Agenda item

To consider a report by the Head of Finance and Assets (copy enclosed) which provides an update of the latest position with regard to the process of setting the Council’s budget for 2014/15.

A report by the Head of Finance and Assets, which provided an update of the latest position with regard to the process of setting the Council’s budget for 2014/15, had been circulated previously.

The majority of the Council’s funding, approximately 78%, came from Welsh Government via the Revenue Support Grant and redistribution of NNDR. In 2013/14, the final settlement for Denbighshire was £150.821m.  The remainder of the funding was provided though Council Tax, £40.7m budgeted in 2013/14. The impact of movement on the settlement had a much more significant impact than movement on levels of Council Tax.

The CA provided an introduction and focused on the report, circulated with the papers for the meeting, which would be presented to Council on the 10^th September, 2013.  A report had been presented in June, 2013 outlining the latest assumptions with regard to the Council’s potential revenue budget settlement and possible financial consequences.  Until the Draft Local Government Settlement was published in October, the position would be unclear although all indications were that the settlement would be poor, with the WLGA having recommended that Councils assume a reduction of -4% in 2014/15.  The CA explained that  there were still too many uncertainties to give a precise figure but if the reduction to the Council’s revenue settlement was at the level of -4% and the impact of the census change was implemented in one year, then a planning assumption of a reduction of between £8-9m would not be an unreasonable possibility.  The Council would also incur inflationary pressures in areas such as pay, pensions, energy and service demand.

In response to the likely poor settlement, progress was being made with all services to identify saving proposals for the coming three year period.  New saving proposals, with three services still to be reviewed, would be considered in September with the relevant Lead Members prior to presentation to elected Members at a workshop in October.

The Service Challenge process for 2012/13 and 2013/14 had identified potential savings of £1.716m for 2014/15.  The proposals had been considered in detail at the Service Challenge meetings and had been confirmed at recent meetings with Heads of Service.  The saving proposals had been included in Appendix 1 and had been described as Phase 1 of the process of achieving a potentially significant target for 2014/15.

The report to Council identified savings of £1.7m with £782k proposed by services and £963k of corporate led efficiencies, with £663k of the corporate efficiencies being delivered by services.  Saving proposals for 2014/15 had been considered at service challenge meetings in 2011 and 2012 and been included as part of the three-year targets identified in the Medium Term Financial Plan.  Formal agreement of the previously identified saving proposals would allow political and corporate effort to be

focussed on the challenging task of setting the rest of the budget for 2014/15. 

The corporate savings highlighted as Modernising the Council form part of a target to achieve approximately £3.0m of savings over the coming 3 years as projects are developed to deliver efficiency and to create capacity in services. A number of efficiency projects are in development, including investment in Electronic Document and Records Management (EDRMS) and Central Invoice Registration and other projects to widen the use of technology to allow savings to be delivered through reduced need to travel, greater flexibility and more efficient administration. Ultimately the modernisation saving targets will be delivered by services.

The summary of efficiency programme phase 1 2014/15 Equality Impact Assessment in relation to the impact of the savings proposals had been included as Appendix 2.

Concerns were expressed regarding the impact of non council tax payers in respect of the outcome of the census data produced, particular reference being made to transient, persons residing in caravans or holiday homes.  The CA outlined the reasons for the variance in the census figures and confirmed that the Society of Welsh Treasurers were in discussion with the Welsh Local Government Association (WLGA), who were seeking mitigation in respect of the impact of the figures, and highlighted the possible need to revise the settlement figures.  The CA agreed that details of the negotiations with the WLGA could be provided and he responded to a concern raised by Mr P. Whitham regarding the potential risks involved.  He explained that there was a standard entry on the Finance Risk Register regarding the setting of a balanced budget, and agreed to provide Mr Whitham with further information in respect of this matter.  The HLDS provided details of the entry on the Corporate Risk Register, and the HIA confirmed that Internal Audit would be examining the actions being taken and reporting on their progression.

Councillor G.M. Kensler suggested that it would be important to examine closely the ambitions of the Council prior to setting of the council tax precept, and to ensure the maximisation of external funding and the utilisation of any available grants.

The view was expressed by Councillor M.Ll. Davies that further detail should be provided in respect of the loss of income resulting from the closure of various Council facilities.  The CA agreed to provide a response to Councillor B. Blakeley regarding the loss of income resulting from the car park in Quay Street being closed.

Councillor S.A. Davies referred to the extension of the AONB and he expressed the view that its membership should include the two Llangollen Ward Members.

In reply to a question from the Chair, the CA provided details of the generation of budget savings and efficiencies with regard to the medium and long term plans in respect of collaboration and partnerships projects.  He confirmed that at present there were no major partnership initiatives planned with regard to budget reductions.

RESOLVED – that the Corporate Governance Committee notes the latest position and proposed next steps, and the saving proposals being taken to County Council for formal approval.