Agenda item

2017/18 Council Fund Budget Stage 2

Purpose:       To approve the Corporate Financial Stewardship options following consideration of feedback from Corporate Resources Overview and Scrutiny Committee on 30/11/16 and set out the next stages in the budget process for 2017/18




That the Stage 2 budget proposals for 2017/18 be approved.


The Chief Executive introduced the report to present the Corporate Financial Stewardship Proposals (Part 2 of the Strategy) for approval.  He advised that the proposals had been considered, and recommended at the meeting of Cabinet which had been held prior to the meeting of County Council this afternoon, and following consideration by the Corporate Resources Overview & Scrutiny Committee on 30 November 2016. 


The Chief Executive provided background information and context and outlined the further work to be done to close the ‘budget gap’ and conclude the budget proposals for 2017/18. The Chief Executive, Corporate Finance Manager, and Finance Manager, Technical and Accountancy, gave a joint presentation which covered the following areas:


·         the forecast ‘Budget Gap’ 2017/18

·         where the Council had ‘left off’ in November

·         Corporate financial stewardship proposals

·         Apprentice Tax Levy

·         central loans and investment account

·         summary of overall budget position

·         Domiciliary care cap review

·         Corporate financial stewardship – ongoing work

·         final stages of 2017/18 budget setting


Councillor Aaron Shotton thanked the Chief Executive, and Corporate Finance Manager and his Team, for their presentation and work on the Stage 2 budget proposals.  He was grateful that Officers had not brought forward a request for cuts to be made to services but had found innovative solutions in corporate financing and over how the Council would meet its revenue provision for borrowing and debt. 


Councillor Shotton advised that Cabinet, at a meeting which had been held prior to the meeting of the Council this afternoon, had endorsed to Council a final set of detailed proposals for Stage 2 of the budget and he moved the recommendation in the report.  The proposal was seconded.  Councillor Shotton said he supported the incremental approach to setting the budget and commented that Members had been given more opportunity this year than previously to engage with and discuss elements within the budget process.  He sought support from Members for the resolute approach which had been taken in Flintshire to protect services from cuts, despite reduced government funding and austerity, which was different to the stance adopted in other local authorities. 


Councillor Shotton spoke of the commitment within the budget this year to provide a 1.3% increase in the school budget.  He commented on the further work to be done to set a legal balanced budget and to continue lobbying of the Welsh Government for recognition and support of the Council’s low funding position with specific emphasis on social services care pressures.  Councillor Shotton gave a commitment that in leading to a balanced budget the Council would not bring forward any proposals for cuts to services


In response to the comments made by Councillor Nigel Steel Mortimer concerning the annual Minimum Revenue Provision charge and his suggestion for further savings to be achieved through consideration of the third option, the Chief Executive advised that the annuity method was not appropriate for historic debt but might be appropriate for selective future borrowing.  The Finance Manager, Technical Accountancy, acknowledged that whilst the suggestion put forward was more affordable in the short term it would not be considered more prudent or sustainable in the long term and explained the reasons why the annuity method was not recommended as the way forward.  The Chief Executive explained that following extensive discussion with the Council’s advisors and the Wales Audit Office all were clear that the recommended method was the most appropriate.


Councillor Mike Peers asked that figures which are presented as part of the balancing of the budget are robust and realistic.   He also commented on the reference made by the Corporate Finance Manager to in-year pressures and reserves and explained why he would like to explore this further.  The Chief Executive acknowledged the point raised and gave an assurance that Officers were not complacent that any overspends in-year could be mitigated by reserves.  He commented on the contingency reserve which was created specifically to give in-year protection against risk and said it was used correctly, however, the point about the scale of risk was acknowledged.  The Chief Executive also responded to the comments made by Councillor Peers about estimated figures and explained that the figures presented had been reasonably stable for several months, with some small variations, and that some cost pressures were beyond the Council’s control.  He commented on the solid budget process and the importance of the rigour, transparency and scrutiny which had taken place to date. The Corporate Finance Manager clarified that his reference had been to a small reserve for unforeseen events in year.


Councillor Robin Guest referred to the annuity method for future borrowing and asked if the Council would need to make a formal decision on this in the future or if a decision was made on a case by case basis as borrowing was made.  He also referred to the figures in the report concerning the Apprenticeship Levy and sought clarification of the figure which would be taken from reserves.  Responding to the question on the Apprenticeship Levy the Chief Executive said that it was recommended that £699k be taken from reserves.  The Corporate Finance Manager advised that the Council would be asked to formally approve the principles and changes to the Minimum Revenue Provision for budget purposes today and then case by case as appropriate going forward.




That the Stage 2 budget proposals for 2017/18 be approved.

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