Agenda item

To consider a report by the Head of Finance (copy attached) which sets out the implications of the Welsh Government Provisional Funding Settlement for Local Government 2024/25 and proposals to set a balanced budget for 2024/25.

 

Councillor Gwyneth Ellis, Lead Member for Finance, Performance and Strategic Assets, introduced the Council Budget 2024/25 report (previously circulated).

 

The report set out the implications of the Welsh Government’s (WG) Provisional Funding Settlement for Local Government 2024/25 and the proposals to set a balanced budget for 2024/25.

 

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.

 

There was a statutory duty on the Head of Finance and Audit (Section 151 Officer) to report to Full Council, at the time the budget was considered and the Council Tax was set, on the robustness of the budget estimates and the adequacy of financial reserves.

 

The unprecedented financial challenges facing the council, along with all other local authorities, meant a different process to budget setting was required and it had been an extremely difficult and uncomfortable process.  Councillor Ellis thanked all involved in that process which had resulted in the submission of a balanced budget.

 

Councillor Ellis and the Head of Finance and Audit provided an overview of the budget process and latest financial position and elaborated on the proposals for consideration to set the budget for 2024/25.  In brief, the provisional settlement had resulted in a cash increase of 3.6% (£6.720m) and following a council tax base adjustment was higher than the cash comparison at 3.7% (compared to the Welsh average of 3.1%) with a final settlement expected in early March. The settlement included all pay increases for teaching and non-teaching posts and responsibility to pay care workers the Real Living Wage.  Pressures amounting to £24.682m had been detailed and the provisional settlement generated £6.720m leaving a funding gap of £17.962m with proposals to bridge that gap identified in the report and further explained at the meeting.  A Council Tax rise of 8.23% plus an additional 1.11% (change to the indicative figure of 1.3% in the report) for the increase in the levy to North Wales Fire and Rescue Authority equating to an overall uplift of 9.34% was proposed to generate £7.580m additional revenue. 

 

The proposed use of earmarked reserves was also highlighted to assist the budget setting.  The risks of not achieving a balanced budget had also been set out together with mitigation measures and further work required going forward.  The medium-term financial outlook looked equally as challenging.

 

The Chief Executive, Graham Boase, confirmed to Full Council that this would be the most difficult and challenging budget members had had to set and the budget would also be difficult in the years ahead.    Work had taken place to assist schools and also provide an additional £10 million for social care. 

 

Work was taking place across all service areas to look for savings and efficiencies whilst limiting impact on services.  

 

Budget Workshops had taken place to engage with all members.   The Chief Executive confirmed his commitment to continue to engage with members through Budget Workshops and video meetings. 

 

Group Leaders were requested to address the meeting.

 

Councillor Jason McLellan spoke on behalf of the Labour Group.  Thanks were offered to Liz Thomas, Head of Finance, Steve Gadd and the team as they had all worked extremely hard  regarding the budget.

 

It was agreed it had been a long process and an unprecedented situation Local Authorities found themselves in.   No members wanted to vote for cuts and discussions had taken place at length but there was a need to vote for a balanced budget.   Services were to be protected for those most vulnerable within the community.  Councillor McLellan urged members to vote for the balanced budget.

 

Councillor Delyth Jones spoke on behalf of the Plaid Cymru Group.  Councillor Jones reiterated that the problem was not just for Denbighshire but was nationwide.  There had to be a process to deal with the budget and savings were required.  Members had attended various Budget Workshops where decisions were challenged.  A balanced budget was required to offer services which the council were extremely proud of. 

 

Councillor Jones queried the announcement of additional monies being offered to English Councils.

 

The Head of Finance, Liz Thomas, confirmed that the previous week, an announcement had been made that the UK Government were to pay an additional £600million.   It was understood that the Welsh Government would receive an additional consequential £25million.  Discussions were ongoing as WG had to make a decision what they do with the consequential.   £25million across Wales would not make a big difference which was a reason to increase the amount in recommendation 3.4 from £500k to £1million.

 

Councillor Hugh Irving spoke on behalf of the Welsh Conservatives.  Councillor Irving thanked Councillor Ellis and Liz Thomas for all their work. 

 

Councillor Irving offered a differing view as he was critical of the report and did not agree a balanced budget would be possible during the difficult financial times the council were facing and he queried the superannuation fund.

 

The Head of Finance, Liz Thomas, confirmed that during a Budget Workshop it had been discussed and there was a reserve labelled superannuation fund and in the recent 3 years which have just been gone through the contribution has gone down and a deficit of fund overall.  This had enabled the creation of a reserve which had been set aside.

 

Councillor Irving  stated that the budget put demands on each Head of Service.  If a balanced budget were not to be agreed, what would be the outcome.  Councillor Irving urged members to vote against the report.

 

Councillor Gwyneth Ellis confirmed that the Budget had been discussed in numerous Council Workshops.  It was stressed that there was a need to avoid going down the route of not having a balanced budget.

 

The Head of Finance, Liz Thomas, confirmed that not all reserves would be utilised as it would be a controlled use of reserves ensuring as much as possible was protected.

 

Councillor Huw Hilditch-Roberts spoke on behalf of the Independent Group.   It was stated that budget cuts were to be made, a high council tax rise and less services.  That was a difficult situation and therefore, could not vote in favour of a balanced budget as the budget was not balanced.

 

Councillor Gwyneth Ellis confirmed council tax needed to be increased and disagreed with Councillor Hilditch-Roberts that it was a balanced budget. 

 

Councillor Martyn Hogg spoke on behalf of the Green Party.  It was confirmed it would be getting harder to balance the budget.  Members did not want to make cuts but it was complicated.  All members had been involved in the process and had opportunity to suggest alternatives.  Councillor Hogg confirmed he supported the Budget and trusted the process going forward.

 

At this juncture, the Monitoring Officer, Gary Williams, confirmed that recommendation 3.4 of the report have the figure amended from £500k to £1million.  The amendment was proposed and seconded and unanimously voted in favour of the amendment.

 

During discussions, the following issues were raised –

(i)            Information was requested regarding the collective impact of cuts. Schools were in deficit and concern was expressed how they were to find additional savings.  Concern was also raised for the economy of local towns due to budget cuts.

It was clarified that the council supported local towns and local economy.  Representatives from DCC continued to sit on the North Wales Economic Ambition Board (NWEAB).  Three Levelling Up Fund applications had been successful and external funding was always maximized.

Schools managed their own budgets which would increase overall but there would be a reduction in the funding formula which goes out.  Schools could apply for a licensed deficit and there was a recovery process in place.   Meetings have been taken place with schools to with a recovery plan.

(ii)          The financial situation facing local government was condemned as it meant severe cuts had to be made to vital services in order to set a balanced budget and called for improved and sustainable funding to deliver those services.  It was noted that recent calls had been made by MPs across the political spectrum for the UK Government to provide additional funding for local government.  Given the current financial context, it was believed the budget proposals represented the best outcome to ensure social care services and school learners were protected as far as possible and to safeguard the most vulnerable in society.

(iii)         It was stated that in 23/24 a better than expected settlement of 8.2% had been received with a rise of 3.8% council tax.  Today members were being asked to agree to a 9.34% rise in council tax which raised concerns as residents were being expect to pay an increase during the cost of living crisis.

(iv)         The risk had been outlined within the report and members expressed concern regarding the £3million saving, Heads of Service were aware of the savings required.  Regarding the Voluntary Exit Scheme there had been 140 applications received from staff.  Heads of Service had completed a business case to assess the individual who had applied to voluntarily leave.  The business cases would be put before CET who would decide which applicants would be approved.  It was not a case that every applicant would be granted approval as there were implications to the relevant service and exit costs.

(v)          Gratitude was expressed to all staff during this difficult time who were the backbone of the council.  It was a worrying time for everyone involved with councils.

 

Following debate, a recorded vote was requested and it was confirmed that a further eight members would be required to support a recorded vote.  More than eight members supported the proposal for a recorded vote which was proposed and seconded.

 

Therefore, a recorded vote took place and the results were as follows –

 

In favour of the budget report including the amended 3.4 recommendation to increase the reserves from £500k to £1milllion

Councillors Michelle Blakeley-Walker, Joan Butterfield, Jeanette Chamberlain-Jones, Ellie Chard, Kelly Clewett, Gwyneth Ellis, Gill German, Jonathan Harland, Elen Heaton, Martyn Hogg, Carol Holliday, Alan Hughes, Alan James, Delyth Jones, Diane King, Julie Matthews, James May, Jason McLellan, Barry Mellor, Rajeev Metri, Win Mullen James, Arwel Roberts, Gareth Sandilands, Rhys Thomas, Cheryl Williams, Elfed Williams and Emrys Wynne (27)

 

Against

Councillors Ann Davies, Karen Edwards, Pauline Edwards, James Elson, Chris Evans, Hugh Evans, Justine Evans, Bobby Feeley, Huw Hilditch-Roberts, Hugh Irving, Brian Jones, Paul Keddie, Geraint Lloyd-Williams, Terry Mendies, Andrea Tomlin, David Williams, and Huw Williams (17)

 

Abstain

Councillors Peter Scott and Mark Young (2)

 

Therefore, it was –

RESOLVED:

(i)            To note the impact of the Provisional Settlement 2024/25

(ii)          That Council supported the proposal outlined in Appendix 1, and detailed in Section 4, as recommended by Cabinet in order to set the budget for 2024/25.

(iii)         To approve the average Council Tax rise of 8.23% for council services plus an additional 1.11% for the increase in the levy to the North Wales Fire and Rescue Authority.  This equated to an overall uplift of 9.34% proposed (paragraph 4.4)

(iv)         To delegate authority to the Head of Finance and Audit, in consultation with the Lead Member for Finance, to adjust the use of cash reserves included in the budget proposals by up to £1million 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)          That Council supports the strategy for use of reserves as set out in paragraph 4.5, as recommended by Cabinet.

(vi)         That Council confirms it has read, understood and taken account of the Well-being Impact Assessments as set out in Section 7.