Agenda item

To consider a report by Councillor Gwyneth Ellis, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) seeking Cabinet approval of the Medium Term Financial Strategy and Medium Term Financial Plan, and consideration of the early savings proposals for setting the 2025/26 budget.

RESOLVED that Cabinet –

(a)      approves the Medium Term Financial Strategy and Medium Term Financial Plan included at Appendices 1 and 3 to the report;

(b)      notes the early savings proposals for setting the 2025/26 budget as set out in Appendix 2 to the report, and

(c)      notes the ongoing work to set a balanced budget in 2025/26.

Councillor Gwyneth Ellis presented the report updating Cabinet on the Medium Term Financial Strategy (MTPS) and Medium Term Financial Plan (MTFP) and sought consideration of the early savings proposals for setting the 2025/26 budget.

There had been little change to the MTFS and MTFP documents since the last iteration with no change to the overall picture.  However, the position could change following the UK Government Budget on 30 October 2024.  In terms of proposed savings there had been a positive outcome as to how the Council responded to delivering homelessness services which would also generate a substantial saving.

The Head of Finance and Audit took members through the report which included –

·       the high-level MTFP which contained current budget projections along with a range of assumptions to provide a low, medium, and high estimate of each cost pressure together with the impact of estimated increases in Council Tax and funding from the Welsh Government (Appendix 1 to the report)

·       the MTFS compiled with data as at early October setting out the Council’s strategic approach to the management of its finances and scale of the financial challenge (Appendix 3 to the report) with key points highlighted in the cover report and changes made to the MTFS highlighted in yellow for ease of reference, and

·       progress on service saving proposals that were being developed as part of the budget setting for 2025/26 (Appendix 2 to the report).

Much work was focused on setting the budget for 2025/26 with the cost of delivering services forecasted to increase by £18m.  Staff pay increases remained a pressure together with significant service pressures mainly related to demand led services which were both significant and largely outside the Council’s control.  Working assumptions had been made around the Welsh Government funding settlement at slightly negative reductions and Council Tax at circa 9% which left a forecasted budget gap of £12m which would require significant savings across the authority in order to achieve a balanced budget.  Early savings proposals had been brought forward with much work still ongoing to meet the savings required.  Future years forecasted a budget gap of £15m and £14m for 2026/27 and 2027/28 respectively.

The Leader thanked the Head of Service for the detailed overview with the documentation having previously been discussed at length by Cabinet.  It was also noted that a recent Council Budget Workshop had been held for all members.

Main areas of debate focused on the following –

·       an update was provided on the new financial system recently introduced which replaced a number of different systems with the financial forecasting module element in place from September.  The new system represented a major change to the operation of the team and provision of financial information; the system would continue to be refined and training and development was ongoing

·       Councillor Bobby Feeley referred to Council Tax setting in February and residents’ expectation for recompense due to the disruption caused by the roll out of the new waste system.  Officers explained that Council Tax funded general services provided by the Council and was not linked to a specific service area; it was a tax which the Council had a legal obligation to set and collect and those served with a Council Tax demand had a legal obligation to pay.  It was not a contractual obligation for which individuals could be compensated.  Officers agreed to recirculate the member briefing which clarified the position on Council Tax which would help members answer questions from residents in that regard

·       whilst it was made clear there was no link between the issues with the roll out of the new waste service and Council Tax, reference was made to the separate issue of the green waste service which was a subscribed and paid for service for which some customers had experienced disruption to collections.  That issue was currently under consideration following which further information would be circulated to members on the Council’s position

·       the estimated pay awards for 2023/24 had been sufficient for the budget and had generated a saving to fund service overspends.  The latest position regarding the 2024/25 pay award for both teaching and non-teaching staff was provided with an agreement reached on the teachers’ award and negotiations still ongoing with regard to non-teaching staff.  If the estimated pay award for non-teaching staff was not sufficient, reserves would need to be used if no additional funding was made available, which would also impact on the base budget for future years.

RESOLVED that Cabinet –

(a)      approves the Medium Term Financial Strategy and Medium Term Financial Plan included at Appendices 1 and 3 to the report;

(b)      notes the early savings proposals for setting the 2025/26 budget as set out in Appendix 2 to the report, and

(c)      notes the ongoing work to set a balanced budget in 2025/26.