Agenda item

To consider a report by Councillor Julian Thompson-Hill, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) detailing the latest financial position and progress against the agreed budget strategy.

Vote taken: 8 in favour, 0 against, 0 abstentions

RESOLVED that Cabinet note the budgets set for 2020/21 and progress against the agreed budget strategy.

Councillor Julian Thompson-Hill presented the report detailing the latest financial position and progress against the agreed budget strategy as outlined below –

·        the net revenue budget for 2020/21 was £208.302m (£198.538m in 2019/20)

·        an overspend of £5.107m was forecast for service and corporate budgets (the overspend did not assume receipt of further ‘income loss’ grants or claims)

·        highlighted current risks and assumptions relating to individual service areas together with the financial impact of coronavirus and Leisure ADM budgets

·        detailed required savings and efficiencies of £4.448m agreed including corporate savings relating to triennial actuarial review of Clwyd Pension Fund (£2m); 1% schools savings (£0.692m); service savings (£1.756m)

·        provided a general update on the Capital Plan, Housing Revenue Account and Housing Capital Plan.

Councillor Thompson-Hill elaborated upon the latest financial position in detail, particularly with regard to the financial impact of Covid-19, including grant funding secured to date and the position on claims for the council.

The following issues were raised during the ensuing debate –

·        it was clarified that following a better than expected settlement from WG the reduction in school savings from 2% to 1% had been approved by Council in February 2020 in recognition of schools net deficit balances

·        the draft budget settlement would be issued in December with the final settlement to be announced in March 2021 but there had been no indication as to what it would entail.  Due to the late announcement few changes were expected from the draft settlement and it was likely that the council would need to set the budget before the final settlement was issued

·        no announcement had been made in terms of additional funding for local government with specific regard to the forthcoming lockdown period and it was assumed that claims for loss of income and additional costs incurred as a result would be claimed from the £264m fund previously announced by WG

·         Councillor Bobby Feeley felt that WG should provide specific funding for the leisure sector given that was a vital service in terms of health and wellbeing and continued to face an uncertain and difficult trading position.  It was noted that the claim for loss of income relating to Leisure for Quarter 1 had been paid and the claim for Quarter 2 was currently being prepared but uncertainty remained over Quarters 3 and 4.  The Leader reported upon regular meetings and positive discussion with WG who were aware of the pressures facing local government including leisure services.  However the growing financial pressures on WG may well pose a risk to local government, particularly in terms of future settlements

·         Councillor Mark Young queried how the financial deficit would be addressed if WG funding was not forthcoming and sought assurances that the council continued to work with businesses and residents in terms of business rates and council tax given the current financial challenges.  The Head of Finance reported that the council had been prudent with its reserves with earmarked reserves and a budget mitigation reserve which could be used if necessary and any recommendations in that regard would be brought before Cabinet.  He was confident the council would remain solvent for the current financial year but there were concerns regarding the next financial year onwards; the main uncertainty related to council tax and WG’s ability to fund local government at a level they would like given the financial impact of Covid-19. In terms of recovering council tax and business rates Councillor Thompson-Hill gave assurances that individuals were dealt with as sensitively as possible

·         Councillor Huw Hilditch-Roberts thanked the Leader for his statement to WG calling for urgent information ahead of the circuit breaker announcement, including a support package for businesses and furlough scheme, which he believed had an impact on the information shared by WG in their announcement and had been appreciated by businesses.  He felt the statement provided a real reflection of Denbighshire’s situation and hoped that in addition to support for those sectors closed during the lockdown, support would also be available for essential businesses that continued to trade but with significantly less income.  The Leader confirmed it was a significant issue that had been acknowledged by WG and it was hoped that they would be able to respond in financial terms

·         in response to questions from Councillor Emrys Wynne regarding the availability of information and guidance to businesses ahead of the lockdown Councillor Mark Young confirmed he was working with the Head of Planning and Public Protection to provide communications and press releases as the information became available.  Councillor Williams was also directed to the information currently available on the WG website which could also be accessed via a link on the council’s website and assurances were provided that information was shared with businesses and residents as it was received.  The importance of relevant, timely information and guidance was acknowledged and had instigated the Leader’s statement to WG ahead of the circuit breaker announcement

·         in response to questions from Councillor Meirick Davies it was confirmed that the pay award to staff was an average of 2.5% with larger increases for the lowest paid and the increase for councillors had been just over 1%.  With regard to the new Waste Service Model Councillor Brian Jones confirmed that the new vehicles would run on diesel however consideration had been given to future technologies on the site as they developed such as hydrogen.

RESOLVED that Cabinet note the budgets set for 2020/21 and progress against the agreed budget strategy.