Agenda item

(1)       That Council is recommended to approve a balanced budget for 2016/17 based on a combination of the previously adopted Stage One proposals and the new Stage Two of £3.571m as set out within Table 1 of the Council report; and

(2)       That Council calls on Betsi Cadwaladr University Health Board to allocate a proportion of the additional Intermediate Care Fund monies granted by Welsh Government to assist the Council, in its capacity as a commissioner of care, in meeting the increasing provider costs within the local residential and nursing and specialist provider independent care sector to both sustain the provider market and protect the secondary and acute health sector from increased demand.

Councillor Shotton introduced the budget options for the closing Stage Two of the annual budget process, adding them to the budget proposals adopted at Stage One in January, for recommendation of a balanced budget to County Council that afternoon.

            He expressed his thanks to all Chief Officers, Cabinet Members and employees for their help in achieving a balanced budget in what had been the most difficult year faced by the authority to date.  He was pleased that a balanced budget had been achieved without devastation to public services and commented on the protection of the three local authority care homes, leisure centres and additional funding for schools budgets during the difficult budget process.

            The Chief Executive explained that Stage Two was before Members for consideration, with the previous Stage One being appended for information.  The remaining Stage Two budget options were detailed in fully the report and reflected how the amount of £3.517M would be met, which were:

·         Review of New and Emergent Pressures;

·         Workforce;

·         Council Tax;

·         Use of Reserves and Balances; and

·         Other Adjustments.

There were eight significant risks outlined in full in the report, which were:

·         Impact of reductions in Specific Grant funds;

·         Inflationary impacts;

·         Failure to achieve income targets in full;

·         Failure to achieve efficiency targets in full;

·         Insufficient capacity to implement change programmes and projects to time and to financial target;

·         Impact of new and emergent pressures;

·         Over use of reserves and balances; and

·         Sufficiency of remaining reserves and balances to meet unforeseen pressures.

The Chief Executive said the Council would have to have a greater ‘appetite’ for risk which was the same for all public bodies in the fiscal climate.  He explained that provided the risks were understood, the likelihood of their occurring and the impact they would make if they did so occur was assessed, and there were sufficient plans to mitigate those impacts in that eventuality, then the approach to risk could be supported.  An underlying organisational risk was that there was less financial flexibility to adjust to new cost pressures in year as budgets were more precisely based on forecast need with smaller margins for flexibility and error, with the total quantum of funding available to the Council as a corporate body being smaller than in recent years.

He provided details of a service issue which had been raised late in the budget process, which was the provision of a weekly allowance to the clients of the Learning Disability Workforce Schemes. Cabinet, since the publication of the January budget report, had directed that this allowance be continued for 2016/17 and the budget reinstated.  This required a budget provision of £0.070M which had the impact of increasing the remaining gap to £3.517M.

An additional area for consideration was the discussions and negotiations that were ongoing between the independent care providers and the Council for commissioned services in residential, nursing, specialist care, domiciliary care, and direct payments, over the rate of annual uplift for to inflationary costs in the sector.

The Final Settlement was due to be announced on 9^th March 2016 and this late date presented challenges for all councils in setting a balanced budget within the statutory timescales, whilst ensuring there was sufficient time to deal with the practicalities of Council Tax billing in advance of the new financial year.  Advice provided by Welsh Government (WG) was that there was unlikely to be any significant change from the allocation provided at the Provisional Settlement stage.  Therefore setting a budget now based on the Provisional Settlement was considered low risk.

The Corporate Finance Manager and Section 151 Officer provided further information on each of the work-stream areas on how the budget gap would be met, primarily focussing on setting the Council Tax at 4.5%, reduction in the annual contribution to GWE and the adjustment to the levy payable to North Wales Fire and Rescue Authority.

On Council Tax and the use of Reserves and Balances, several factors required careful consideration which were the extent of the remaining gap to be funded, the comparison of planned Council spend with the Standard Spending Assessment (SSA) as the national spending guideline, and the impact of using too high a level of reserves now on the 2017/18 budget.

Although higher than in previous years the proposed increase in Council Tax of 4.5% was still 0.5% lower than the maximum allowable level of 5%, and the utilisation of £1.429M of reserves and balances was consistent with examples of recent local practice and was not at a level where sustainability of budget planning was unachievable against the latest Medium Term Financial Planning forecast.

The formal advisory opinions of the Corporate Finance Manager and Section 151 Officer and the Chief Executive were detailed in full in the report.

Councillor Attridge said Cabinet was pleased to be in a position to present a balanced budget to County Council that afternoon, explaining the difficult year the Chief Executive, Chief Officers and Cabinet Members had faced in achieving that.  He thanked the Chief Executive and all officers who had been involved in the process and commented on the investments being made in education and social care. 

In response to a question from Councillor Kevin Jones, the Corporate Finance Manager explained that the rise of 1.5% in Council Tax roughly equated to the additional funding for schools.  The Chief Executive added that if that funding was not found through the rise in Council Tax then there would inevitably be an impact on services.

Councillor Shotton commented on the recent public consultation events that had taken place on budget consultation where overwhelming support was given at each event for a rise in Council Tax for the protection of services.

Councillor Shotton read out two amended recommendations which were supported unanimously. 

RESOLVED:

(a)       That Council be recommended to approve a balanced budget for 2016/17 based on a combination of the previously adopted Stage One proposals, and the new Stage Two of £3.517M as set out within Table 1 of the Council report; and

(b)       That the Council calls on Betsi Cadwaladr University Health Board to allocate a proportion of the additional Intermediate Care Fund monies granted by Welsh Government to assist the Council, in its capacity as a commissioner of care, in meeting the increasing provider costs within the local residential and nursing and specialist provider independent care sector to both sustain the provider market and protect the secondary and acute health sector from increased demand.