Agenda item

            That the Committee endorses the framework for the revision of the Medium Term Financial Strategy 2016/17 – 2018/19

The Chief Executive introduced a report to provide Members with updated information on the Medium Term Financial Strategy (MTFS) for 2016/17 – 2018/19. 

                        The first year of the MTFS for 2015/16 had been agreed and published in 2015 and the next version had been considered by Cabinet on 19 April 2016 and covered the period 2016/17 - 2018/19.  This was significant as 2019 was the year intended by the outgoing Welsh Government (WG) for the election of shadow authorities as a first step towards the re-organisation of local government in Wales.  The financial forecast for 2017/18 to 2018/19 was constantly changing and paragraph 1.05 provided details of a revised forecast totalling £17.20m.  However, a number of footnotes for issues that were being considered but not yet known had been included, such as the impact of Social Care transition costs and the assumption of a 3% rise in Council Tax.  The Chief Executive reminded Members that clarity from WG had not been received for longer term funding and therefore assumptions had been broadly made based on figures from the previous year.  The Council had adopted a three part strategy of:-

·         Service Reform

·         Corporate Financial Stewardship; and

·         Working with Welsh Government

It had been recommended that Cabinet continue with the strategy and work on service portfolio business plans would be shared with Overview & Scrutiny Committees in June 2016.  The Chief Executive emphasised the importance of demonstrating to WG how efficient, resilient and high performing the Council was, despite being such a low funded authority.  He spoke of the risks involved in receiving reduced funding and the discussions that were ongoing particularly about the charging cap for social care and the lower share of funding that the Council received based on demographics and deprivation.  He also commented on the Independent Commission for Local Government Finance in Wales report which recommended that Councils would be able to retain National Non Domestic Rate (NNDR) income growth. 

            The Finance Manager – Strategy Accounting and Systems advised that the footnotes shown in the tables included assumptions and reiterated that the information was constantly changing.  The figures for 2018/19 were currently low but the figures would increase as a result of the significant amount of work that was ongoing. 

            Councillor Richard Jones indicated that he had difficulty in supporting the third part of the strategy to lobby WG as he felt that any results could not be relied upon to support the budget.  He spoke of the hard work by Members and officers and said that he was not implying that it was not a good idea to work with WG but it was the reliance to bridge the gap that he was uncomfortable about supporting.  The Chief Executive said that the Council was not at this stage relying on any assistance from WG but wanted to be able to take forward a strategy that could provide help particularly in areas such as reductions in Revenue Support Grant (RSG) and the Social Care sector.  He commented on the alternative service cost reduction proposals that would need to be re-considered if support could not be provided by WG and added that having a gap in the working budget was a significant risk.   

            Councillor Robin Guest spoke of the concerns raised by Councillor Jones and welcomed the inclusion of the third strand to the strategy which would enable discussions to be held with WG.  He said that some Members had been sceptical previously because it had been felt that asking for help was unrealistic. He acknowledged that the approach taken for 2016/17 had resulted in a better than expected outcome. 

            Councillor Aaron Shotton recognised the concern about some of the assumptions made in the figures such as a 1.5% reduction in the RSG.  However, he spoke about the continued approach that was needed on discussions with WG.  The business plan projections for 2016/17 of £7.7m had not yet been agreed and he said that if these were not supportable options, then the efficiencies figures could potentially reduce.  He reminded Members that the Council did not take decisions lightly particularly in relation to reducing or closing services and spoke of the impact on communities if the Council was not able to provide a balanced budget.  The Chief Executive spoke of the funding formulas and the flexibility that could be considered by WG to ensure that all Councils were funded fairly.  He commented on the Intermediate Care Fund provision and the extra £50m that had been made available by WG and highlighted other areas where additional monies could be retained by Councils, such as the NNDR for new businesses.  He felt that this was an opportunity for the Authority to put a robust and well evidenced lobbying case to WG. 

            In supporting the recommendation, Councillor Arnold Woolley commented on the issue of finance at WG and said that it was important to lobby WG both individually and collectively.  Councillor Richard Jones spoke of additional monies that had been provided by WG to the Health Board at a time when the Council was seeking assistance and that was why he had been unable to support the suggestion of lobbying WG.  Councillor Paul Shotton said that he hoped that there would be a positive response from WG and welcomed the comment from Councillor Woolley about all party lobbying. 

            Councillor Guest sought clarification on local government reform and whether this was still to be progressed following the departure of Leighton Andrews as the Minister for Public Services.  He felt that any reforms would have an impact on the MTFS.  Councillor A. Shotton said there was currently no party with overall control of WG and that it was assumed that discussions would take place in due course on whether the proposals would continue.  He also spoke of the collective weight that needed to be applied to the lobbying case to WG and spoke of a grant that had been made available to some rural authorities following concerted pressure by others.         

            RESOLVED:

            That the Committee endorses the framework for the revision of the Medium Term Financial Strategy 2016/17 – 2018/19