Agenda item

To consider a report by the Head of Finance (copy attached) to provide an update of the budget process and the impact of the Local Government Settlement and to approve the budget for 2019/20, including the level of Council Tax.

 

The Lead Member for Finance, Performance and Strategic Assets, Councillor Julian Thompson-Hill, introduced the Budget 2019-20 – Final Proposals report (previously circulated).

 

The Council was legally required to set a balanced and deliverable budget before the start of each financial year and to set the resulting level of Council Tax to allow bills to be sent to residents.

 

The Final Local Government Settlement for 2019/20 had been received on 19 December 2018 and had resulted in a cash-flat funding position (the Welsh average being +0.2%).  The Provisional Settlement received in October 2018 indicated a reduction of -0.5% (Wales average -0.3%).  For the funding position to have been neutral in terms of minimum funding pressures in the Medium Term Financial Plan (MTFP), the Settlement would have had to have been closer to +5%.

 

The change between the two settlement figures reflected an additional £14.2million allocated to local government as part of the Welsh Government’s final budget proposals, as a consequence of the UK Government budget in November 2018 and a new responsibility, funded at £7million across Wales.  This was to provide for an increase in the capital limit for those paying for residential care to £50,000.  The allocation to Denbighshire was £250,000.

 

The final proposals to balance the 2019/20 budget were shown in the extract from the Council’s Medium Term Financial Plan in Appendix 1 to the report.  The main points were as follows:

·       Cash flat Settlement

·       Pay, pension and National Living Wage pressures are funded (£1.9million)

·       Price and energy inflation (£250,000)

·       Fire Service Levy (£237,000)

·       Allowances for increases to the Council Tax Reduction Scheme costs, reduction in DWP Administration Grant and central contingencies (£537,000).

 

In addition, the council continued to support schools by funding pay, related inflation and movement in pupil numbers.  This amounted to £3.7million (5.4% in total) in 2019/20.

 

The proposed budget also recognised pressures in other priority areas, and in order to fund the pressures identified, savings of £5.7million had to be identified.  These were made up of:

·       Corporate savings identified in 2018/19 (£0.5million)

·       Service efficiency savings (£1.3million)

·       Service savings (£2.6million), and

·       Schools savings of 2% (£1.3million).

 

A new budget process for 2019/20 had been established with the creation of a strategic Council Board which comprised of members of CET, the Leader of the Council and the Lead Member for Finance, Performance and Strategic Assets.  The Board was also advised by officers from Finance, HR and Communications.

 

Service budgets were scrutinised by the Board and services were required to model a range of savings options.  The Board assessed these and directed services to progress proposals in line with strategic priorities.

 

Details of all saving proposals had been circulated to elected members in December 2018.

 

The council’s MTFP assumptions were regularly reviewed and cost pressures reassessed.

 

It was unsustainable to manage the pressures without permanently increasing the council’s funding base.  As the financial support from the Welsh Government reduced annually, in real terms, the burden had to be met locally.  Therefore, a higher than originally planned Council Tax rise had been proposed.

 

The rise in Council Tax by 6.35% would raise an additional £797,000 compared to the rise applied in 2018/19, to be used as part of the overall package which included an additional allocation to social care of £2.0million.

 

The budget proposals continued to include an element of cash funding to support the overall position.  The Lead Member stated that this was never an ideal position and reflected the ongoing financially difficult position the Council faced. 

 

During discussions, the following items were raised:

·       It was confirmed that grant funding could be available in the future for music provision in schools following the removal of the subsidy.

·       Councillor Swingler, a member of Plaid Group thanked the Head of Finance for attending their Group to explain about the budget process.  He then expressed his disagreement to the rise in Council Tax stating this would put additional financial pressures on the working poor.  He also stated that services had been cut in both the Homeless Prevention Team and the Citizens Advice Bureau (CAB).  Councillor Julian Thompson-Hill confirmed that there had not been cuts but a reorganisation of the Homeless Prevention team.  The CAB contract had not been cut either, but they now had a longer contract.  Councillor Bobby Feeley reiterated there were no cuts within the Homeless Prevention Team and Welsh Government were to add £100million into homeless prevention services.

·       Schools to find 2% cuts was raised as a potential major issue.  It was confirmed that school Governing Bodies would deal with the 2% cuts.  A rigorous process was in place to assist delivery of the savings.  The savings should be within the schools three year projections.

·       It was suggested that a briefing take place from Children’s Services as to how they utilise their budget.  A briefing of this type had taken place in previous years and it had proved extremely informative for members.

·       It was confirmed that the school transport policy had previously been approved by councillors.  School transport was a statutory service and Denbighshire ensured that the service ran efficiently.

·       With regards to the question of transparency of the budget information, it was confirmed that an open invitation had been sent out for members to speak to officers regarding the budget process.  Also, the budget book had been distributed to members for their information on at least two occasions to keep them fully informed.

 

The Leader explained he had met with the First Minister and had requested a three year plan, to assist in the delivery of the budget.  He assured members that everything possible had been done to provide value for money within the budget.

 

Members and the Chief Executive thanked the Lead Member and all officers for their work on delivery of a very difficult budget.

 

RESOLVED that Council:

(i)              Notes the impact of the Local Government Settlement 2019/20

(ii)             Approves the budget as outlined in Appendix 1, which is in line with the proposals presented at the member budget workshop held on 11 January 2019

(iii)            Approves the average Council Tax rise of 6.35%, which recognises a range of significant pressures, including the increasing cost pressures in adults and children’s social care and supports the allocation of £2.0 million of additional funding to across the two services

(iv)           Confirms that it has read, understood and taken account of the Well-being Impact Assessment submitted as part of the report.