Issue - meetings

Council at its meeting on 29^th January 2019 agreed to defer the consideration of the Council fund budget report pending the requirement for officers to review several specific areas of corporate finance.  The outcome of this work was shared at the Member briefing on 14^th February 2019.

Cabinet are re-invited to make recommendations to Council on the basis of the advice contained within the report to Cabinet on 22^nd January and following consideration of the additional technical advice and professional opinion on corporate finance at the Member briefing on 14^th February 2019.

(1)       That Council is advised that the duty to set a legal and balanced budget is a primary duty and one which cannot be deferred or defaulted upon.  Council needs to take into account the expenditure requirement for both 2019/20 and the medium term in setting the annual budget.  In the absence of any change in position on the local government funding allocation for 2019/20 by Welsh Government, and given the professional advice and opinion provided by statutory officers, the only options which remain open to Council to balance the budget are Council Tax and the proportionate use of reserves and balances;

(2)       That Cabinet recommends to Council the further use of a combination of earmarked (£132k) and un-earmarked (£189k) reserves and balances of £321k to reduce the remaining budget gap.  A budget requirement of £2.781m then remains to be met by Council Tax (to include the levy for the North Wales Fire and Rescue Service).  An annual rise of 8.75% is recommended to meet this total requirement.  Once combined with the precepts of the Town and Community Councils and the Police and Crime Commissioner this annual rise will average out at 8.38% for a Band D property, equal to an additional £10.33 per month;

(3)       That Cabinet invite Council to note that a greater reliance on Council Tax to fund local services is inevitable given the funding policies of the UK and Welsh Governments.  The UK Government has set a policy of reducing Revenue Support Grant with English Councils expected to be more independent in relying on Council Tax, retained National Non-Domestic Rates and other income to fund the majority of their expenditure, and Welsh Government has made a working assumption that Council Tax will rise by 6.5% on average across Wales in its own budget calculations;

(4)       That Cabinet invite Council to accept the invitation of the Minister for Local Government and Housing to make proposals for a more sustainable and equitable funding system for local government in Wales; and

(5)       That Cabinet invite Council to form a cross-party working group, to be supported by internal professional advice and external expertise, to make proposals to Welsh Government and the family of local government in Wales to follow (4) above.

            The Chief Executive introduced the verbal Council Fund Budget 2019/20 – Third and Closing Stage report and provided copies of the slides that would be presented at County Council later that day.

            The slides covered the following areas:

·         Setting a legal and balanced budget;

·         Reminder of the current budget position;

·         Update on the review of specific areas of Corporate Finance following deferral of the budget at the Council meeting on 29^th January 2019;

·         Minimum Revenue Provision (MRP) – use of capital receipts

·         Un-earmarked and Earmarked Reserves

·         Debt rescheduling and cash flow management

·         Professional opinions.

The Corporate Finance Manager provided details on the overall position, including the Medium Term forecast.   Full details were outlined in the slides on the use of Capital Receipts including his professional advice that Capital Receipts should not be used to repay debt.  Detailed information was also provided on the use of un-earmarked reserves and earmarked reserves, including the impact it would have on future years.  He recommended that an additional amount of £0.321m from surplus reserves built up in-year be used, which was a reasonable adjustment (made up of £0.189m from un-earmarked reserves and £0.132 of earmarked reserves).

An analysis of Band D charges, including the annual, monthly and weekly increases, was provided.  This includes the precepts for Town and Community Councils and the North Wales Police & Crime Commissioner.

The professional opinions of the Section 151 Officer/Corporate Finance Manager and the Chief Executive remained unchanged. In addition to those opinions were their professional opinions on the future.  They stated that the sustainability of Council budgets was under serious threat with few local service choice options of any scale remaining.  There was concern on the reliance on diminishing reserves in annual budget-setting over a series of years, and the proliferation of unfunded national commitments caused on ongoing major concern.  It was difficult to see how the Council would be able to successfully balance the budget for 2020/21 onwards without some reversal of national fiscal policy.  Early planning for 2020/21 – 2022/23 was critical with an updated forecast for the medium-term.

The Chief Executive concluded that the cut-off date after which it was not practical for officers to be able to respond to Member questions/requests for information had passed.  Members had been notified of this.

Councillor Shotton said this had been the most difficult budget to date for the Council and concurred that there needed to be a reversal of national fiscal policy.  He commented on the challenging years that were being faced which needed to be borne in mind as any additional use of reserves would compound the problem in future years.  He was not comfortable with the proposed Council Tax rise but there were no other options available.

A set of proposed resolutions was circulated which were accepted by all Cabinet Members.

            Councillor Attridge expressed his disappointment that Welsh Government (WG) did not prioritise local government as they did with Health.  Some other local authorities were seeing a higher rise in Council Tax than what  ...  view the full minutes text for item 307