Agenda item

To consider a report (copy attached) providing an update on the budget setting process and detailing proposals to be approved by County Council to set the Council’s revenue budget for 2016/2017.

 

The Lead Member for Finance and Assets, Councillor Julian Thompson-Hill, introduced the Budget 2016/2017 report (previously circulated).

 

The report set out the implications of the Provisional Local Government Settlement 2016/2017 and proposals to finalise the budget for 2016/2017.

 

The Council is 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 Council also has to provide an overview of the budget process and the impact of the Provisional Local Government Settlement and to make recommendations to set the budget for 2016/17, including the level of Council Tax.

 

The Settlement announced on 9 December 2015 was much better than expected with an overall cash reduction to Local Government of -1.4% and a reduction to Denbighshire of -1.2%.

 

The range of reductions across Welsh Councils varied from -0.1% (Cardiff) to  -4.1% (Powys) with the impact generally worse for rural counties.  Previous funding floor mechanisms had been removed from the Settlement which was why the range was relatively wide.

 

The Freedom and Flexibilities process was due to end with the setting of the 2016/17 budget and a new budget process would be developed for 2017/18.

 

In December, 2015, a report to Full Council set out the latest budget position and assumptions, which indicated a remaining budget gap of £2m.  This gap had been calculated with a number of assumptions which had changed as a consequence of the Provisional Settlement.  These were explained in detail at the budget workshop held with Members on 14 December, 2015.

 

The changes to the Settlement value allowed for a proposal to lower the level of proposed Council Tax rise from 2.75% to an average of 1.5%.

 

Discussion took place and Members raised the following points:

·       Various suggestions had been raised at previous budget sessions and updates were requested.     It was confirmed that the suggestions raised at the Budget sessions would have been brought forward if further savings had been required.  The suggestions would will be considered as part of the  2017/18 budget process. 

·       Deficit payments required for pension schemes, together with issues regarding Teachers pension contributions were raised. The differences between the funding of the Teacher’s pension scheme and the Local Government scheme were explained, including the treatment of deficit funding.. It was explained that both pension schemes are governed by UK legislation.

·       Councillor Joan Butterfield, as Leader of the Labour Group confirmed that due to the Settlement from the Welsh Government being better than expected, the Labour Group were in agreement to approve the Council Tax increase of 1.5%.  Councillor Butterfield also stated that the Labour Group hoped the Settlement for 2016/17 would protect services for the most vulnerable and isolated people within the county.  Councillor Butterfield then expressed concern regarding the Police precept.  It was confirmed that Police and City, Town and Community Councils set their own level of Council Tax which was then added to the County Councils.  Councillor Brian Blakeley confirmed he had attended the Police and Crime Committee the previous day and the increase in the Police precept was to be 2.47%.

·       The inclusion of  £0.5m from balances  as part of the funding of the 2015/16 budget f was questioned.  The amount of balances and the current debt was requested.  The Chief Finance Officer confirmed that the  budget for 2015/16 was set with a funding contribution from balances and that this would continue for three financial years. The contribution from balances would only be made if required during the financial year. . So if for example council tax yield was slightly higher than had been assessed in the budget during the year, the budgeted amount of balances may not need to be drawn down.  The level of net debt was £191million, and general balances was  £7.5million.  A detailed report was to be presented at Corporate Governance Committee the following day (27 January, 2016) which would set out the indicators in more detail. 

At this juncture, the Head of Legal, HR and Democratic Services stated that as pensions had been discussed, Members would be required to declare a personal interest if they were either paying in or in receipt of a teaching/ Local Government pension.

 

·       The budget regarding Council Tax was usually brought before Full Council at this time each year as it enabled Council Tax bills to be prepared prior to the beginning of April.

·       The issue of any problems which could be foreseen in the future 12 months could not be guaranteed at this point in time.  The distribution and cuts to specific of grants from the Welsh Government could be an issue as could on going debates about funding to rural councils. The issue of the cost of private care/nursing homes was also briefly discussed.

 

The Leader, Councillor Hugh Evans expressed his gratitude that the Settlement had been a lot better than anticipated.  In previous years, a total of £28million in cuts had been made but Denbighshire had continued to be a high performing Council.  Communication had taken place with residents who had expressed a preference for low Council Tax and for services still to be provided.  Councillor Evans expressed his gratitude to the Finance Officers for their work in an extremely difficult situation.

 

The Lead Member for Finance and Assets also expressed his gratitude to all Members who had taken part in the process, together with Officers, the Chief Accountant, Steve Gadd and the Chief Finance Officer, Richard Weigh for their hard work.

 

The recommendation was proposed and seconded.

 

At this juncture, Councillor Eryl Williams requested a minor change to Appendix 1 to amend the wording to “potential use of balances” rather than “use of balances” – all members present agreed.

 

RESOLVED that:

·       Council noted the impact of the Provisional Local Government Settlement and that no further savings beyond the £5.2millilon already approved are required from services for 2016/17.

·       Council approves the budget proposals set out below, based on the Provisional Local Government Settlement in order to finalise the 2016/17 budget:

(i)              To increase funding to schools to meet the national level of protection of +1.85%

(ii)             To set aside a one-year budget delivery contingency of £480k for 2016/17 to mitigate the risks to the delivery of the budget set out in this report

(iii)            To approve the resulting average increase in Council Tax of 1.5%

·       To amend the wording in Appendix 1 from “use of balances” to “potential use of balances”