Provisional Local Government Settlement
As detailed in the recommendations.
The Corporate Finance Manager provided details of the Provisional Welsh Local Government Settlement 2015/16 which had been announced by Welsh Government (WG) on 8 October. The consultation period was open until 19 November 2014. At this stage, the figures were provisional only with the final Settlement expected on 10 December 2014.
Flintshire’s Standard Spending Assessment (SSA) had decreased by 1.5% over 2014/15 to £251.255m, which equated to a reduction of £3.886m. The Council’s allocation of Aggregate External Finance (AEF) had decreased by 3.4% for 2015/16 which was the same average decrease across Wales.
The report provided details of the damping mechanism (floors), transfers into the settlement and transfers out of the settlement.
As in previous years the Settlement included protection for Education funding equivalent to 1% above the uplift for the WG’s revenue funding allocation from the UK Government which equated to 0.6%. An additional £10m across Wales had been included in relation to Social Care services.
The Settlement did not provide full details on specific grants although the following points were made:
· Eleven Education grants had been amalgamated into one Education Improvement Grant for schools which appeared to be a reduction in overall funding of between 10% - 15%.
· There were notable reductions in relation to Supporting People Grant (7.5%) and the Sustainable Waste Management Grant (3%)
· Some grants had increased – Pupil Deprivation Grant (15.2%, Flying Start (10.1%) and the Substance Misuse Action Fund (21.2%)
· Twelve grants were still to be announced (totalling £160m for 2014/15) most notably the post 16 provision in Schools grant
Within the Medium Term Financial Plan (MTFP), the Council had been planning for a reduction in AEF in the range of 1.5% - 4.5% for 2015/16, which equated to a budget gap in the range of £12m - £18m. The reduction of 3.4% for Flintshire equated to a revised budget gap of £16.4m.
Member workshops were being arranged to share the details on the proposals and to discuss a budget strategy for dealing with the significant shortfall.
The Leader and Cabinet Member for Finance said the authority was in an unprecedented situation with the severe reductions it faced, with such cuts never been encountered before. He raised his grave concerns for the future of services provided by the Council following the austerity measures for the next financial year.
Although future Settlement figures had not been provided, the Leader said if the current financial trajectory continued, a reduction figure of £50m for the next three years could be faced.
Whilst he respected the decision of Wrexham County Borough Council not to enter into an early voluntary merger following the Public Services Commission, he hoped they would enter into discussions with Flintshire on the possibility of shared services in the interests of residents in Flintshire and Wrexham.
Cabinet Members concurred with the views of the Leader.
(a) That the details of the Provisional Settlement be noted; and
(b) That the impact on the 2015/16 budget, current position and plans for Member engagement be noted.