Issue - meetings

To consider a report by Councillor Gwyneth Ellis, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) setting out the implications of the Provisional Local Government Settlement 2024/25 and proposals to set a balanced budget for 2024/25.

RESOLVED that Cabinet –

(a)      notes the impact of the Provisional Settlement 2024/25;

(b)      supports the proposals outlined in Appendix 1 to the report, and detailed in Section 4 of the report, and recommends them to the full Council in order to set the budget for 2024/25;

(c)      recommends to Council the average Council Tax rise of 8.23% for council services plus an additional 1.11% for the increase in the levy to the North Wales Fire and Rescue Authority; this equates to an overall uplift of 9.34% proposed;

(d)      recommends to Council that authority is delegated to the Head of Finance and Audit in consultation with the Lead Member for Finance, to adjust the use of cash reserves included in the budget proposals by up to £500k if there is movement between the draft and final settlement figures in order to allow the setting of Council Tax in a timely manner;

(e)      supports the strategy for use of reserves as set out in paragraph 4.5 of the report and recommends to the full Council, and

(f)       confirms that it has read, understood and taken account of the Well-being Impact Assessment as set out in Section 7 of the report.

Councillor Gwyneth Ellis presented the report setting out the implications of Welsh Government’s Provisional Funding Settlement for Local Government 2024/25 and proposals to set a balanced budget for 2024/25, including the level of Council Tax.

The unprecedented financial challenges facing the council, along with all other local authorities, meant a different process to budget setting was required and it had been an extremely difficult and uncomfortable process.  Councillor Ellis thanked all involved in that process which had resulted in the submission of a balanced budget.

Councillor Ellis and the Head of Finance and Audit provided an overview of the budget process and latest financial position and elaborated on the proposals for consideration and recommendation to full Council in order to set the budget for 2024/25.  In brief, the provisional settlement had resulted in a cash increase of 3.6% (£6.720m) and following a council tax base adjustment was higher than the cash comparison at 3.7% (compared to the Welsh average of 3.1%) with a final settlement expected in early March. The settlement included all pay increases for teaching and non-teaching posts and responsibility to pay care workers the Real Living Wage.  Pressures amounting to £24.682m had been detailed and the provisional settlement generated £6.720m leaving a funding gap of £17.962m with proposals to bridge that gap identified in the report and further explained at the meeting.  A Council Tax rise of 8.23% plus an additional 1.11% (change to the indicative figure of 1.3% in the report) for the increase in the levy to North Wales Fire and Rescue Authority equating to an overall uplift of 9.34% was proposed to generate £7.580m additional revenue.  The proposed use of earmarked reserves was also highlighted to assist the budget setting.  The risks of not achieving a balanced budget had also been set out together with mitigation measures and further work required going forward.  The medium-term financial outlook looked equally as challenging.  Due to the lateness of the final settlement, it was recommended that authority be delegated to enable cash adjustments in the budget proposals of up to £500k.  It was important to note that if proposals in the report were not accepted, alternative proposals must be submitted so that the Council’s statutory responsibility to set a balanced budget could be met.

During debate Cabinet condemned the financial situation facing local government which meant severe cuts had to be made to vital services in order to set a balanced budget and called for improved and sustainable funding to deliver those services.  It was noted that recent calls had been made by MPs across the political spectrum for the UK Government to provide additional funding for local government.  Given the current financial context, Cabinet believed the budget proposals represented the best outcome to ensure social care services and school learners were protected as far as possible and to safeguard the most vulnerable in society.

Cabinet welcomed the higher than expected settlement from Welsh Government but noted it had been based on data which would result in higher demand for services and did not materially change the budgetary position given that service delivery in 2024/25 would cost an additional £24.682m compared to 2023/24, mainly due to inflationary pressures and major increase in demand from client services.  The risk that the demand for complex services would continue to increase with more demand for care services and more people facing homelessness was recognised.  Tribute was paid to the hard work in making savings to date, despite which, Heads of Service had been issued with a further savings target of £3m to make up the shortfall with proposals to members  ...  view the full minutes text for item 6