Agenda item

As detailed in the recommendations, with recommendations number 5 and 6 to be amended as:

(5)       That Cabinet recommends to Council a legal and balanced budget based on the calculations within this report and taking into full account (1) the contribution the additional national government funding will make (2) the Stage Three proposals for corporate financing solutions and (3) the expected uplift in the specific grant for social services of £0.426M;

(6)       That Cabinet recommends an annual increase in Council Tax of 4.5% for Council needs.  Once the levy of the North Wales Fire and Rescue Authority is added the full Council Tax increase will be 4.75%.

The Chief Executive introduced the Council Fund Revenue Budget 2020/21 Stage Three Post Settlement report which set out how the Council could achieve a legal and balanced budget for 2020/21 for stage three of the budget setting process.  The calculations were based on a maximum annual Council Tax rise of 5%.

            The forecast for 2020/21 had been revised to take into account those ‘open risks’ for which financial provision needed to be made for the budget to be prudent.  The work in hand on the remaining corporate financing options had since been completed and the outcomes were set out within the report.  The report also explained the remaining ‘open risks’ for 2020/21.  Copies of slides that would be presented to all Members at the meeting of County Council later that day were provided.

            The Corporate Finance Manager explained that the teacher pay awards were to be paid from the overall uplift in funding announced in the Provisional Settlement.  Therefore, provision for a 2% uplift had been included in the budget at an additional cost of £0.726M.  Additional pressures for Out of County Placements, the Coroner Service, and for the reduction in the Welsh Government Sustainable Waste Grant had been included together with an adjustment to the pressure for both the North Wales Fire and Rescue Levy.  The cost pressure for SEN of £0.400M was removed from the forecast pending further information on the specific Welsh Government Grant and would be considered as an open risk in 2020/21.  The adjustment to those pressures reduced the forecast gap from £15.629M which was reported to Council in December to £16.315M and he provided details of the budget solutions, as set out in the report, to close the gap.  These included employer pension contributions, social care commissioning, and single person discount – review of entitlement.  Having taken all of them into account, a gap of £0.246M remained.

            Councillor Roberts read out a statement on behalf of himself, the Cabinet Member for Finance, the Chief Executive and the Corporate Finance Manager:

“Cabinet is both pleased and relieved to be able to recommend to Council a legal and balanced Council Fund Revenue Budget for 2020/21. Faced with having to bridge another large budget gap, this year in the region of £16m, the budget-setting process has once again been a monumental task.

As our report sets out, we have a remaining budget gap of £0.246m to close against the revised budget forecast of £16.315m.

To close this remaining gap at Stage Three of budget-setting, and based on officer advice (as set out in 1.42 of the report), we are prepared to bring into play the expected uplift in the social services specific grant. We estimate that the uplift in this grant for Flintshire will be £0.426m. Based on the latest national advice we are confident that we should be able to allocate this grant against pre-planned expenditure for social care for 2020/21. We will use £0.246m of this grant to close the reported gap.

We gave a commitment to cap any annual rise in Council Tax to 5.0%. Given that we should have £0.180M of additional social services specific grant uplift still remaining, having balanced the budget, we plan to reduce the planned increase in Council Tax to 4.75%.

The real increase in Council Tax for actual Council expenditure will be 4.5%. Once the increase in the levy of the North Wales Fire and Rescue Authority of 0.25% is added to our figure - we have a total of 4.75%. On our Council Tax bills the Fire and Rescue Authority levy is not shown separately. It is important that the public understand that the increase they will see on their bill covers both.

For the Council Tax payer the ‘bottom line’ average increase for a Band D household – once the Police precept and the precept for the Town and Community Councils have been included – comes out at 4.68%. The Council’s share of this charge comes out at  £60.83 for the whole year, and £5.07 per month.

We do not set our Council Tax levels lightly. We would rather be setting a Council Tax nearer to CPI. However, the annual rise we are proposing is around the expected Welsh average, with some neighbours in North Wales having no choice but to set their Council Tax at a higher rate. Council Tax is becoming unsustainable and should not be relied upon by Governments to compensate for inadequate national funding settlements. Welsh Government itself has set a guideline figure for annual Council Tax rises across Wales of 7.1%. This is an admission by Welsh Government that its own funding is inadequate to meet need. By coming 2.35% under this guideline figure, Flintshire can demonstrate that it is shielding the Council Tax payer from unreasonable demands.

Although we are now in a position to balance our annual budget, something that seemed an improbability only four months ago, we are not in any way complacent. We will face a number of open risks in-year and, once again, will need to be prudent in managing our budgets tightly. Our reserves and balances are at their lowest ever level. It will be essential that we stabilise and then grow our reserves over the year to come.

Flintshire and all other councils in Wales now need certainty over future budgets from governments. We cannot go through this annual cycle of planning for the unknown – with all the worry and anxiety that this brings to so many people who depend on us.

We now call on the new UK Government to set out a three year forecast for public expenditure plans, to work with the devolved nations to mutually agree realistic growth plans for their devolved budgets, to prioritise finding a national solution to funding social care, and to set out a national strategy for funding public sector annual pay awards. We now expect annual uplifts in government funding from Welsh Government of a minimum 4%.

We support recommendations (1) to (8) in readiness for Council this afternoon, with the following amendments:-

Recommendation 5: ‘That Cabinet recommends to Council a legal and balanced budget based on the calculations within this report and taking into full account (1) the contribution the additional national government funding will make (2) the Stage Three proposals for corporate financing solutions and (3) the expected uplift in the specific grant for social services of £0.426M’.

Recommendation 6: ‘That Cabinet recommends an annual increase in Council Tax of 4.5% for Council needs. Once the levy of the North Wales Fire and Rescue Authority is added the full Council Tax increase will be 4.75%.’

            Councillor Thomas commented on the need for a three year funding programme as Council’s could not continue to operate and plan on a year by year basis.

            The Chief Executive said if a funding floor was introduced, this would equate to approximately £0.500M for Flintshire County Council and that would be put into reserves and balances to cover the risks identified.  He expressed his thanks to officers in Streetscene and Transportation and Housing for the work undertaken during the recent storms.

RESOLVED:

(a)       That 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) be noted and accepted;

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

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

(d)       That the proposals from the completed work on corporate financing options to contribute to closing the remaining budget gap be approved;

(e)       That Cabinet recommends to Council a legal and balanced budget based on the calculations within the report and taking into full account (1) the contribution the additional national government funding will make; (2) the Stage Three proposals for corporate financing solutions and (3) the expected uplift in the specific grant for Social Services of £0.426M;

(f)        That Cabinet recommends an annual increase in Council Tax of 4.5% for Council needs.  Once the levy of the North Wales Fire and Rescue Authority is added the full Council Tax increase will be 4.75%;

(g)       That the medium-term forecast as a basis for the next revision of the Medium Term Financial Strategy (MTFS) be noted; and

(h)       That the Council calls upon both Governments to commit to three-year medium-term.