To consider the joint Officers’ report.
Members considered the joint Officers’ report.
The Chief Officer Resources spoke in detail to the report which provided an assessment of the Council’s financial position over the next 5 years together with the proposed approach that the Council would take to address the financial challenges. The following salient points contained therein were highlighted:
ØAppendix A of the report proposed the approach to be taken to respond to the financial challenges. This would be an iterative process and one that would be developed and refined as the Welsh Government funding settlement became clearer and strategic business reviews were further developed and implemented.
ØDue to the General Election, Welsh Government had delayed the announcement of the draft local government settlement to 16th December, 2019 with the final settlement due on 25th February, 2020. This delay had implications for the 2020/2021 budget setting process and planning for the actual budget cuts required to set a balanced budget. Therefore, the Council’s current Medium Term Financial Strategy (MTFS) contained a number of assumptions which impact on the level of its income and expenditure.
Councillor P. Baldwin joined the meeting at this juncture.
ØBased on these assumptions a budget gap of £16.2m over the next 5 years was forecast.
ØThe Strategic Business Reviews have been progressing (detailed at Appendix 1) and the overall financial achievement towards the budget gap was currently assessed as between £5.4m and £7.9m over the period of the Strategy. It was noted that the Corporate Overview Scrutiny Committee had considered the MTFS and Strategic Business Reviews at a recent meeting.
ØBased on the current estimated achievement from the Strategic Business Reviews compared to the budget gap identified in the MTFS there was a residual funding gap of between £8.3m and £10.8m over the next 5 years. For the next financial year 2020/2021 this residual funding gap was between £1.1m and £1.7m.
ØFor 2020/2021 additional proposals were being developed across portfolios to mitigate the possible residual funding gap should they be required – further information would be known following the announcement of the draft local government settlement.
Budget Papers - the Leader of the Labour Group referred to the delay in the announcement of the local government settlement and asked when Members could expect to receive the detailed budget papers containing the Strategic Business Reviews that were to be progressed and when the formal budget meeting of Council would be taking place as there needed to be sufficient time provided for Members to scrutinise this information.
The Chief Officer Resources confirmed that whilst details of the proposals had been presented to Scrutiny there would be a need for further work to be undertaken between 16th December (the date of the draft local government settlement announcement) and the New Year. The officer said that she anticipated that the budget report would be available to be considered by Joint Scrutiny and then Council towards the middle to the end of January 2020 and predicted that the Council Tax Setting meeting would take place towards the end of February 2020.
School Balances - a Member referred to paragraph 6.6 of the MTFS where it was reported that school balances during 2018/2019 had increased overall by £774,000 and that this was attributed to the specific grants that schools received during the year. The Member continued by stating that whilst he agreed that part of this was attributed to specific grants received, he said that a large part of this overall increase could be attributed to the good work that the schools were doing in managing their budgets especially as they worked on a 3-year budget plan and Welsh Government worked on an annual plan. The Member concluded by requesting that the tremendous work undertaken by schools be recognised and noted within the document accordingly.
The Chief Officer Resources accepted that schools and school governing bodies were working hard to maintain financial resilience. The comment contained within paragraph 6.6 referred to the cumulative reserves position and pointed out that without this additional funding provided by the specific grants the cumulative balance would have reduced by the end of the year. The Chief Officer undertook to incorporate the comments referred to by the Member within the document.
Pupils Demographics - a Member referred to the increase in pupil numbers by 35 as at September 2019 and the large amount of additional funding requirement of £395,000 that had been included as a growth item to address this and said that he anticipated that this would have been a lower figure as the cost for an additional pupil was approximately £4,000.
The Chief Officer Resources said that the information received predicted that as at end of September there would be 35 additional pupils in schools. As a result of this information it had been recognised that funding for the ISB (Individual Schools Budget) would need to be increase by approximately £385,000 and this cost pressure had been included as a growth item within the MTFS.
Conclusion - the Leader of the Council advised that the report had been considered by the Corporate Overview Scrutiny Committee and the Trade Unions had confirmed that they were content with the direction of travel. The concern raised in relation to the cumulative reserves were noted and the lack of scrutiny of previous reports had been addressed. It was noted that this was a fluid and proactive strategy which would be amended upon receipt of further information regarding the local government settlement. The Leader concluded by proposing that Option 1 be endorsed.
Upon a vote being taken it was unanimously,
RESOLVED, subject to the foregoing, that the report be accepted and Option 1 be endorsed, namely that the:
- Medium Term Financial Strategy be approved.
- Forecast funding gap for the period of the Medium Term Financial Strategy be noted.
- Proposals within the Strategic Business Reviews be approved.