Agenda item

To consider a report by Councillor Julian Thompson-Hill, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) setting out the implications of the Local Government Settlement 2019/20 and proposals to finalise the budget for 2019/20.

RESOLVED that Cabinet –

(a)       notes the impact of the Local Government Settlement 2019/20;

(b)       supports the proposals outlined in Appendix 1 to the report which were in line with the proposals presented at the members budget workshop held on 11 January 2019, and accordingly recommends them to the full Council in order to finalise the 2019/20 budget;

(c)        approves the savings totalling £223k listed in Appendix 2 as part of the budget package;

(d)       recommends to Council 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 £2.0m of additional funding across the two services, and

(e)       confirms that it has read, understood and taken account of the Well-being Impact Assessments submitted as part of the report.

Councillor Julian Thompson-Hill presented the report setting out the implications of the Local Government Settlement 2019/20 and proposals to finalise the budget for 2019/20, including the level of Council Tax.

Councillor Thompson-Hill provided an overview of the budget process and latest budget position and elaborated upon the proposals for consideration and recommendation to full Council in order to set the budget for 2019/20.  The final settlement had resulted in a cash-flat funding position but for the funding position to have remained neutral in terms of minimum funding pressures the settlement would have needed to be closer to +5%.  Pressures included pay, pension, National Living Wage, price/energy inflation, fire service levy, allowances for increases to the Council Tax reduction scheme, reduction in DWP Administration Grant and central contingencies.  Local budget pressures in priority areas had also been recognised including social care, schools and transport.  A 6.35% rise in Council Tax had been proposed to raise an additional £797k compared to the Council Tax rise in 2018/19, to be used as part of the overall package to address the budget deficit – this included an additional £2m to social care.

The Chief Executive thanked Cabinet members and officers for putting the package of savings together which protected frontline services as far as possible whilst also recognising demand pressures.  The package had been achieved by focusing on efficiencies and developing alternative delivery models.  It was acknowledged that difficult choices had been made, including around the level of Council Tax, and it was also recognised that future years would likely be equally challenging.

During consideration of the report Cabinet members discussed the proposals at length and, along with officers, also responded to various questions which related to specific areas within their portfolios covering a wide range of different issues.

Main areas of debate focused on the following –

·        the rationale behind the proportion of proposed additional funding allocation to Community Support Services (CSS) and Children and Education Services (CES) was discussed given the differential in the base budgets.  It was noted that funding proposals had been based on demand projections for the individual services in order to appropriately address the immediate issues in each service area.  The strategy for dealing with CSS also included the use of a specific reserve to manage the pressure and the likely availability of additional grant support for 2019/20 had also been considered.  CSS and CES were both statutory services but whereas the majority of services for adults could be delivered within the county, the needs for some children had to be met outside of the county in specialist provision at a significant cost.  An additional £750k had been allocated to CES in the last financial year and an additional £1.5m was proposed for 2019/20 – it was hoped that the approach to raise the base budget would address the issue long-term

·        the Council continued to support schools by funding pay and related inflation and movement in pupils numbers.  Schools had been asked to identify savings of 2% and although difficult, a positive response had been received from head teachers via the Schools Budget Forum and there was confidence that the savings would be achieved.  It was up to individual schools to assess the impact of the savings and implement them which would be different in every school

·        in terms of the proposed £23k saving relating to the running costs of Denbigh Town Hall it was clarified that the building had been considered for disposal because it was surplus to the Council’s requirements.  Given that it was an important asset for Denbigh and that Denbigh Town Council operated from there, the Town Council had been approached and confirmed they would be interested in taking on the freehold subject to its affordability and investigations were currently ongoing in that regard.  As an interim measure the Town Council had agreed to contribute to the running costs on a pro rata basis pending a decision.  On that basis the proposal to save £23k was achievable in 2019/20 and was not reliant on the Town Council’s decision to take the freehold.  If the Town Council did not take on the freehold then the Council would consider other options for the building.  Councillor Glenn Swingler raised concerns over the possibility of losing an important community asset for the sake of £23k, particularly when investment was being made in similar facilities elsewhere in the county.  In response reference was made to the transfer of Llangollen Town Hall to Llangollen Town Council under similar circumstances and to the investment in Denbigh’s library and leisure centre

·        concerns were expressed regarding uncertainty over the availability and amount of future grant funding which created difficulties for future financial planning and budget setting.  In terms of the position for the next financial year the level of reductions seen in previous years was not expected and additional capital grant funding was expected for highway maintenance and also additional revenue grants for social care.  However the consensus from local government was that it would better aid financial planning if more grant funding was available on a permanent unhypothecated basis to enable spend to be determined locally

·        Councillor Meirick Davies advised that the full Fire Service Levy (£237k) had been identified as a pressure and the money provided by Welsh Government in the financial settlement towards that levy had not been taken into account.  It was explained that whilst an element of funding for the Fire Service Levy was included in the overall level of settlement there was nothing specifically passported to fund an increase in the fire precept of this scale, consequently the additional cost of the precept had to fall as a pressure to be funded locally.  It was highlighted that the Fire level element of the settlement had increased by a much lower percentage than the amount of the levy charged

·        with regard to the proposed £200k reduction in the revenue budget for Streetscene the intention was to mitigate the impact by replacing some of that element with a budgeted capital allocation to support highway maintenance work which would also provide greater surety for the service and confirmation was awaited on the potential for additional grant funding for highways

·        the Head of Finance/S.151 Officer agreed to provide written responses to questions raised from Councillor Meirick Davies regarding Council Tax on empty properties and Councillor Gwyneth Kensler regarding the percentage increase in the different energy costs.

Cabinet noted the challenging settlement received from Welsh Government and the acute pressures facing the authority.  It was accepted that a higher Council Tax increase would be required to deliver funding for all the pressures identified and continue with an effective and reasonable level of service to residents.

RESOLVED that Cabinet –

(a)       notes the impact of the Local Government Settlement 2019/20;

(b)       supports the proposals outlined in Appendix 1 to the report which were in line with the proposals presented at the members budget workshop held on 11 January 2019, and accordingly recommends them to the full Council in order to finalise the 2019/20 budget;

(c)        approves the savings totalling £223k listed in Appendix 2 as part of the budget package;

(d)       recommends to Council 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 £2.0m of additional funding across the two services, and

(e)       confirms that it has read, understood and taken account of the Well-being Impact Assessments submitted as part of the report.