Agenda item

(1) to provide an updated budget forecast for 2019/20 following recent announcements by Welsh Government and (2) to set out a suggested process for Stage 3 leading to the setting of a balanced budget in early 2019. (Please note that the Local Government Final Settlement is due to be announced on 19 December.)

That the only areas of concern that the Committee wishes Cabinet to review are Out of County Placements and Streetscene budgets.

The Chief Executive introduced an item to review the current budget position for 2019/20 following recent announcements by Welsh Government (WG) and the report to County Council on 11 December 2018, and in advance of the Local Government Final Settlement on 19 December.  In approaching Stage 3 of the process, this was an opportunity for the Committee to bring forward any further options to help bridge the remaining budget gap for 2019/20 for recommendation to Cabinet and prior to approval of the final budget by County Council in January 2019.  Following agreement of Stages 1 and 2 budget solutions, there were no remaining proposals to share with Members unless officers were commissioned to do so by Cabinet on the advice of the Corporate Resources Overview & Scrutiny Committee.

To assist, the presentation slides and information shared at the County Council meeting were re-circulated, highlighting the #BacktheAsk campaign for an improved Settlement.  In response to previous requests, briefing notes were shared on reserves and balances, and borrowing through the Corporate Loans and Investment Account (CLIA).

Councillor Jones referred to concerns amongst Members about the potential increase in Council Tax, and he highlighted Out of County Placements and Streetscene as two areas of continued overspend year on year.  He said there were certain issues affecting non-statutory services which had been set aside during the budget process as they were considered unacceptable at that stage.  In the absence of further solutions and a commitment by WG on consequential funding, he said that a steer was needed by the Council Administration on reviewing service options, in advance of the Final Settlement, to understand the implications and alternatives to a further rise in Council Tax.

The Chief Executive cited Streetscene as one of the highest efficiency-driven portfolios and the Council’s duty of care on Out of County Placements.  Whilst some services were statutory, there were also organisational risks on some non-statutory services.  Following consideration and risk assessment of all available safe options by Cabinet and Overview & Scrutiny during the budget process, any new proposals at this stage could only be considered if there was certainty on budget impact and delivery in accordance with due process.  Until there was clarity on the Final Settlement, the only available options to achieve a balanced budget - aside from an improved Settlement from WG - were an increase Council Tax, and limited use of reserves and balances on the professional advice of the Corporate Finance Manager in his capacity as the Section 151 Officer.

On Out of County Placements, the Corporate Finance Manager advised that there was a lower level of financial risk than at the budget-setting stage for 2018/19 as cost projections had been fully built into the forecast for 2019/20 based on current activity, notwithstanding the volatility of service demand.

Following a query by the Chairman, explanation was given on the repayment of long-term debts (some of which dated back to predecessor authorities) as reflected in Treasury Management reports.  The Chief Executive said that spend commitments on future capital programmes would reflect the benefits, value for money and the revenue saving to give assurance to Members.

On Councillor Jones’ comments, Councillor Shotton shared the concerns about the potential decision on Council Tax which would remain if there was no shift in the position from WG.  Resilience statements for all efficiency proposals across service areas had been considered by Overview & Scrutiny Committees resulting in mutual agreement that there were no new solutions to deliver efficiencies of the scale required.  Whilst some minor options had been identified in the report commissioned by the Council and Welsh Local Government Association (discussed at the October meeting), some would require development over time, for example Post-16 transport on which a report was due to be considered by Cabinet.  Councillor Shotton suggested that Members wait until the Final Settlement to consider the next steps as the only legal option remaining was an increase in Council Tax.

Councillor Jones said that in advance of the Final Settlement, a calculation was needed as a practical alternative to show the implications of further non-statutory options if Members chose not to support the Council Tax increase.

The Chief Executive spoke about the importance of allowing for sufficient time for due process as part of the budget-setting, involving democratic decisions by Members informed by the advice of officers.  In addition to highlighting the Council’s statutory duties, he gave examples of cost implications from introducing significant changes to non-statutory services.

The Chief Executive agreed to a request by Councillor Jones that a more detailed breakdown on Corporate and Central Finance be provided at the January meeting.

RESOLVED:

That the only areas of concern that the Committee wishes Cabinet to review are Out of County Placements and Streetscene budgets.