Agenda item

(a)       That the recommendations of Cabinet, as detailed above, for balancing the budget for 2020/21 be approved; and

(b)       That the level of Council Tax for 2020/21  as recommended by Cabinet be approved.

The Chief Executive introduced a report to receive the recommendations from Cabinet  to Council to set a legal and balanced Council Fund Revenue Budget for 2020/21. He referred to the Budget Statement provided to Members which had been approved at the meeting of Cabinet held immediately prior to the meeting of the Council and set out the recommendations of Cabinet for balancing the budget for 2020/21. 

The Chief Executive, Corporate Finance Manager, and Revenues Manager, delivered a presentation which covered the following key areas: 

• setting a legal and balanced budget
• update on the financial forecast for 2020/21
• Budget solutions 2020/21
• reserves (unearmarked/earmarked)
• schools and social care budgets
• open risks
• Council Tax
• professional opinions and concluding remarks
• looking ahead and the Medium Term Financial Strategy (MTFS)

Councillor Ian Roberts thanked the Chief Executive and Officers for their presentation and work to set a balanced budget.  He also thanked Members for their engagement and collaboration to request, as a united Council through the Wlesh Local Government Association (WLGA), that the Welsh Government (WG)  sought solutions to the uncertainty of funding for local government and emphasised the need for stability. 

Councillor Roberts referred to the recent severe weather and took the opportunity to express thanks to the Chief Officer (Streetscene & Transportation) and the Streetscene services team for their preparatory work and commitment to deal with any matters of urgency arising.   Referring to the setting of Council Tax he  commented on the 0.25% increase in the levy of the North Wales Fire and Rescue Authority and, commenting on the range of services provided, said the Council had a duty to ensure resilience. 

Councillor Roberts referred to the savings achieved in the Clwyd Pension Fund through the reduction in employer contributions (Triennial Review) for Flintshire and the re-calculation of the in-year position on employer annual pension contributions, and thanked all those involved. 

In moving the Cabinet recommendations 1 to 8 to Council, as detailed in the Cabinet report which was appended to the report, Councillor Ian Roberts drew attention to recommendation 8: “That Cabinet calls on both Governments to commit to a three-year medium-term budget planning with local government settlements in Wales to be at a minimum level of 4% in each of those years, and for national pay awards and reforms and pension reforms and revaluations to be funding in full at a national level at source”.  

Councillor Roberts commented that the Council was mindful of the direct impact that  Council Tax had on people and was pleased that the Council Tax as recommended by Cabinet was 4.5%.  He said that whilst this would rise to 4.75% when the increase in the levy for the North Wales Fire and Rescue Authority was added it was still below the Council’s commitment to cap an annual rise in Council Tax to 5.0%.  Councillor Roberts stated that the average increase in Council Tax for a Band D household - once the Police precept and the precept for Town and Community Councils had been included - would be 4.68%. 

Councillor Roberts said that Council Tax was becoming unsustainable both in the medium and long term and should not be relied on by Governments to compensate for inadequate national funding settlements.  He referred to a Notice of Motion put forward by Councillor David Healey at a previous meeting of the Council which called for reform of the Council Tax system.   In conclusion Councillor Roberts reiterated his thanks to Officers and Members for their collaborative work to bring the Settlement forward.

Councillor Mike Peers seconded the proposal to accept recommendations 1 to 8 in the Cabinet report.  He spoke in support of the hard work undertaken to set a balanced budget for 2020/21 and said there was a need to continue to review expenditure in the current financial year whilst considering the risks and quality of services provided by the Council.  Councillor Peers continued that there was a need to ensure that the WG provided adequate funding to the Council and also fully funded public sector pay awards   He commented on the time and effort taken year on year to look for efficiencies to close a budget ‘gap’ due to inadequate funding from Governments.

Speaking in support of recommendations 1 to 8, Councillor Tony Sharps also said  that Flintshire and all other councils in Wales needed certainty on future budgets from National and Welsh Governments.  He expressed the view that there was a need to review the purpose of the WG and the way in which local governments were funded. 

Councillor Richard Jones commented on the unacceptable burden that rises in  Council Tax placed on local residents.  He said the WG was shifting the responsibility of funding local government onto local Council Tax and referred to data and figures to explain the shift from WG funding through taxation onto local council taxation. 

Councillor Billy Mullin paid tribute to Officers and Investment Managers of the Clwyd Pension Fund Committee for the overall improved position following the triennial  review, and said the reduction of 4% in employer contributions was equal to a reduction of £2.646M of contributions to the Council which had been used towards closing the budget gap   Councillor Mullin said this also secured the membership of Clwyd Pension Funds under the Local Government Pension Scheme.

Councillor Kevin Hughes spoke in support of the budget and urged the Leader of the Council, Chief Executive, and Group Leaders to continue to lobby the WG to ensure an improved settlement for Wales. 

Councillor Heesom supported the recommendations.  He expressed concerns around the level of deficit in secondary schools budgets and suggested that this be debated in a workshop.  The Chief Executive explained that a rolling programme of meetings was being undertaken with secondary schools in a licensed deficit position and there would be a clearer understanding in the coming months of the action to be taken for next year.   Councillor Ian Roberts acknowledged the concerns raised by Councillor Heesom regarding school funding and gave an assurance the issue would be addressed as policies were further developed for schools.

Councillor Derek Butler reiterated the views expressed by Members regarding the burden of increases in Council Tax on local residents, the inequality of the current local tax system, the need for pay awards to be fully funded by national government, and the need for a three-year forecast for public expenditure plans.

Councillor Paul Shotton drew attention to the ongoing achievements gained by the Council and referred to improvements in care home provision, social services, new council housing, the 21^st  Century Schools programme, and the homeless facility at Glan yr Afon in Queensferry.   He said there was a need for a fundamental review of the local government funding formula to be undertaken by WG and local government jointly.

Councillor David Healey supported the proposal and congratulated Officers on their achievement in setting a balanced budget against the most severe financial challenges in a decade.  He drew attention to the opinion of the Wales Audit Office which was that ‘The Council takes a high-risk approach to its financial strategy and is not prepared to compromise the range, quality, or safety of services’.   Councillor Healey praised the work of the cross-party working group for their work in lobbying for an improved settlement.  On the issue of Council Tax, Councillor Healey said  there was a universal feeling amongst local residents that the current system was not fair as it did not relate to the amount of income received in a household.  He suggested that the WG should consider a radical alternative to the current council tax system so that a different process could be implemented in Wales.

Councillor Ian Dunbar referred to the 0.25% charge on Council Tax in Flintshire for the North Wales Fire and Rescue Authority, and asked if the same levy was applied across other local authorities in Wales.  The Chief Executive explained that the annual levy was set by the North Wales Fire and Rescue Authority and was proportionate to the population across the region.  He confirmed that other authorities would also be applying their respective increase.    

Councillor Glyn Banks spoke of the importance in protecting front-line services and the achievement in setting a balanced budget.  He commented on the need for a funding ‘floor’ to be continued on principle and precedent and funded directly by the WG over and above the Settlement quantum.  It was proposed that the funding floor be set at 4%.

Councillor Ian Roberts proposed that the following further recommendation be added to the recommendations that had been put forward by Cabinet to Council: ‘That Council formally requests the Welsh Government to set a funding ‘floor’ at 4.0% as part of the Final Local Government Settlement 2020/21.  A ‘floor’ is justified by precedent and need.  A variation in the annual increases within the Settlement of 3.0% - 5.4% across Wales was unjustifiable with Flintshire again being penalised by the funding formula’.  Councillor Roberts said this would provide the Council with additional resources which could be put into balances.

The following recommendations were proposed by Councillor Ian Roberts and seconded by Councillor Mike Peers. 

(1)       That Council notes and accepts the revised budget forecast for 2020/21 (The forecast sets out the budget requirement for the financial year and the remaining budget gap to be closed at stage three);

(2)       That Council notes (1) that the revised forecast was based on a risk management strategy and (2) the ‘open risks’ which remain to be managed in the course of 2020/21;

(3)       That Council notes the analysis of the Provisional Local Government Budget Settlement, and the contribution the additional national funding will make to closing the remaining budget gap;

(4)       That Council approves the proposals from the completed work on corporate financing options to contribute to closing the remaining budget gap.

(5)       That Council approves a legal and balanced budget based on the calculations within the report and taking into full account (1) the contribution the additional national funding could make and (2) the proposals from the completed work on corporate financing options

(6)       That Council recommends the level of Council Tax for 2020/21 at 5% or below.

(7)       That Council notes the medium-term forecast as a basis for the next revision of the Medium Term Financial Strategy (MTFS).

(8)       That the Council calls upon both Governments to commit to three-year medium-term budget planning with local government settlements in Wales to be at a minimum level of 4% in each of those years, and for national pay awards and reforms and pension reforms and revaluations to be funded in full at a national level at source.

(9)       That Council formally requests the Welsh Government to set a funding ‘floor’ at 4.0% as part of the Final Local Government Settlement 2020/21.  A ‘floor’ is justified by precedent and need.  A variation in the annual increases within the Settlement of 3.0% - 5.4% across Wales was unjustifiable with Flintshire again being penalised by the funding formula.

When put to the vote the recommendations were carried.

RESOLVED:

(a)       That the recommendations of Cabinet, as detailed above, for balancing the budget for 2020/21 be approved; and

(b)       That the level of Council Tax for 2020/21  as recommended by Cabinet be approved.