Agenda item

            That the report be received and noted.                                              

The Chief Executive introduced a report to present part one of the latest revision of the Medium Term Financial Strategy (MTFS) which set out the financial forecast for the Council for 2015-2018. 

                        He commented on the recent Member Workshop on the Medium Term Financial Plan (MTFP).  There was currently no indication of the amount of the Revenue Support Grant (RSG) that the Council would receive for 2016/17 and this, and the budget gap, would be considered as part 2 of the Strategy.  The period of the Plan was for three years from 2015/16 to 2017/18 which would take the Council to the end of the first year of its new electoral cycle with the next local elections due in May 2017.  The Chief Executive added that following the Welsh Government (WG) elections, it may be possible to consider a five year plan.  It was anticipated that there would be a significant gap in funding for 2016/17 and at this stage, the Council did not have a set of options to close the gap.  The Chief Executive commented on the amount of funding that had been allocated to the Health Service. 

                        The Corporate Finance Manager advised that the projected ‘gap’ for 2015/16 to 2017/18 was £52.8m and reiterated the comment that there was uncertainty over the funding from WG.  The figure of £52.8m was based on an assumption of 3.5% reduction in the RSG but a 1% difference on this could result in a shift of £2m.  Expenditure consisted of national, local and workforce pressures along with inflation and income was received from the RSG and Council Tax.  The Corporate Finance Manager commented on an additional workforce costs which were accumulating. 

                        The Leader of the Council & Cabinet Member for Finance said that the magnitude of the cuts that the Council faced was significant.  It was important that Members had an understanding of the impact of 30% cuts in each department which could increase depending on the level of ring-fenced funding for Education and Social Care.  He expressed significant concern that the Council would not be able to provide a balanced budget without undertaking extremely difficult and unprecedented reductions in services. It was also anticipated that the RSG settlement figure would not be known as early as it had in previous years.  If the details were not known until early February 2016 as had been suggested, this would create significant difficulties in terms of the timeline for setting the budget. 

            Councillor Ron Hampson asked about the Council’s assets and whether the best price was being achieved.  The Chief Executive indicated that the Council had an Asset Strategy and that some assets were being retained as they generated an income for the Council.  He reminded Members that a capital receipt from the sale of an asset could only be received once and that capital receipts were used to co-fund the capital programme and not annual revenue expenditure.

                        Councillor Richard Jones felt that the details contained in the strategy was a predictive forecast and that the recommendation should therefore be amended to receive and note part one of the Strategy rather than receive and adopt it. 

                        In welcoming the document, Councillor Carolyn Thomas referred to the Independent Living Fund (ILF) pressure of £0.338m for 2015/16 reported on page 22.  She sought clarification of the amount of the Minimum Wage and asked whether the recent budget statement by the Chancellor to pay a Living Wage of £7.20 per hour would have an impact on the pay bill for the Authority.  Councillor Thomas referred to discussions that would need to be undertaken on budget cuts and said that it was important that Town & Community Councils were aware of the overall picture for their area to allow comparison of services that were at risk to rank the services in order of importance.  She suggested that the public needed to be kept informed of the difficult decisions that the Council faced.  Councillor Thomas also commented on the importance of making the best decisions on the sale of assets.  In response, the Chief Executive said that the Council currently paid above the rate of the Minimum Wage and that the Flintshire’s lowest hourly pay rate of £7.189 was close to the rate of the Living Wage.  In his speech, the Chancellor had indicated that he expected the Public Sector to pay the Living Wage but it was not known if this would be a requirement for Local Government.  The proposal by the Chancellor would not impact the Council in the forthcoming few years but by 2020 when it was suggested that the Living Wage should be £9.20, this would create a significant pressure on the wage bill.  On the issue of the ILF pressure, the Corporate Finance Manager advised that this had now been identified as an underspend due to funding received from National Government. 

                        Councillor Arnold Woolley spoke of alternative delivery models and commented on a reported increase in the workforce and raised concern that the Council seemed to be ‘downsize mode’ and would continue to lose staff.  Councillor Woolley also disagreed with the details reported for inflation.  The Chief Executive confirmed that the workforce was reducing, and explained that the figures used for inflation were obtained from reputable sources. 

                        In referring to an emerging pressure for software maintenance for Information Technology, Councillor Andy Dunbobbin queried whether an update could be provided on the cost of the pressure.  The Chief Executive responded that the figure was still to be confirmed. 

                        Following a comment from Councillor Ron Hampson about a nationally set workforce pay award, the Chief Executive advised that pay awards were previously funded nationally but any future increases would need to be funded by the Council and would therefore create a budget pressure.  

                        A discussion ensued on whether the recommendation should remain unchanged or whether it should be amended to receiving and noting the report.  On being put to the vote, it was agreed to receive and note the report.  

The Chief Executive advised that another Member workshop on the MTFS would take place in the near future.  Councillor Woolley spoke of the need to consider the effects of the difficult decisions that the Council would have to face in the future because of cuts in funding.   

            RESOLVED:

            That the report be received and noted.