Agenda item

That having considered the MTFS and Budget 2024/25 report, the concerns raised by the Committee be forwarded to Cabinet on 19 December 2023.

The Corporate Finance Manager presented an update on the additional budget requirement for 2024/25 and progress with potential budget solutions, prior to consideration by Cabinet.

Since the November meeting, the Chancellor’s Autumn Statement had been announced with key components relating to reductions in taxation affecting individuals and businesses, which meant there was unlikely to be any additional consequential funding for Local Government to improve the Provisional Settlement due from Welsh Government (WG) on 20 December.

A summary of changes to pressures since September had resulted in a revised additional budget requirement of £33.187m.  Funding solutions identified to date totalled £22.097m which left a remaining additional budget requirement of £11.090m to set a legal and balanced budget for 2024/25.  The report reflected a number of ongoing risks being closely monitored and other budget options still under consideration.  Further cost reductions were being urgently considered to meet the scale of the remaining shortfall.  The national picture showed that all local authorities in Wales were facing significant financial challenges of a similar scale.  Members would be briefed on the outcome of the Provisional Settlement prior to the Christmas break.

The Chair raised concerns about the scale of further budget reductions that portfolios were being asked to identify and said that the anticipated position and potential solutions should have been made clearer at an earlier stage, particularly given the level of challenge at previous meetings.  He went on to comment on the political leadership and questioned whether representations had been made to WG on pressures arising from continuing high demand for Additional Learning Needs and homelessness services.

In response to queries, the Corporate Finance Manager provided explanation on reduced efficiencies from the assets portfolio and said that the likely reduction in funding arising from the increase in WG Aggregate External Finance was based on initial information from the Distribution Sub Group and was subject to ongoing discussion.  Clarification was also given on Council Tax modelling and the prudent approach of the year 2 saving from the Actuarial Review.  On risks, it was explained that confirmation was awaited from WG on funding for the pressure around employer teacher pension contributions.

The Chief Executive advised that the strategic programme of transformation would create a sustainable budget position moving forward with workstreams focussing on protecting the Council’s financial position, particularly given the levels of available reserves.

Councillor Paul Johnson provided context on Flintshire’s financial position compared with other authorities and gave assurance that representations to WG were continuing.  He went on to speak about taking a measured approach taken on the budget process to work through the data available.

On the potential harmonisation of fostering fees, Councillor Alasdair Ibbotson asked whether the Council’s fees were lower than the proposed level and the Welsh average and if so, whether this impacted on Out of County pressures.  The Corporate Finance Manager agreed to obtain a response from the service.  In reply to further queries, he provided clarification on Council Tax calculations and Alternative Delivery Model inflationary pressures.  He also explained that the projected additional £0.500m investment return was based on the forecast of Arlingclose Ltd and agreed to share further detail on base rate assumptions used in calculations.

The Chief Executive provided explanation on the removal of the commercial waste cost pressure for 2024/25 and the need for greater focus on improving household waste recycling.

Councillor Bernie Attridge echoed concerns about portfolios being asked to identify further efficiencies at this stage and sought clarity on any additional options other than those already identified as ‘red’.  He raised concerns on a number of ongoing risks including homelessness and asked whether consideration had been given to bringing delegated school budgets under the Council’s control.

The Corporate Finance Manager said that the homelessness budget would be risk assessed on the level of mitigation required for 2024/25 and that school budgets would form part of final budget considerations.  He added that the risk around teachers’ pensions was pending discussions with WG and would consider whether to include as a risk at this stage.

In response to comments on the ongoing challenges with recruitment and retention, the Chief Executive said that the moratorium on non-essential spend was likely to result in a freeze on all vacancies in the New Year, apart from those supported by a robust business case and involving a higher degree of risk.

Councillor David Coggins Cogan echoed the concerns about further cuts to portfolio budgets and the time available to scrutinise options, commenting that efficiencies alone were unlikely to bridge the budget gap.  He went on to say that the potential waste recycling infraction fine was not a one-off risk if performance continued to fall short of targets in future years.

On the latter point, the Corporate Finance Manager spoke about the use of contingency reserves and further consideration on the ongoing position.  Work on final portfolio budget proposals would be shared with Overview & Scrutiny committees in January, prior to final budget-setting in February.

In response to similar concerns from Councillor Bill Crease about the time available to make informed decisions, Councillor Paul Johnson spoke about the speed of changes and the collective case with other authorities for a fairer funding solution.

Councillor Ibbotson reiterated the role of all elected Members in setting the budget.  As requested, officers agreed to provide a breakdown in response to questions relating to Council Tax calculations.

Officers noted the request by Councillor Sam Swash for Table 1 to include total budget lines in future reports, to assist Members in scrutinising changes.

On that basis, the recommendation was moved and seconded by Councillors Bernie Attridge and Allan Marshall.

RESOLVED:

That having considered the MTFS and Budget 2024/25 report, the concerns raised by the Committee be forwarded to Cabinet on 19 December 2023.