BUDGET 2022/23 - FINAL PROPOSALS
To consider a report by the Head of Finance and Property (copy attached).
The Lead Member for Finance, Performance and Strategic Assets, Councillor Julian Thompson-Hill, introduced the Budget 2022/23 – 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 Draft Local Government Settlement for 2022/23 had been received by the council on 21 December 2021 and resulted in a positive settlement of 9.2%, compared to the Welsh average of 9.4%. The Final Settlement was expected on 1 March but the Welsh Government (WG) had indicated that there should be very few changes.
Within the announced figure the WG advised that there were a number of new responsibilities, not all of which had clear funding consequentials within the data. The expectations required to fund included the following:
· All pay increases for both teaching and non-teaching posts were included within the RSG;
· The responsibility to pay both in-house social care and the private sector social care the Real Living Wage;
· The core operational costs in connection with the new Corporate Joint Committee; and
· Mitigation for the fact that the Covid Hardship Fund would cease as from the end of the existing financial year.
The WG draft settlement included indicative average settlement increases of 3.5% for 2023/24 and 2.4% for 2024/25 (estimated DCC figures would be 3.3% and 2.2%). Although this was welcome from a planning perspective, it did indicate that difficult decisions would be required over the coming years.
As part of the settlement there were “transfers in” of £0.275m which had been passported to the relevant service areas as in previous years:
· Gate Fees for Regional Waste Recycling £0.109m
· Social Care Workforce Grant £0.166m
The final proposals to balance the 2022/23 budget were shown in the Medium Term Financial Plan (MTFP) in Appendix 1.
The pressures identified amounted to £17.628m. A draft settlement of around 11% would have been required in order to fund all the pressures. The net +9.2% settlement generated £15.005m additional revenue leaving a funding gap of £2.623m. The following items were included in the proposals in order to bridge the gap:
· Fees and Charges Income Budgets had been inflated in line with agreed Fees and Charges policy which increased external income by £0.120m;
· Operational efficiencies amounted to £0.634m had been identified which were within Head Service delegated responsibility in consultation with Lead Members (shown in Appendix 2 of the report for summary by category);
· No savings had been requested from Community Support Services or Schools;
· It was recommended that the Council Tax increased by 2.95% which, along with minor changes to the Council Tax Base, would generate £1.869m additional revenue. This compared to the previous year’s increase of 3.8% and 4.3% the year prior to that.
The Section 151 Officer confirmed that work had taken place with other Local Authorities in Wales for a joint approach and the WLGA in relation to allocation for pay and the Real Living Wage in Social Care settings. The Section 151 Officer stated this to assure members regarding the figures within the report.
Councillor Paul Penlington expressed concern if council tax were to be raised by 2.95% and raised the point that approximately £14m per year was to service loans for council projects. Councillor Penlington also raised horizon scanning for capital works and enquired as to what were the capital works, what would be the cost of the works and would there be further debts due to the works.
The Lead Member for Finance, Performance and Strategic Assets, responded by confirming that 2.95% rise in council tax was a realistic figure that could be delivered and could deliver the level of services which was expected by Denbighshire residents. There was a significant figure which was within the budget for servicing historical capital expenditure. That was for a whole range of things for schools, flood policies etc. carried out by the council and some of those go back some considerable time as they were usually paid over a 25 year period. In construction projects, occasionally they go over the time stated and above budget but everything was done at all times to minimise the impact in terms of that.
In terms of horizon scanning, at the July Budget Workshop the Section 151 Officer and the Lead Member for Finance, in terms of capital, Services were asked what they thought they would need during the next 5-10 years. The list came to approximately £180m which Denbighshire could not meet but to give an idea of the scale of what would be needed in the future. Each individual scheme would need a Business Case and go through the internal processes prior to being included in the Capital Plan. Some of those schemes would require an element of funding with some budget allocated to meeting that.
Councillor Glenn Swingler raised the fact that the cost of living was the highest it had been for over 30 years. The retail and price index stood at 7.5%. Gas and Electricity prices were soaring and expected to rise by another 50%. Food prices were soaring, and higher National Insurance payments to be introduced. The money from the Welsh Government to the Council was higher than expected which was welcome. However, Denbighshire County Council had a budget in excess of £200m. As the rising costs would force even more Denbighshire individuals to fall into poverty, lose their homes, require free school meals, access more health care, family breakdowns etc., that would ultimately cost the council a lot more money.
At this juncture Councillor Glenn Swingler PROPOSED for 2022/2023 Denbighshire County Council not to increase Council Tax. This was proposed due to the hardship people of Denbighshire were going through currently as the rise in the cost of living would cause a lot of people financial difficulties.
Councillor Gwyneth Ellis SECONDED the proposal put forward by Councillor Swingler for a 0% rise in Council Tax.
The Lead Member for Finance, Councillor Thompson-Hill responded to Councillor Swingler clarifying 2.95% increase in council tax provided £1.723m of income. There would need to be plans from Councillor Swingler as to which of the £17m of pressures would not be met or which services would have £1.723m of cuts.
The Head of Legal, HR and Democratic Services, Gary Williams informed members they would need to debate the amendment proposed by Councillor Swingler. Following the debate, a vote would take place on the amendment and would then go back to the substantive recommendations within the report.
Councillor Swingler again expressed concern regarding the financial pressures being placed upon the working people of Denbighshire and reiterated that for one year Denbighshire County Council should not make any increase in the council tax.
Both the Lead Member for Finance and the Section 151 Officer expressed concern as there would be a gap in the budget if the council tax were not to be increased. It was stated that a balanced budget was required and the proposal would not constitute a balanced budget. Councillor Swingler would need to indicate which pressures would not be funded and in which areas there would be service cuts to accommodate the amount of income lost. It was also confirmed by officers that discussions would need to take place with services regarding potential savings. Time would be an issue as a balanced budget was required before the end of the financial year and this would cause problems for all services within the county.
Councillor Gwyneth Ellis stated that the Wellbeing Impact Assessment should take into consideration the loss of income and increase in the cost of living as this would have a negative impact on people’s health and mental wellbeing within the county. In this regard she questioned why the impact would be neutral.
The Section 151 Officer, Steve Gadd responded that assessments were always difficult because the primary reason for the assessment of neutral impact whilst recognising that any increase in council tax would have an impact on individual budgets. In Wales, there was the Council Tax Reduction Scheme which meant that the most vulnerable people and those on benefits did not pay the council tax so that had to be balanced with the actual provision of services delivered for everyone in Denbighshire. In England, for example, the Council Tax Reduction Scheme did not exist, but as it did in Wales, it offered protection to those who would struggle to pay. It was a difficult process to do the wellbeing impact assessment on a particular thing that helped fund every single service in the council. Without council tax, schools would not be funded, would not be able to fund social care, and would not be able to fund every service in the council. It was a very difficult process but both sides are included in the Wellbeing Impact Assessment by Officers.
Councillor Gwyneth Ellis stated that she appreciated doing the wellbeing impact assessment was difficult but under healthier Denbighshire people’s emotional and mental wellbeing should be taken into consideration. The rise in council tax was going to have an impact on people’s emotional and mental wellbeing and Councillor Ellis thought, in her opinion, it was wrong it would not be considered in the report.
fThe Section 151 Officer stated If the vote on the amendment were carried as there was not a set of proposals which could be carried during the meeting, hence there would not be a balanced budget. If one part of the budget were to be removed the budget proposals would not be valid. He also stated if the amendment were granted, members would not be able to vote on the budget as it would not be a balanced budget.
The Head of Legal, HR and Democratic Services clarified that whilst a vote could be taken on the amendment and if carried would change the recommendation, consideration would have to then be given to the recommendation as passed. This was due to the fact that there were no suggestions being put forward to fund the gap that the amendment would have caused. Members had a legal responsibility to set a balanced budget which would not be in place if the amendment were to be passed.
The Chief Executive, Graham Boase stated, in his opinion, a rise of 2.95% was a reasonable level of council tax. The overall budget had to be taken together as it was difficult to isolate certain parts of the budget. A balanced budget required a rise of 2.95% in council tax.
Councillor Graham Timms raised a point of order to propose the question of the amendment be put to the vote. Seconded by Councillor Andrew Thomas.
The Head of Legal, HR and Democratic Services clarified the amendment proposed was to amend the recommendation in the report so that recommendation 3.3 would read “that Council approves a 0% rise on the average Council Tax”.
Councillor Paul Penlington requested a recorded vote.
The Head of Legal, HR and Democratic Services confirmed that 7 members would be required to support the request for the recorded vote.
Councillors Paul Penlington, Gwyneth Ellis, Gwyneth Kensler, Rhys Thomas, Alan Hughes, Arwel Roberts and Glenn Swingler supported the recorded vote for the amendment proposed by Councillor Glenn Swingler.
At this juncture, Cllr Meirick Lloyd Davies confirmed he would abstain from the vote as he had missed a majority of the discussion.
A recorded vote took place as follows:
FOR – Councillors Gwyneth Ellis, Alan Hughes, Gwyneth Kensler, Paul Penlington, Arwel Roberts, Glenn Swingler, Rhys Thomas
AGAINST – Councillors Alan James, Brian Blakeley, Joan Butterfield, Jeanette Chamberlain-Jones, Ellie Chard, Gareth Davies, Hugh Evans, Bobby Feeley, Rachel Flynn, Tony Flynn, Huw Hilditch-Roberts, Martyn Holland, Hugh Irving, Brian Jones, Pat Jones, Geraint Lloyd Williams, Richard Mainon, Christine Marston, Barry Mellor, Melvyn Mile, Bob Murray, Merfyn Parry, Pete Prendergast, Anton Sampson, Peter Scott, Andrew Thomas, Tony Thomas, Julian Thompson-Hill, Graham Timms, Cheryl Williams, Eryl Williams, Huw Williams and Mark Young
ABSTAIN – Councillor Meirick Lloyd Davies
FOR – 7
ABSTAIN – 1
AGAINST – 33
Therefore, the amendment failed and debate went back to the original recommendations as set out in the report.
Councillor Graham Timms stated that the settlement received would make a difference to the people of Denbighshire. In 2017 Councillor Timms had raised the issue of paying the Real Living Wage to all Denbighshire workers. He confirmed that the Welsh Government paid the Real Living Wage, as did the NHS in Wales. 14 councils also paid the Real Living Wage to their workers. Denbighshire had a responsibility to pay the Real Living Wage. Within the forward work programme the Real Living Wage had been put for consideration by the next Council. Denbighshire should move forward with paying the Real Living Wage and he urged the Lead Member for Finance to come back to Full Council with proposals how this could be introduced.
Councillor Joan Butterfield supported Councillor Timms for the payment of Real Living Wage to all Denbighshire Workers.
The Lead Member for Finance, Councillor Julian Thompson-Hill stated it was beneficial to have a three year budget settlement for planning ahead.
Regarding the Real Living Wage, this had not been progressed as the national pay award had not been agreed and was not able to bring a report forward without the confirmation of the pay award. On the implications on what was being budgeted for, it was likely that all Denbighshire staff would then be covered by the Real Living Wage element.
Councillor Meirick Ll Davies stated that on page 18 of the Welsh pack at item no. 5, it read “that the Cabinet confirms it has read….”, it should read “that the Council confirms it has read ….”
The Head of Legal, HR and Democratic Services apologised for the error and it was actually correct in the English papers.
In terms of the Real Living Wage, all Council staff were paid the Real Living Wage at the time of the last pay deal. The pay deal that was to take effect on the 1 April 2021 had still not been agreed nationally between the employers and the trade unions. The final offer that had been made by the employers would have meant that all of Denbighshire staff would be continued to be paid the Real Living Wage. Some of the trade unions had balloted in respect of industrial action, one trade union ballot did not meet the legal threshold in terms of turn out. Another trade union was currently balloting and confirmation was awaited from the National Joint Council of Employers and Trade Unions whether negotiations would be finalised. The deal that was offered would have meant that all Denbighshire staff would continue to be paid the Real Living Wage.
Councillor Julian Thompson-Hill proposed the approval of the proposals for members to approve the Budget 2022/2023 – Final Proposals, seconded by Councillor Christine Marston.
A zoom poll vote took place as follows:
FOR – 33
ABSTAIN – 3
AGAINST – 3
RESOLVED that Council:
(i) Note the impact of the Draft Local Government Settlement 2022/2023;
(ii) Supports the proposals outlined in Appendix 1, and detailed in Section 4, in order to finalise the budget for 2022/2023;
(iii) Approve the average Council Tax rise of 2.95% proposed;
(iv) Delegate authority to the Head of Finance and Property in consultation with the Lead Member for Finance and 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 it has read, understood and taken account of the Wellbeing Impact Assessment.
- Budget Report, item 5. PDF 180 KB
- App 1 MTFP, item 5. PDF 199 KB
- App 2 Service Pressures and Savings, item 5. PDF 186 KB
- App 3 Council Tax Sensitivity, item 5. PDF 359 KB
- App 4 Wellbeing Impact Assessment, item 5. PDF 101 KB