Agenda item

To consider a report by the Head of Finance and Property (copy attached) to provide an update of the budget process and the impact of the Local Government Settlement and to approve the budget for 2020/21, including the level of Council Tax.

 

The Lead Member for Finance, Performance and Strategic Assets, Councillor Julian Thompson-Hill, introduced the Budget 2020/21 – Final Proposal 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 Draft Local Government Settlement for 2020/21 had been received on 16 December 2019 and resulted in a positive settlement of +4.3%, which was also the Welsh average position.  The Final Settlement was expected on 25 February 2020 but Welsh Government had indicated there should be very few changes.

 

As part of the settlement there were “transfers in” of £1.794m mainly relating to grant transfers for part year for Teachers Pay and Teachers Pension Grant.  The full year effect of the grants need to be funded from the general settlement.

 

The final proposals to balance the 202/21 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:

·         Pay pressures of £1.124m

·         Price and energy inflation of £250k

·         Fire Service levy of £93k

·         Allowance for increase in Council Tax Reduction Scheme of £350k

·         Schools inflationary pressures recognised amounting to £2.852m

·         Schools demographic pressure of £716k

·         £2.6m to recognise demand pressures and forecasts in Community Support Services as part of the council’s long term strategy to manage care budgets

·         £1.546m recognised existing pressures in Education and Children’s Services relating to Out of County Placements and Recoupment

·         £1.4m pressures in Waste Services had been recognised based on in year pressures

·         A further £600k pressure recognised relating to School Transport

·         £529k pressure had been included to fund Corporate Plan Priorities

·         In light of the scale of pressures a contingency of £358k had been included.

 

The impact of using £2m of cash in 2019/2020 (which had the effect of just delaying the need to identify savings) meant that the total shortfall amounted to £14.418m.

 

The +4.3% settlement generated £6.219m additional revenue, leaving a funding gap of £8.199m.  To bridge the gap, the following items had been included in the proposals:

·         £2m savings had been included due to the triennial actuarial review of the Clwyd Pension Fund

·         Service saving proposals which had been intensely scrutinised by the Budget Board had been circulated to elected members in December 2019.  All proposals would require delegated decisions, either to heads of service or lead members and, therefore, no specific Cabinet or Council decisions were required.  The proposals contribute £1.756m in total

·         School had been requested to find 1% efficiency savings - £692k.

·         £685k of the cash, which had already been earmarked to help smooth the budget reductions, be used for 2020/2021.  The original figure had been £1.085m

·         Council Tax increase by 4.3% which would generate £2.298m additional revenue

·         The Council Tax Base had increased more than expected which meant that additional Council Tax of £486k was projected.  The Base also impacted on the Revenue Support Grant and this had benefitted the council by £282k

 

In addition, the reduction in the requirement for cash would result in £400k remaining in the Budget Mitigation Reserve which was recommended to be released to help fund the initial stages of the Zero Carbon Target project and the pressures relating to Ash die-back (proposal to allocate £200k to each project).  This funding would allow the projects to produce detailed spending plans which could be considered and incorporated in next year’s budget considerations.

 

Councillor Graham Timms expressed his disagreement to the reduction of council tax from 4.8% to 4.3% and proposed an amendment to recommendation 3.3 as follows:

 

3.3 that Council approve the average Council Tax rise of 4.8% proposed and the extra revenue used to support council work on climate change and ecological emergency.

 

Councillor Timms explained that the amended proposal would increase council tax by £6.64 per year on an average band D house.  Councillor Brian Blakeley seconded the amendment.

 

Discussions took place and the following points were raised:

·         The amendment would affect those working families who were already struggling financially.  25% of residents were in receipt of the council tax reduction scheme.

·         The Welsh Government (WG) needed to provide funding for the Climate Change Scheme.  WG had awarded £21m to Cardiff for clean air and it was the consensus of opinion that funding should be given in North Wales.

·         It was confirmed WG and the UK Government would provide funding, but currently it was not clear what the funding would be.

·         It was stated that the WG priority would be the NHS.

·         Plans were required for 5-10 years’ time to allow people’s habits and practices to change.  Education was important to enable younger people to be more aware of the implications of climate change.

 

The Chief Executive clarified that the Welsh Government Local Framework was expected in March 2020, but would come with additional costs.  A scoping action plan was to be agreed, and work was taking place regionally through the Public Services Board (PSB).  Therefore, there was an expectation for the WG to have a fully costed plan to deliver significant costs.

 

Councillor Graham Timms expressed the urgency to make changes immediately as the council only had 10 years until the 2030 deadline.

 

A vote on the proposed amendment was to take place and Councillor Graham Timms requested a recorded vote.  As required, more than one sixth of those present supported a recorded vote.

 

The recorded vote was as follows:

 

In favour of proposed amendment:

Councillors Mabon ap Gwynfor, Brian Blakeley, Ellie Chard, Meirick Lloyd Davies, Rachel Flynn, Alan James, Gwyneth Kensler, Barry Mellor, Paul Penlington, Peter Prendergast, Arwel Roberts, Graham Timms, Cheryl Williams and Emrys Wynne.

 

Against proposed amendment:

Councillors Ann Davies, Gareth Davies, Hugh Evans, Peter Evans, Bobby Feeley, Tony Flynn, Huw Hilditch-Roberts, Hugh Irving, Brian Jones, Tina Jones, Geraint Lloyd-Williams, Richard Mainon, Christine Marston, Melvyn Mile, Anton Sampson, Peter Scott, Glenn Swingler, Tony Thomas, Andrew Thomas, Rhys Thomas, Julian Thompson-Hill, Joe Welch, David G. Williams and Mark Young.

 

Therefore, the proposed amendment failed.

 

A vote then took place on the substantive recommendation as follows:

 

In Favour – 24

Abstain – 0

Against – 12

 

RESOLVED that Council:

(i)            Note the impact of the Draft Local Government Settlement 2020/21

(ii)          Approves the proposals outlined in Appendix 1, and detailed in Section 4, in order to finalise the budget for 2020/2021

(iii)         Approve the average Council Tax rise of 4.3% proposed

(iv)         Delegate authority to the Head of Finance and Property in consultation with the Lead member for Finance to adjust the use of cash 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

(v)          Confirms that it has read, understood and taken account of the Well-being Impact Assessment.