Agenda item

(a)       That the second and concluding part of the Medium Term Financial Strategy (MTFS) titled Meeting the Financial Challenge be adopted for consultation and development as the first step towards setting balanced budgets for 2016-17 and 2017-18;

 

(b)       That specific proposals set out by Cabinet for service reform, corporate financing options, and national support and relief be subject to detailed consultation and development; and

 

(c)        That there is early engagement with Welsh Government (WG) with the support and involvement of the Welsh Local Government Association (WLGA) as the representative body, on the case for national support and relief as set out in Meeting the Financial Challenge.

The Chief Executive introduced Part II of the Medium Term Financial Strategy for the three year period 2015-2018.  This was the most significant strategy the Council would be presented with and cross chamber support for early engagement with Welsh Government (WG) for some relief was sought.

 

A detailed presentation was delivered which covered the following areas:

 

·         Our journey thus far

·         What do the next three years look like?

·         An efficient and innovative Council

·         Council annual efficiency targets 2008/09-2015/16

·         A low funded Council

·         Our three part strategy

·         Business plan efficiency targets 2015/16-2017/18

·         Corporate finance efficiency proposals 2015/16

·         Funding pressures for support and relief

·         Balancing ambition and risk

·         Recommendations

·         What next?

 

Part I of the Strategy had been published earlier in the summer and provided a forecast of the resources which were likely to be available to the Council for the three year period, including the pressures on those resources.

 

Part II set out how the Council could manage a significant reduction in resources in a period of major reductions in national funding for local government, whilst seeking to protect local public services and retaining its position as a well governed and high performing local authority in Wales.  This was titled Meeting the Financial Challenge. 

 

Meeting the Financial Challenge detailed the £52.8m of budget reductions required over three years and explored how Flintshire was funded and performed compared to the rest of the local government sector in Wales  The funding strategy to meet the unprecedented financial challenge was set out in three parts:

            Funding Strategy Part 1: Service

            Funding Strategy Part 2: Corporate Financial Stewardship

            Funding Strategy Part 3: Working with Welsh Government

 

The strategy concentrated on how to meet the gap in 2016-17 of £20.8M and again in 2017-18 of £13.7m.

 

            The Chief Executive explained the importance of Flintshire being able to demonstrate that it was an efficient Council before WG would enter into discussions.  If WG did not provide support with flexibilities and some relief then the Council would have to turn to options for much deeper funding cuts which neither it nor the public would find acceptable.

 

            The Chartered Institute of Public Finance and Accountancy (CIPFA) had been engaged to provide an independent view on the case for Flintshire.  CIPFA tested the presumption that Flintshire was a ‘low funded council in Wales with less flexibility and capability to find sufficient efficiencies under the current funding system and formula’.  The report of CIPFA concluded that:

• Flintshire was a low spending authority on both Social Care and  Education
• Flintshire achieved a relatively high level of performance on both of these services despite the low level of expenditure
• Flintshire spent at an above average level on highways
• Flintshire achieved the highest level of performance in Wales on the performance measure of roads in poor condition

 

The analysis demonstrated that Flintshire was a low funded and high performing Council in its two principal service areas and was both a higher spending and a higher performer than the average in highways.  With a relatively low resource base there were few opportunities left for bridging the funding ‘gap’ through local innovation, without resorting to further and deeper service reforms, cuts and even closures of a scale unprecedented in North East Wales.  If the Council was exposed to budget cuts of a scale which it could not manage through existing plans and strategies, many services would no longer be able to be protected and these included schools budgets, day care services, residential care homes, roads maintenance, local bus services and leisure centres.

 

            There were five areas, listed below, where it was felt there was a legitimate case for WG to come to the support of the Council to fund cost pressures which had either been passed on to the Council through national decisions or meet its own critical social policy priorities.  They were:

1.    Extension of the Welfare State

2.    Public Sector Employment

3.    Health and Social Care as a Single System Needing Full Funding

4.   Educational Entitlement and Attainment

5.   Financial Freedom to Recover Costs to Make Services Sustainable

 

It was acknowledged that the WG itself was facing financial pressures but funding was available and it was about making choices.  The list of services outlined in the document that would be exposed to major cuts if the strategy did not receive universal support was outlined in section 5 of the document and that list was not exhaustive.

 

It was important to balance risk and ambition with the outcome being to set a balanced budget.  Was Flintshire to manage decline or support and serve its communities?

 

Early engagement with WG was strongly recommended with cross-council support.

 

Councillor Aaron Shotton thanked the Chief Executive for the presentation and also the Members who had attended the earlier workshops on the MTFS.  Meetings would be held with Group Leaders to build a coalition of support to work with WG for which he sought endorsement from all colleagues.

 

He commented on the services that would be exposed to cuts should help not be received and these were listed on page 22 of the MTFS Part 2 publication.  These were services that the residents of Flintshire held dear to them but the scale of the cuts for the following year would result in those services being vulnerable.

 

He stressed the importance of Members working together to combat and resist the austerity measures it faced on behalf of the tax payers of Flintshire, seeking support for a positive discussion to take place with WG to mitigate those cuts.  As Deputy Leader of the WLGA he needed to be able to demonstrate a coalition support from the Chamber with a unified voice moving forward.

 

Councillor Peers said it was important to be honest with the public and explain that the potential cuts to the services outlined in the MTFS was as a result of cuts in funding from WG and the only way those cuts could be prevented was with the help of WG.  He asked where in the strategy it gave an alternative to being in a position to recommend a balanced budget if help was not received from WG.

 

The Chief Executive said that in setting Part 3 of the MTFS, it was explained that the use of reserves was not a solution as the funds were not recurring.  They were also at a low level.  The only alternative was by extending the list of services which would be exposed to cuts or to significantly increase income.

 

Councillor Ellis, as Chair of the Social and Health Care Overview and Scrutiny Committee, spoke on behalf of that Committee asking all Members to listen to their concerns.  The Committee was worried that should help not be received from WG then statutory functions would not be able to be provided.  She provided details of the loss of services to date, including 220 community beds with the onus falling on Social Services.  The NHS was receiving an additional £40m but Social Services was picking up the burden from their reductions.  There was an increase in the elderly population and those with dementia and WG needed to be aware of those pressures faced by local authorities.  She sought support from all Members for the recommendations.

 

Councillor Carver felt the biggest problem was workforce pressures and referred to the exit packages that had been paid to employees who had left the authority.  He also commented on the provision of funds by WG to freeze council tax but this was not passed on to residents.

 

Councillor Carver also referred to figures that he had requested in July on what it would cost the authority to provide statutory services only.  He was still awaiting this information.

 

In response to the comment on workforce pressures, the Chief Executive said a full explanation was provided in Part 1 of the MTFS.  The cost per head of those leaving local government was the lowest figure across the public sector.  These departure costs were significant one off costs in return for ongoing budget efficiencies.  On council tax, he advised that no funds were passported to Flintshire to protect against council tax rises.  On the figures requested by Councillor Carver in July, this was a complex piece of work and the figures were still being collated.  When the information was finalised it would be provided to all Members.

 

Councillor Richard Jones said the Labour group was seeking cross chamber support for something that was a Labour issue as WG was Labour run and therefore it was a Labour problem.  He felt that savings were being cherry picked and gave examples of the closure of the transfer of cemeteries where he felt the liability had been passed to Town or Community Councils and the charges for assisted collections which would impact on the most vulnerable, questioning the amount it would actually save.

 

The Chief Executive said some of the service figures referred to by Councillor Richard Jones were estimated but they were not inaccurate.  The Council had not previously had three year business planning with the level of detail on efficiencies that was now being provided to Members and at such an early stage of annual budget planning.

 

Councillor Curtis spoke of the unpalatable cuts that the authority may need to make and said that support of the request for assistance from WG was something that all Councillors should do on behalf of every resident in Flintshire.

 

Councillor Butler spoke in support of the recommendations concurring with Councillors Aaron Shotton and Curtis that the proposals were with the aim of doing the best for the people of Flintshire. 

 

Councillor Woolley spoke against the recommendation and questioned the reasons why such austerity was being faced.

 

Councillor Carolyn Thomas asked, on the list of services outlined in the MTFS, would cuts would be made to statutory services.  She also asked for clarification that the reason for the budget cuts was not due to immigration. 

 

The Chief Executive explained that the list outlined in the document was not exhaustive but they were the likely areas to be impacted on initially.  On immigration, there was no local evidence to show that it was having any more of a financial impact than any other year.

 

Councillor Halford said that authority had been let down by officers who had approved pay offs of vast sums of money and not done their job.  She made reference to money spent on backfilling vacancies at a time when permanent staff were suspended and costs against the authority following a recent investigation.

 

Councillor Aaron Shotton said the remarks made by Councillor Halford were scurrilous and crossed a line.

 

Councillor Gareth Roberts spoke about spending to Standard Spending Assessment (SSA) saying it was difficult to keep the level of council tax down and maintain or increase services.  He suggested that WG could feel that Flintshire County Council did not require the level of funding it was seeking as it was not spending to SSA.

 

Councillor Legg expressed his disappointment that those who were less likely to be able to help themselves would most likely be the ones affected by the cuts imposed by WG.

 

Councillor McGuill said WG had to work with the authority but they had not demonstrated this in the last 12 months. 

 

In summing up, Councillor Aaron Shotton said the forthcoming WG elections should be used to the Authority’s advantage and added that the Labour group of Flintshire County Council was not WG.  He felt there was cross chamber criticism of WG and regardless of political persuasion Members should vote for the recommendations for the benefit of the residents of Flintshire which they would expect.  There were difficult questions to be asked of WG but they would be done so with diplomacy and negotiation.  He reiterated that the recommendation sought approval for a discussion to take place with WG.

 

He added that he did not agree with all proposals of the WG and reminded Members about the success of the recent ballot against transferring housing stock.  He appealed to Group Leaders to support the recommendations thus standing up for Flintshire. 

 

The Chief Executive concluded that the best strategy for the authority was to engage with WG.  The list in the MTFS was not prioritised as the Authority did not want to see any of the services adversely affected.  He added that all Members would support elements of the Strategy, such as parity of treatment in the funding of social care, and having the flexibility to make decisions and if they did, they should support the recommendations.

 

Councillor Attridge requested a recorded vote and was supported by the requisite nine other Members.  On being put to the vote the recommendations were carried.

 

For the proposal:

Councillors: Bernie Attridge, Haydn Bateman, Marion Bateman, Helen Brown, Derek Butler, David Cox, Paul Cunningham, Peter Curtis, Ian Dunbar, Andy Dunbobbin, Carol Ellis, David Evans, Ron Hampson, David Healey, Ray Hughes, Joe Johnson, Rita Johnson, Christine Jones, Colin Legg, Phil Lightfoot, Brian Lloyd, Richard Lloyd, Billy Mullin, Tim Newhouse, Vicky Perfect, Mike Reece, David Roney, Tony Sharps, Aaron Shotton, Paul Shotton, Ian Smith, Carolyn Thomas and David Wisinger

 

Against the proposal:

Councillors: Clive Carver, Adele Davies-Cooke, Jim Falshaw, Veronica Gay, Robin Guest, Alison Halford, Hilary Isherwood, Richard Jones, Dave Mackie, Hilary McGuill, Mike Peers, Neville Phillips, Gareth Roberts, Owen Thomas and Arnold Woolley

 

Abstention:

Councillor Amanda Bragg

 

 

RESOLVED:

 

(a)       That the second and concluding part of the Medium Term Financial Strategy (MTFS) titled Meeting the Financial Challenge be adopted for consultation and development as the first step towards setting balanced budgets for 2016-17 and 2017-18;

 

(b)       That specific proposals set out by Cabinet for service reform, corporate financing options, and national support and relief be subject to detailed consultation and development; and

 

(c)        That there is early engagement with Welsh Government (WG) with the support and involvement of the Welsh Local Government Association (WLGA) as the representative body, on the case for national support and relief as set out in Meeting the Financial Challenge.