Issue - meetings

(a)          That the comments on the Medium Term Financial Strategy and Budget 2023/24 report be reported back to the Cabinet when it considers the report; and

(b)          That a letter be sent on behalf of the Committee to the Welsh Government First Minister, the UK Chancellor and local elected Welsh Government Members.

The Corporate Finance Manager presented a report to update Members on the additional budget requirement for 2023/24 prior to cost pressures and efficiency proposals being reviewed by Member briefings and Overview & Scrutiny committees during the Autumn.

Since the additional budget requirement of £16.503m for 2023/24 reported in July, further work had taken place to reflect changing service demands and assess the impacts of emerging pay awards and inflationary pressures based on the latest information, as detailed in the report.  The in-year impact was reported in the next agenda item.  The updated forecast indicated a minimum budget requirement of an additional £24.348m of revenue resources for 2023/24 as shown in Table 1.  Clarification was given on delegated school pressures and other pressures some of which remained under review.  There were a number of ongoing risks which could impact further on the additional budget requirement and would be kept under continued review, including Out of County Placements and pay award outcomes.

The budget solutions available to the Council reinforced the need for additional financial support from Welsh Government (WG) to meet the costs of pressures such as increased pay awards and inflation which were outside the control of councils.  The Corporate Finance Manager reminded Members of the indicative settlement figures provided for 2023/24 and 2024/25, and advised that an uplift to the Council’s settlement to the Welsh average would equate to an additional £8m.  Without a supplementary increase to the allocation, there would be a serious and significant challenge for the Council to meet its statutory duty in setting a legal and balanced budget for 2023/24 and for future years.

In expressing concerns about the seriousness of the situation and acknowledging the significant impact of national decisions such as pay awards and inflation, the Chairman said that solutions should not include increases in costs and that the scale of efficiencies to meet the gap was not achievable, which reiterated the need to make representations to WG.

Councillor Bernie Attridge agreed that direct representations should be made to Ministers in Cardiff for additional funding to avoid impacting core services.  He said that councils should not be expected to fund national decisions and referred to the different funding approach applied to other areas of the public sector.

Councillor Ian Roberts gave assurance that the case continued to be made for funding national decisions.  He said that whilst representations were being made to WG, it was important to also take into account the impact of key decisions by the UK Government.  As a member of the Welsh Local Government Association (WLGA) Financial sub-group, he was urging use of current data to influence the funding formula.  He said that without additional financial support, the Council would face challenging decisions in order to set a legal and balanced budget.

On rising inflation costs, Councillor Alasdair Ibbotson referred to anticipated pressures identified within the Medium Term Financial Strategy (MTFS) for this year categorised as lower, medium and higher variances.  He asked for details of which, if any, of  ...  view the full minutes text for item 25