Agenda item

National Budgets Update; Implications and Updated Local Forecast

Decision:

(a) That the Committee supports the Stages 1 and 2 budget proposals as detailed in agenda items 6-9 for recommendation to Cabinet and Council;

(b) That the Committee notes the recommendations from the five other Overview & Scrutiny committees;

(d) That the Committee accepts that the questions on transport costs will need to be addressed outside of the meeting before a response can be made, and notes that further work will be done on transport anomalies to establish whether the efficiency amount can be improved.

Minutes:

(ii) BUDGET 2019/20 - STAGE 1 PROPOSALS - CORPORATE FINANCE

(iii) BUDGET 2019/20 - STAGE 2 PROPOSALS - ALL PORTFOLIOS

(iv) BUDGET 2019/20 - STAGE 2 PROPOSALS - CORPORATE SERVICES

The Chief Executive and Corporate Finance Manager gave a joint presentation on the staged annual budget process which covered the following:

· Introduction and purpose of budget reports

· Stage 1 of 2019/20 Budget

o Corporate budget solutions

· Stage 2 of 2019/20 Budget

o Summary of portfolio business plan proposals

o Corporate Services business plan proposals

· Update on national budget position

· Chancellor’s UK Budget Statement

· Updated local budget forecast 2019/20

· Strategic choices and options

o Summary of Welsh budget position

o Workforce sessions feedback

o #BacktheAsk - campaigning position and public debate

o #OurDay 20 November

· Next steps and timelines

Stage 1, which had been concluded, comprised solutions for corporate finance and the costs of the whole of the organisation as detailed in the report. Built into the £7.937m total was a minimum Council Tax rise of 4.5% which at this stage was for illustrative purposes only, net of the Council Tax Reduction Scheme. The reductions for Alternative Delivery Model (ADM) subsidies had been built into the business plans of those organisations. Supporting method statements were shared for each proposal, with the exception of the reduction in corporate management posts and new income streams where work was ongoing, and the transport anomalies review which reflected the outcomes of previous decisions on transport entitlement.

Stage 2 proposals comprised the resolutions from each of the Overview & Scrutiny committees reviewing their respective portfolios. These cost pressures, investments and efficiencies were to be recommended for adoption without exception. With income and workforce/targeted post reduction cost efficiencies accounted for elsewhere in the strategy, the total business plan portfolio efficiency proposals would contribute £0.630m to the projected budget gap. This included a total of £0.360m for Corporate Services for which the Chief Executive and Chief Officer (Governance) summarised their respective areas.

It was explained that any feedback from the Committee would be passed to Cabinet in considering the adoption of proposals for Stages 1 and 2, prior to submission to County Council.

During an update on the national budget position from the Chief Executive, Members were reminded that the Provisional Local Government Settlement indicated a 1% reduction in Aggregate External Finance (AEF) for Flintshire which equated to £1.897m when adjusted for transfers towards the national teachers’ pay award and increased demand for free school meals.

Since the projected £13.7m budget gap reported in September, a number of changes to pressures and additional pressures had resulted in a revised budget gap of £13.9m. The impact of the cash reduction in AEF and implementation of Stage 1 and 2 proposals would leave a projected budget gap of £6.7m for 2019/20.

The Chief Executive advised that all Overview & Scrutiny committees had agreed that there was no scope for further major efficiencies beyond those already identified. The only options for addressing the remaining budget gap were changes in Welsh Government (WG) funding and Council Tax setting. Feedback from two workforce sessions reinforced concerns about the extent and impact of the austerity measures.

Representations had been made through the Welsh Local Government Association (WLGA) on the inadequacy of the Provisional Local Government Settlement, particularly for Flintshire as one of those at the bottom of the Welsh funding table. At the forthcoming Council meeting, Members would be asked to support the launch of the #BacktheAsk campaign which consisted of a series of ‘asks’ to achieve fairer funding for councils in Wales. Even if met in full, the options (worth around £5.6m for Flintshire) could still result in a Council Tax increase of 7% - but would offset the need to introduce a much higher rise.

Councillor Shotton said that these ‘asks’ were mirrored by those being sought by the WLGA, including the need for flexibility on the additional funding for education and social care to help meet critical pressures and the new unallocated ‘consequential’ funding to be prioritised for councils. Whilst negotiations were continuing, support for the ‘BacktheAsk campaign was required to influence the Final Local Government Settlement due on 19 December.

During the meeting, the Chief Executive received confirmation that funding from the UK Government to meet the teachers’ pay award for 2019/20 would be included in the Settlement, whilst the additional amount for the current year would be distributed as a specific grant.

Councillor Woolley proposed that the Committee fully supported the #BacktheAsk campaign. This was welcomed by the Chief Executive who said that further campaign information would be publicised.

Councillor Jones said that the indicative figure for Council Tax was a first for the Council and demonstrated the scale of the financial challenge. The Chief Executive gave a reminder that the WG Council Tax cap had been lifted and that the potential 7% quoted in the presentation included the 4.5% within the budget and was dependent on variables in the absence of no other solutions. An indicative annual increase of 3% had been set by the Council in the previous year. An illustrative 4.5% rise was shown on a similar principle noting that the financial challenges were much greater than previous years. In response to comments on the ratio of employees to spend, it was explained that the figures quoted in the earlier informal peer review report were not based on current data and were prior to the transfer of certain services to ADMs.

Councillor Shotton said that all of the ‘asks’ were reasonable and achievable. He welcomed signs of some positive movement in response to collective strong campaigning and spoke about the potential for discussions on the use of reserves and capital to help alleviate revenue pressures.

Officers provided clarification on efficiency figures for the Council Tax increase, corporate cost pressure reductions and portfolio pressures and investments. During discussion, the Chief Executive said that an information session on understanding pension funding might assist Members. Following queries on transport cost efficiencies, officers agreed to provide responses on the total figure of £183K, the value of estimated fare revenue retained by operators and the viability of Option 2.

The Democratic Services Manager summarised the outcome of the debate in a series of resolutions which were agreed by the Committee.

RESOLVED:

(a) That the Committee supports the Stages 1 and 2 budget proposals as detailed in agenda items 6-9 for recommendation to Cabinet and Council;

(b) That the Committee notes the recommendations from the five other Overview & Scrutiny committees;