Agenda item

(a)       That the verbal update on the Provisional Settlement and the Medium Term Financial Strategy be received; and

(b)       That the Leader and the Chief Executive be thanked for their efforts in lobbying on the Council’s behalf. 

The Chief Executive provided a verbal update on the Medium Term Financial Strategy.                     

                        He explained that the provisional settlement had been received the previous day and a full presentation would be provided to Cabinet at its meeting on 15 December 2015.  The provisional settlement was a draft but it rarely changed prior to the publication of the final version.  However, there was a longer consultation period to March 2016.  Based on intelligence from Welsh Government (WG) to expect the same rate of cut for 2016/17 as for 2015/16, the Council had been working on a reduction of 3.5% in Revenue Support Grant (RSG).  The average cut for Wales had been 1.4% and Flintshire County Council was to receive a reduction in RSG of 1.5% which put the authority at 12^th out of 22 Councils.  The difference between a reduction of 1.5% compared to 3.5% equated to £3.8m.  Details of specific grants had not yet been provided but it had been indicated that the Supporting People grant would not change which was positive.  It was anticipated that the Single Environment grant would be reduced by 6% to 7% and clarification was still awaited on the Families First grant.  However, the Council Tax Reduction Scheme was not inflation protected and therefore provision of the scheme would become a budget pressure of approximately £350,000 over the two years to date.  The Chief Executive said that it was important to remember that even though Flintshire was 12^th in the table for RSG, it was 19^th out of 22 for ‘per capita’ funding.  The average ‘per capita’ was £1309, Flintshire received £1196 and the highest figure was £1576 which was a substantial difference.  Discussions would be undertaken at a later date on the remaining budget gap.  The Chief Executive added that the Pupil Deprivation grant allocation per head was to increase from £1050 to £1150 which amounted to £250,000 but this figure was passported directly to schools. 

                        Councillor Aaron Shotton said that the timelines currently set for the budget meetings in December 2015 remained unchanged and further meetings would be arranged for January 2016 which would allow for the opportunity to consider the remaining budget gap.  He felt that the improved position in funding should be welcomed along with the strong case put forward by Flintshire County Council to argue the case against cuts to public services.  He felt that without the lobbying by the Council, the cuts by WG would have been greater and that the fact that the reduction was only 1.5% should be recognised as a success.  He commented on the additional Social Care funding which had been announced totalling £50m but indicated that this was already included in the RSG allocation which was based on a formula.  On the issue of Council Tax Reduction Scheme, further discussions needed to take place on exemptions to the scheme.  Councillor Aaron Shotton welcomed the lower than anticipated reduction in funding, as a result of lobbying, which he felt was positive. 

                        The Chief Executive said that WG had made a commitment to review the Council Tax Reduction Scheme (CTRS) in the longer term.  He added that WG had set the budget in the context of the Chancellor’s four year plan. 

                        Councillor Paul Shotton felt that recognition should be given for the commitment by WG for the slowdown in cuts as opposed to the devastating cuts seen across England.  Councillor Marion Bateman thanked the Chief Executive and Councillor Aaron Shotton for their hard work and determined lobbying to WG. 

                        Councillor Richard Jones suggested that the lower than anticipated cut in RSG was not as a result of lobbying and referred to the CTRS which was not a fully funded scheme and would therefore result in a budget pressure.  He spoke of the extra investment in Social Care that had been lobbied for but added that the additional funding for health had been included in the RSG already allocated and was therefore not extra money.  Councillor Jones said that the lobbying had not changed the funding formula and referred to the smaller reductions in RSG for many South Wales Councils. 

                        In response to a query from Councillor Tim Newhouse, the Chief Executive explained that using the funding formula, Flintshire County Council were 19^th out of the 22 Councils per capita and received £1196, the average was £1309 and the highest, which was Blaenau Gwent, received £1576.  Councillor Newhouse suggested that if Flintshire received the average, the Council would be £17.5m better off and felt that the figure required to plug the gap was £25 per person which he felt was realistic.  He added that he hoped that lobbying would continue. 

                        The Chief Executive felt that there was expectation that a new WG would address the funding formula and commented on some of the rural counties that had seen significant reductions in their RSG based on the current formula.          

                        Councillor Peter Curtis concurred with the comments of Councillor Bateman and welcomed the efforts of the Leader and all those who had lobbied. 

                        Councillor Shotton reminded Members that the settlement would not be finalised until March 2016 and suggested that there was still more work to be done on lobbying WG.  He gave thanks to those Members who had supported the proposals to carry out discussions with WG.  The Chief Executive said that even though the indicative settlement had been better than anticipated, there was still a significant budget gap and some difficult decisions would still need to be made.  On the issues raised by Councillor Jones, he said that discussions would be held on the unsustainability of the CTRS and on funding of the NHS and Social Care. 

                        In response to a question from Councillor Newhouse about longer term budget forecasting, Councillor Aaron Shotton confirmed that the MTFS covered the period to 2018 and that the details had been included without any detail from WG of the indicative funding for 2017/18.  Clarity from WG was important to allow the Council to plan accordingly but if the figures for 2016/17 were replicated, then the MTFS would need to be reassessed.  Following a query from the Chairman, the Chief Executive said that indications had been given that the reduction for RSG for 2015/16, 2016/17 and 2017/18 was expected to be 3.5% as had been the case in 2014/15 and it had only been confirmed the previous day that the reduction for 2016/17 was 1.5% for Flintshire County Council.           

                        The Chairman thanked the Chief Executive and Councillor Shotton for their lobbying work. 

            RESOLVED:

(a)       That the verbal update on the Provisional Settlement and the Medium Term Financial Strategy be received; and

(b)       That the Leader and the Chief Executive be thanked for their efforts in lobbying on the Council’s behalf.