Agenda item

That having considered the Cabinet report on the latest budget position, the comments raised by the Committee be noted.

The Chief Executive introduced a report on the latest position for the Council Fund Revenue Budget 2023/24 including an update on the key headlines and financial impacts of the Welsh Local Government Provisional Settlement and feedback from the recent Overview & Scrutiny meetings.  The update detailed changes and risks to the additional budget requirement for 2023/24 and work being undertaken on the solutions available to enable the Council to set a legal and balanced budget.

In highlighting the main areas of the report, the Corporate Finance Manager gave a reminder that in November 2022, the additional budget requirement for the 2023/24 financial year was estimated to be £32.448m.  Following a rigorous review by Overview & Scrutiny committees, all portfolio cost pressures had been accepted with no new cost reduction areas identified.  A summary of the main themes from those sessions was appended to the report.  The provisional Aggregate External Finance (AEF) for 2023/24 represented an increase of 8.4% which compared favourably with other Welsh authorities.  This reflected a cash uplift of £19.568m over the 2022/23 AEF of £232.179m however Flintshire’s funding allocation per capita remained ranked 20^th out of the 22 Welsh authorities.  An increase in the indicative all-Wales revenue allocation for 2024/25 equated to an increase of 3.1% in 2024/25 compared with the previous indicative increase of 2.4%.

Whilst the increased Settlement for 2023/24 was welcomed, this equated to around 60% of the Council’s estimated cost pressures identified.  In addition, the report detailed changes which increased the additional budget requirement to £32.978m along with a number of ongoing risks which could further impact the position.  As the Provisional Settlement was unlikely to change significantly, a combination of the remaining budget solutions would need to contribute to the remaining gap of £13.410m to enable a legal and balanced budget to be set.  Following review by Overview & Scrutiny committees, the portfolio cost reduction options totalling £6.166m would need to be considered to decide which would be taken forward as part of the final budget proposals.  Other budget considerations would include the impact of the reduction in Employers’ National Insurance, the outcome of the Triennial Actuarial Review of the Clwyd Pension Fund, delegated schools budgets and the level of Council Tax.

On reserves and balances, it was being recommended to Cabinet that the additional Revenue Support allocation of £2.4m received at the end of 2022/23 be transferred to the Contingency Reserve to enhance the level remaining and safeguard the Council against risks.

The Chairman referred to unresolved points raised by Overview & Scrutiny committees on the Housing and Environment portfolio options which were not included in the appendix.  The Corporate Finance Manager explained that the appendix summarised the main themes from the sessions with Cabinet Members in attendance and that feedback would be reported to Cabinet.

On the Overview & Scrutiny sessions, Councillor Bernie Attridge said that information requested on the homelessness service, currently being progressed by officers, would need to form part of the budget considerations.  He raised a number of queries on the content of the report.

The Chief Executive explained that increased expenditure for Parc Adfer was primarily due to haulage costs linked with rising fuel costs and that a response from the Chief Fire Officer on the North Wales Fire & Rescue levy was due the following week.  On homelessness, there was an increase in demand for temporary accommodation and it was unknown at this stage whether the level of grants available would be sufficient to mitigate pressures, however more clarity was likely in the coming weeks.

The Chief Officer (Streetscene & Transportation) advised that the Sustainable Waste Management Grant was currently under review by Welsh Government (WG) and could pose a potential risk, as reported to the Environment & Economy Overview & Scrutiny Committee.  On school transport, she explained that rising fuel costs together with increased demand in services for children with Additional Learning Needs and Pupil Referral Units had resulted in the cost pressure.  On projecting future costs, she explained the changing demand for those services, particularly over the Summer period.

In response to Councillor Attridge’s concerns, the Corporate Finance Manager advised that the final budget report would include the outcome of work on specific grants including which of those were confirmed.  He cited the Homelessness and Sustainable Waste Management Grants as the two most significant.

In highlighting risks such as the impact of inflation and funding of pay awards, Councillor Paul Johnson gave a reminder of the importance of maintaining an adequate level of reserves to safeguard against unforeseen events.

On the ongoing risks to the additional budget requirement, the Chairman said that assumptions on pay awards and Out of County Placements should be re-assessed to avoid reliance on reserves.  He said that sharing estimated costs for each of the remaining risks would assist with the budget-setting process.

In response, the Corporate Finance Manager explained that officers were currently working through the implications of these known ongoing risks and that they would not remain as risks if there was a budgetary impact for 2023/24 as the full-year effect would be shared at the final budget stage.

Councillor Ian Roberts spoke about the challenges involved in accurately projecting some costs due to changes in demand and gave assurance that officers were working through these.

The recommendation was moved and seconded by Councillors Bernie Attridge and Bill Crease.

RESOLVED:

That having considered the Cabinet report on the latest budget position, the comments raised by the Committee be noted.