where additional funding from WG should have been provided.  He said that this year would see residents facing one of the most difficult financial years and therefore the Council should be setting a Council tax at the most affordable level possible.   

 

A recorded vote was requested, and the requisite number of Members outlined their support for this.  On being put to the vote the amendment was lost.

 

For the amendment: -

Councillors:Bernie Attridge, Haydn Bateman, Sian Braun, Helen Brown, Clive Carver, Bob Connah, Rob Davies, Adele Davies-Cooke, Rosetta Dolphin, Carol Ellis, Veronica Gay, George Hardcastle, Richard Jones, Brian Lloyd, Dave Mackie, Mike Peers, Ralph Small, Owen Thomas and Arnold Woolley.           

 

Against the amendment: -

Councillors:Janet Axworthy, Glyn Banks, Sean Bibby, Chris Bithell, Derek Butler, Geoff Collett, Paul Cunningham, Ron Davies, Chris Dolphin, Ian Dunbar, Andy Dunbobbin, Mared Eastwood, David Evans, David Healey, Gladys Healey, Cindy Hinds, Andy Hughes, Dave Hughes, Ray Hughes, Alistair Ibbertson, Joe Johnson, Paul Johnson, Christine Jones, Tudor Jones, Richard Lloyd, Mike Lowe, Hilary McGuill, Ted Palmer, Michelle Perfect, Vicky Perfect, Neville Philips, Ian Roberts, Kevin Rush, Tony Sharps, Aaron Shotton, Paul Shotton, Ian Smith, Carolyn Thomas, Martin White and David Wisinger.    

 

Abstentions: -

Councillors: Marion Bateman, Colin Legg and Tim Roberts.

 

            The amendment was lost and therefore the proposal as moved and seconded by the Leader of the Council, Councillor Ian Roberts and the Cabinet Member for Finance & Social Value, Councillor Paul Johnson became the substantive motion. 

 

            The Chief Officer (Governance) advised Members that they may wish to keep their vote, and therefore if a Member voted for the amendment that they would be voting against the original proposal.  

 

            Councillor Haydn Bateman indicated that he wanted to amend his vote and therefore would now be voting for the proposal. 

 

Having been moved and seconded, the following recommendations were put to the vote and carried.

 

(1)       That Council notes and approves the revised budget requirement for 2021/22;

 

(2)       That Council approves the final proposals for the corporate efficiencies which will contribute to the budget;

 

(3)       That Council approves a legal and balanced budget based on the calculations as set out in the report;

 

(4)       That Council notes the open risks which remain to be managed in the course of 2021/22;

 

(5)       That Council approves an annual increase in Council Tax for 2021/22 of 3.95%; and

 

(6)       That Council notes the medium-term forecast as a basis for the next revision of the Medium-Term Financial Strategy (MTFS).

 

RESOLVED:

 

(a)       That the recommendations of Cabinet, as detailed above, for balancing the budget for 2022/23 be approved; and

 

(b)       That the level of Council Tax for 2022/23 as recommended by Cabinet be approved.

Supporting documents: