Agenda item

(a)       That having considered the Medium Term Financial Strategy and Budget 2024/25 report, the concerns raised by the Committee to be reported to Cabinet on 16 January 2024; and

(b)       That an urgent invitation be extended to the local Constituency and Regional Members of Welsh Government and the two local Members of Parliament to attend a meeting with all elected Council Members to discuss the concerns on the Provisional Settlement.

The Corporate Finance Manager presented a report on the key headlines and financial impacts of the Welsh Local Government Provisional Settlement (LGPS) together with an update on the range of budget solutions available to the Council to set a legal and balanced budget in February.

At the previous meeting, the additional budget requirement for the 2024/25 financial year was reported at £33.187m with potential funding solutions of £22.097m leaving a remaining amount of £11.090m.  The Welsh LGPS was announced in December and responses to the consultation were invited by 2 February.  The provisional Aggregate External Finance (AEF) reflected an increase of 2.2% which was the third lowest percentage increase in Wales and was below the 3.1% all Wales average.  The report summarised the key headlines which had the effect of increasing the budget gap to £12.946m noting that there were a number of risks and impacts of specific grant reductions remaining which could further increase this figure.  Two budget workshops would be held later in the month prior to detailed final budget proposals being considered by Overview & Scrutiny committees in February.

The Chair asked about the impact of reductions in the Social Care Workforce Grant and Homelessness No One Left Out Approach Grant.  The Corporate Finance Manager estimated the impact of the first grant to be around £0.430m and agreed to share calculations for both grants and how they would be accommodated within the budget.

In sharing disappointment on the outcome of the LGPS, Councillor Bernie Attridge said that actions to share budget options to close the gap and lobby Welsh Government (WG) for an improved settlement were urgently needed.

Councillor Ian Roberts said that the joint press statement issued prior to Christmas had made clear the concerns about the Settlement.  He gave assurance that robust representations had been made at regional and national meetings for a review of the funding formula, however it was apparent that the NHS and Transport for Wales were the main beneficiaries of national funding.  Whilst representations continued, he said that the Committee may wish to consider sending an urgent letter/email to Senedd Members conveying its dissatisfaction over the impact of the funding formula.  He also suggested that the Constituency and Regional Members of the Senedd be invited to a meeting with all elected Members at County Hall.

The suggestion for a meeting with Senedd Members was proposed by Councillor Attridge.

Councillor Alasdair Ibbotson pointed out that a change in the needs-based funding formula in the time available was unlikely.  He said that the provisional Standard Spending Assessment (SSA) reflected a presumed 6.8% average increase in Council Tax across Wales and that the Council should focus on working with other councils to challenge that presumption and to seek an uplift in the AEF from WG.

Councillor Dave Healey spoke about the impact of austerity on the Council which continued to be one of the lowest funded councils in Wales and the need for a fairer funding formula.

In response to a question from Councillor David Coggins Cogan, the Corporate Finance Manager said that the indicative uplift advised by WG as part of the 2022/23 settlement was a reasonable working assumption and that changes in data sets in the formula had also impacted adversely on Flintshire.  In responding to queries, he advised that whilst the additional cost of employer teacher pensions had been confirmed in the Minister’s Autumn Statement, formal confirmation of that funding was still awaited.  On Out of County Placements, the additional amount included in the current forecast would be closely monitored so that the full-year impact could inform budget proposals to be shared in the next stage of the process.  On Social Care commissioning costs, comparison with other North Wales councils was difficult due to the various types of care involved.

On the latter point, the Chief Executive referred to the Council’s strategy to extend its care provision in Flintshire to reduce reliance on escalating costs by external providers.

In response to comments from the Chair on the adverse impact of revised data sets on the funding for Flintshire, the Chief Executive advised that the Council’s response to the LGPS consultation would also reflect the need for more consistent reporting of PLASC^[1] data across Wales along with care home fee capping.

Following a question from Councillor Attridge regarding withdrawal from the Welsh Local Government Association (WLGA), Councillor Roberts spoke about the various implications which would require careful consideration.  He went on to refer to the effects of consequential funding decisions and the timing of changes to data sets.

The Chair provided context of the impact of the continued reduction in AEF on Council Tax along with the rising cost of discretionary services.

In referring to the challenges around the financial situation, Councillor Gina Maddison called upon all Members to support the fair funding working group in the development of an action plan.

Councillor Paul Johnson spoke about changing financial trends across Wales and said that progress by the fair funding working group could be shared with this Committee.

Councillor Andrew Parkhurst said it was important to clearly set out the Council’s business case to demonstrate the unfairness of the LGPS for Flintshire.

Following the debate, the recommendations were moved and seconded by the Chair and Councillor Bernie Attridge.

RESOLVED:

(a)       That having considered the Medium Term Financial Strategy and Budget 2024/25 report, the concerns raised by the Committee to be reported to Cabinet on 16 January 2024; and

(b)       That an urgent invitation be extended to the local Constituency and Regional Members of Welsh Government and the two local Members of Parliament to attend a meeting with all elected Council Members to discuss the concerns on the Provisional Settlement.