Agenda item

That the concerns raised by the Committee on the Medium Term Financial Strategy and Budget 2023/24 be reported back to the Cabinet when it considers the report.

The Corporate Finance Manager presented a report to update Members on the additional budget requirement for 2023/24 prior to the Overview & Scrutiny meetings in December and receipt of the Provisional Local Government Settlement from Welsh Government (WG) on 14 December 2022.

At the October meeting, the updated forecast reported a minimum budget requirement of an additional £24.348m of revenue resources for 2023/24.  Further work to identify changes and significant risks had led to a further increase, as reported to the recent Member finance briefings and summarised in the report.  Whilst work was continuing to establish the full impact, it was projected that the additional budget requirement could potentially rise to around £32m.  There were a number of ongoing risks which could impact further and would be kept under continued review, including out of county placements and the teachers’ pay award.  The report also included an update on progress with budget solutions and the timeline leading up to the final budget setting.  An overview of the position across portfolios would be provided at the Committee’s meeting in January.

In conveying the seriousness of the situation, the Chief Executive said it was recognised that the scale of the current position would present significant challenges in setting a balanced budget.

The Chairman said that the recent reports and briefings provided no solutions on how to balance the budget and that values for mitigating options would need to be shared to enable Members to consider and make informed decisions.

The Corporate Finance Manager said that the work undertaken to date reflected the scale of financial challenge.  He advised that details of portfolio efficiency proposals would be shared with respective Overview & Scrutiny committees in December, together with oversight of efficiencies across all portfolios.  Whilst work on corporate financing continued, outcomes would be shared with Members and the receipt of the Provisional Settlement would provide clarity on the scale of the remaining budget gap and options available.

In response to the Chairman, the Chief Executive shared the concerns and said that all local authorities in Wales were in a similar position.  He gave assurance that officers had taken every opportunity to review efficiencies and that work would continue to present a deliverable position.

His comments were endorsed by Cabinet Member Councillor Paul Johnson who said this was an unprecedented situation involving a number of issues outside the control of the Council.  He hoped there would be clarity following a finance meeting with the Welsh Local Government Association (WLGA) and all other local authorities in Wales.

Councillor Bill Crease expressed concerns about the time available to make significant challenging decisions to address the shortfall and the potential impact on residents.

Councillor Bernie Attridge agreed that this was an unprecedented position and was unable to identify what could be done to set a balanced budget, given that WG had already provided figures for an indicative Settlement.  He went on to say that decisions to invest in capital projects should be put on hold given the current situation.

On the comments raised, Councillor Chris Dolphin referred to the financial benefits of the Council’s bids for the Levelling Up Fund and the opportunity for Member input on budget considerations led by the Chief Executive and Chief Officers team.  On budget solutions, he felt it was important for residents to be made aware of the implications including potential cuts to services.

The Chief Executive reminded the Committee that the 2.4% indicative settlement for 2024/25 would present even more significant challenges than the 3.5% for 2023/24 particularly in the context of a potential recession facing the UK.

The recommendation, which was amended to reflect the debate, was moved and seconded by Councillors Bernie Attridge and Bill Crease.

RESOLVED:

That the concerns raised by the Committee on the Medium Term Financial Strategy and Budget 2023/24 be reported back to the Cabinet when it considers the report.