Agenda item

(a)       That following a review, £1.927m of reserves and balances is released to contribute to balancing the budget;

(b)       That a 5% rise in Council Tax is set to balance the budget in combination with reserves and balances in (a) above; and

(c)        That a further rise in Council Tax of 1.71% is set to provide additionality of £1.140m specifically for schools budgets.

The Chief Executive introduced the Council Fund Revenue Budget 2018/19 – Third and Closing Stage report and explained the Council needed to set a balanced budget to meet its legal duty.

            It was the collective responsibility of the whole Council to set the budget on the advice of Cabinet and the options remaining to achieve a legal balanced budget were outlined in the report.  He explained that the scope for further service reductions for this financial year had been exhausted and portfolio resilience statements, which demonstrated the risks to service capacity and performance of any further budget reductions, had been accepted by the Overview and Scrutiny Committees and Cabinet.

Beyond a financial intervention by Welsh Government (WG), the only remaining options to balance the budget were Council Tax income and drawing upon reserves and balances.

The Corporate Finance Manager explained that the financial impact of both Stages One and Two were detailed in Table 3 in the report and having taken both into account, the remaining budget gap was £5.771m.

On reserves and balances, he said that compared to many other councils, Flintshire had modest and limited reserves to call upon.  In addition, reserves could only be used once and an over-reliance on their use to balance annual budgets was not a sustainable way of funding services.

The Council had limited un-earmarked reserves to draw upon with the Month 9 budget monitoring report projecting a Contingency Reserve at the end of March 2018 of £4.174m.  However, that was subject to change between now and the close of the financial year. 

The Council also held earmarked reserves which were set aside for specific purposes.  The month 9 budget monitoring report provided an update on current projected levels of earmarked reserves and showed that the amount was likely to reduce from £20 to £10m by the end of the financial year.  A review of the remaining earmarked reserves had been completed and only those which had a strong business case would be retained with the remainder being released for use as part of the Medium Term Financial Strategy (MTFS).  The total amount recommended to be released to assist with setting the budget for 2018/19was £1.927m.  It was the advice of the Corporate Finance Manager that with the use of the earmarked reserves and setting the Council Tax at 5%, a balanced budget could be set.  An illustration of the contribution to the budget from a range of Council Tax options was outlined in table 4 of the report.  A comparison of Council Tax levels across Wales was appended to the report.

Councillor Shotton commented on the number of years that had seen local government grants reduced which affected services, including Social Care and Education.  The challenge now was which options could be drawn upon for Members to balance the budget.  He welcomed the support that had been received from head teachers, governors and the community on the position for schools funding which was helping to raise public awareness of the situation.  On social care, the country was seeing an ageing population and increasing demand and complex cases in children’s services.  The budget for social care had risen from £62.4m to £65.8m for 2018/19 which was a rise of 5.4%.

He thanked the Overview and Scrutiny Committees for their input on the budget process which helped to inform the final report to County Council later that day.  Due to the enormity of the task of balancing the budget, it had been considered in three stages, details of which were outlined in the report.

He proposed the following recommendations:

·         That Cabinet recommend to Council that following a review, £1.927m of reserves and balances is released to contribute to balancing the budget;

·         That Cabinet recommend to Council that a 5% rise in Council Tax is set to balance the budget in combination with reserves and balances; and

·         That Cabinet recommend to Council that a further rise in Council Tax of 1.71% is set to provide additionality of £1.140m specifically for schools budgets.

The Chief Executive reiterated that the Council was not ‘reserve rich’ and that reserves would need to be held back for things such as the national pay award which was still under negotiation between local government employers and trade union representatives.  Due to those risks the Council would need to be prudent in drawing upon reserves to balance the 2018/19 budget.

In response to a question from Councillor Attridge, the Corporate Finance Manager provided details of the budget increase to schools in previous years which was: 2013/14 £1.021m (1.31%), 2014/15 £0.390m (0.49%), 2015/16 £0.478 (0.61%), 2016/17 £0.869m (1.06%) and 2017/18 £1.201m (1.39%).

Councillor Thomas commented on the impact austerity was having on front line services which resulted in a cumulative effect on residents.  She said devolving budgets and grants to local authorities earlier would provide time for councils to plan.

Councillor Shotton said a review of the Standard Spending Assessment (SSA) was overdue.  However, the Council had to try to balance its limited funding over a wide range of services, many of which were demand led and could be subject to significant variation.  An example of demand led mandatory services where the Council spent over its notional guidelines was Social Services.  By setting the Council Tax at an increase of 6.71% this would see the Council spending to SSA and should be recognised by WG.  On the Council Tax rise, the Chief Executive confirmed that WG had advised that councils had the local flexibility to set above the previous advisory cap of 5%.

Councillor Roberts thanked Councillor Shotton for the proposals put forward, saying that education was an investment in the future of the county with the additional £1.140m providing considerable relief to schools.  He added that to get to this position was a remarkable achievement and he paid tribute to everybody who had been involved in the process.  Councillor Jones also expressed her thanks, in particular for the increase in funding for Social Services.

In closing, the Chief Executive also paid tribute to the work carried out by the Overview and Scrutiny Committees in the budget process.  He added that the options for car parking charges was still under review but a proposed target income figure had been set in the Council Fund budget report.  He also said that the year in paragraph 3.19 should read 2018/19, not 2019/20, as a correction. 

RESOLVED:

            (a)       That Cabinet recommend to Council that following a review, £1.927m of

reserves and balances is released to contribute to balancing the budget;

(b)       That Cabinet recommend to Council that a 5% rise in Council Tax is set to balance the budget in combination with reserves and balances; and

(c)        That Cabinet recommend to Council that a further rise in Council Tax of 1.71% is set to provide additionality of £1.140m specifically for schools budgets.