Agenda item

To provide the Committee with the current financial forecast position for 2018/19 and consult on the Stage 1 Council Fund Revenue budget proposals for 2018/19.

That the Committee notes the Stage One budget proposals and financial pressures, and the proposed savings as follows:

·         Records Management - reduction in the amount of records in storage -£0.010m.

·         Customer Services - new service models to deliver customer access through digital would return an efficiency of £0.050m.

·         Flintshire Connects - options to change the delivery of the Connects service could deliver a range of savings between £0.056m and £0.112m depending on the option chosen.

·         Registration Services - additional income from charging for declaration of births would deliver an additional £0.012m.

The Chief Executive introduced the report setting out the current financial forecast position for 2018/19 to seek views on Stage 1 of the Council Fund revenue budget proposals.  Budget options for each service portfolio had been considered by the respective Overview & Scrutiny Committees, noting that the Welsh Government (WG) announcement of the Provisional Local Government Settlement was a key variable in the financial forecast.

A briefing note by officers on the outcome of the Settlement announcement was shared, together with information issued by the Welsh Local Government Association (WLGA).

Discussions during the budget process had generated widespread concerns about the impact of further reductions on service resilience, as indicated by risk assessment levels.  Budget efficiency options totalling around £3m had raised no objections, with the exception of a £35K efficiency for the Music Service for a new service model which was still under development.

The Chief Officer (Governance) gave a summary of the efficiencies achieved in his portfolio, noting that some elements of the budget were outside the control of the Council.  The vast majority of planned efficiencies had already been delivered which meant that further savings posed a risk to operating levels.  The benchmarking information demonstrated that services were operating at either the same or below average cost of peer authorities.

The Senior Manager, Human Resources & Organisational Development advised that efficiencies in her portfolio were mainly a result of major restructuring which left the service operating at optimal level.  There was a risk that further efficiencies would affect the ability of the service to meet the needs of a large-scale workforce.

The Finance Manager, Corporate Accounting & Systems reported that having achieved most of the planned efficiencies through structural changes and new software, work was ongoing to deliver the remaining £200K.  Demand on the service was high, particularly in view of the changing financial position of the Council.

The Finance Manager, Community Services provided an overview of efficiencies delivered in Customer Services, Revenues & Benefits and Welfare Rights, mainly generated through the Flintshire Connects service.  She spoke about the development of digital services for customer access and improvement in the Registration Service which was performing well against national key performance indicators.

Officers were undertaking detailed analysis of the outcome of the settlement and were awaiting information on specific grants.  Following the initial forecast position of a £11.7m projected gap, the reduction of 0.9% in funding would increase the budget gap by £1.9m including new responsibilities for homelessness duties as an additional pressure.  It was also predicted that a further pressure on national non-domestic rates (NNDR) was likely to have a net impact of £64K.  On the summary of inflation, the projected increase in gas charges was being reviewed, following a challenge.  The only new efficiency for Corporate Services was £0.010m in Records Management.

Councillor Richard Jones asked whether the benefits of the Council collecting NNDR was outweighed by the resources required to do this.  The Chief Executive explained that the performance of individual councils on collection targets affected the redistribution of funding across Wales.  The lean operating model in Flintshire had been recognised.  On benchmarking for ICT service provision, the Chief Officer advised that the unit cost was lower than average with spend more widely across the Council to support higher levels of agile working.  This was a continuing trend, supported by the digital strategy, to help deliver efficiencies in other areas.

The Chairman raised a query on business rates for the County Hall building and was informed that a confidential report would be considered at the next meeting of Cabinet.

It was acknowledged by Councillor Patrick Heesom that budget options were reaching a critical stage but he raised concerns about the effect of any potential collaborative executive arrangements to address ‘deficit areas’.  He also asked about contingency arrangements to manage increases in inflation.  The Chief Executive said that the Council had no new plans in place for collaboration and that regional discussions remained open.  Councillor Shotton said that reduced finances from national government and increased pressures could not be resolved by sharing management resources with other councils.  He referred to the resilience statements across service areas, many of which were assessed as amber, and called upon Members to reflect on the implications of the next stage of the budget process.  On County Hall, he said that the Council was duty-bound to look at the scale and efficiency of its buildings to identify more operational savings.

In response to comments on reserves, officers gave a reminder that these could be used only once and that there was a protocol for decisions on earmarked reserves.  An update was also included as part of the revenue budget monitoring report.

Following Councillor Arnold Woolley’s concerns on the impact of capacity issues in Accounts Payable, it was explained that the team was now leaner but this did not pose any risk to the cashflow position of small and medium enterprises.

Councillor Paul Johnson pointed out reference to the unpredictable nature of inflation in the current economic climate.  Officers explained that a risk-based approach was taken to inflation with predictions based on national intelligence and regular briefings with specialist advisors.

Councillor Jones spoke about the funding given by WG to the National Health Service which did not improve the efficiency of that service, and therefore it seemed logical to reconsider allocations for councils.  Councillor Shotton said that the provisional settlement was a separate matter to the funding formula.  He explained that the Council would continue to make the case to WG about the value of social care and its benefits to the Health service.  Councillor Jones remarked on links between the funding formula and calculation of the Standard Spending Assessment (SSA) and asked if key indicators were missing to support the Council’s funding case to WG.  In responding, Councillor Shotton said that a unified voice was needed by local government in Wales.

Following comments by the Chairman, the Chief Executive clarified how population estimates were used at a national level to inform funding distribution.

When asked by Councillor Heesom about seeking a change to the SSA calculation, Councillor Shotton said that a joint approach was needed across councils in Wales to strengthen the national case.

Councillor Jones agreed that the settlement figure and funding formula were different and that the distribution of both was a key issue.  He made the point that the Council should not rely solely on the funding formula to make representations to WG.

Following Councillor Johnson’s proposal to accept the recommendations in the report, the Chief Executive clarified that there were no objections to any of the Stage 1 options to be submitted to Cabinet and that the comments raised had been noted.

Councillor Jones proposed that the resolution include the efficiency for Records Management along with those for Customer Services.  This was supported by the Committee.

RESOLVED:

That the Committee notes the Stage One budget proposals and financial pressures, and the proposed savings as follows:

·         Records Management - reduction in the amount of records in storage -£0.010m.

·         Customer Services - new service models to deliver customer access through digital would return an efficiency of £0.050m.

·         Flintshire Connects - options to change the delivery of the Connects service could deliver a range of savings between £0.056m and £0.112m depending on the option chosen.

·         Registration Services - additional income from charging for declaration of births would deliver an additional £0.012m.