To submit the report of the Head of Finance.
Minutes:
Submitted – the report
of the Cabinet Member for Finance
on the Council Budget for 2019/20, providing an opportunity
for the Audit and Governance Committee to scrutinise the information in terms of its financial
propriety prior to the report
being submitted to the
Cabinet on 19 February.
The Cabinet Member
for Finance set out the background and context of the report. He explained that
all members had an input to this in workshops and that a public consultation
had taken place on the Council Tax together with the savings plans. He noted
that detailed discussions had led to the recommended budget.
The Head of Finance Department gave further
details on the content of the report, and noted that there was a financial gap
of £13 million, which included inflation costs of £7.5 million and the
inevitable demand for services of £4 million. He noted that the grant increase
from the Welsh Government to local authorities was insufficient to meet these
costs. He made reference to Appendix 2 of the report
which detailed the unavoidable financial bids to respond to the pressures on
services, total value of £2.5 million. He elaborated that the financial bids had been discussed in workshops in December where members
consented that the expenditure was inevitable. He highlighted that the 2019/20
expenditure requirements, before savings, was £253.2 million.
He noted that £2.48 million of savings had
already been approved, that £2.45 million of proposed savings, £0.5 million of
further efficiency savings, which came to a total of £5.4 million savings to
reduce the gap.
He drew attention to what was
recommended to the Cabinet for approval, namely:
"(a) To recommend to the
Council (at its meeting on 7 March 2019) that:
1.
A budget of £247,797,900 should
be established for 2019/20,
funded by a £176,551,790 Government
Grant and £71,246,110 Council
Tax income, with an increase
of 5.5%.
2.
£18,316,130 should be added
to the capital programme for spending in
2019/20 in order to establish a capital programme with a value of £34,991,250 by 2019/20 to be funded
from the sources noted in Appendix
4 of the report.
(b) To approve proceeding to implement the saving schemes list in Appendix
3, in order to establish the budget recommended to the full Council.
(c) To note the Medium
Term Financial Strategy and
the projections in Appendix 8, and adopt the plan in section 18-20."
He noted that what was
being recommended was subject to the Cabinet's decision to approve
proceeding to implement the savings schemes listed in Appendix 3, or not to
implement some schemes, as suggested in Appendix 12. He explained that if the decision
was not to implement the five
schemes in Appendix 12, the figures would change to:
·
establish a budget
of £247,869,620 for 2019/20,
·
to be funded
via a Government Grant of
£176,551,790,
·
and £71,317,830 Council Tax income with
an increase of 5.6%.
He referred to the equality impact
assessment, the well-being assessment in terms of the requirements of the
Well-being of Future Generations (Wales) Act 2015 along with an assessment of
the robustness of the risk estimations.
He highlighted that the Medium Term
Financial Strategy had been drafted, notwithstanding
considerable uncertainty about the future, mainly due to the Westminster
Government 2019 Expenditure Review. He noted that having considered the
projections that it was likely that more future savings would be required,
therefore it would be necessary to bring pressure to bear on the Welsh
Government to fund local authorities appropriately.
Members were given an opportunity
to ask questions and make observations.
During the discussion, the following main points were highlighted:-
·
Concern regarding
the impact of the annual Council Tax increase
on residents. Would it be possible to raise awareness of the Council Tax Reduction
Scheme? Was assistance available for residents
to claim a reduction?
·
What was the level
of risk in terms of specific grants?
·
Concern regarding
the consequences of financial
hardship and the impact on residents,
bearing in mind that Gwynedd was one of the poorest areas in Western Europe. It would be difficult to keep things on
an even keel
if financial austerity did not end.
·
The increase
in Council Tax was consistently higher in Gwynedd over the last six
years and Anglesey and Conwy councils proposed to increase their Council Tax
for 2019/20 by 9% to keep up with the increase
in Gwynedd. The number who had responded to the public consultation was disappointing. In consideration of the low number of responses how can a decision be made?
·
Council Tax
cannot continue to be increased with residents having to make difficult choices on how
to spend their money.
·
That members
had been given ample opportunities to contribute to the process and they were
grateful for the open discussions. The financial position would be so much
worse without the work of the Finance Department over the years, and the Welsh Local Government Association should convey a strong message to the Welsh Government in terms
of the need to fund local authorities appropriately. In order to have a balanced budget it was necessary to choose between increasing Council Tax and
cutting services.
·
The report
referred to £0.5 million of
further efficiency savings, would it be possible to note more details and time
schedule for achieving these in the report prior to its submission to Full Council? Encourage
the Cabinet to listen to the views
of members in the workshop and to not act on the five schemes
noted in Appendix 12 and consequently increase Council Tax by 5.6%.
A response was given
to the questions and observations as follows:-
·
That the Council
at its meeting on 6 December 2018 had adopted the 2019/20 Council Tax Reduction Scheme.
In accordance with Ffordd Gwynedd, staff in the
Tax Unit assisted residents with paying or clearing a debt and when
appropriate supported them to claim reductions.
·
The majority
of grants were Welsh Government grants, there was a risk due to a higher level of provision in the budget and
if the grant was terminated.
Grants received from the European Union were for specific
projects rather than to fund
services. Should a grant be
terminated, the Council would have to stop the specific provision or face the cost. The Council had to
live with the risk.
·
Agree in terms of financial hardship, one of the Cabinet's main considerations when assessing the savings schemes was their impact on
the people of Gwynedd. The only
option for the Council was to implement the savings schemes and increase Council
Tax in order
to address the financial
gap.
·
That it was a fair
point to note the number of responses to the public consultation. The people of Gwynedd were given an opportunity
to voice their opinion on two
occasions, with a consultation on what was important for the people of Gwynedd as well
as the consultation on the savings schemes. In a representative democracy system Council members represented their electors. The majority of members in a workshop noted
that some of the savings schemes should be re-visited and these specific
schemes would be considered by the Cabinet prior to determining
a recommendation to the Full
Council.
·
Whilst Council
Tax in Gwynedd Council was the sixth highest in Wales, this stemmed mainly
from the grant allocation split on reorganisation
in 1996 as it did not reflect
the expenditure split at
the time. Evidence indicates that the increase in Council
Tax in Gwynedd Council has been
less than in 14 other Councils in Wales over the period and shows
that it was not the decisions
of Gwynedd Council that meant it was sixth highest, but what
had occurred at reorganisation
in 1996.
·
That it was legislatively
necessary for the Council to have a balanced budget, the only options available
to the Council to fund the
gap was to implement savings
schemes and increase Council Tax. Welsh Government needed to look at how local government
is funded as the position
of councils was getting
more difficult. That what was recommended in terms of the budget was fairly acceptable for 2019/20, however, the 2021/22 financial position was dependent on the Welsh Government.
·
In terms of further efficiency savings, that there
were ideas on how to realise
further efficiency savings and it was trusted that it was possible to achieve, however, no details
could be given as it was a sensitive situation in terms of jobs.
·
It was confirmed
that the five savings schemes noted in Appendix
12 would receive consideration in the Cabinet's discussions on 19 February.
An appreciation
of the work of the officers in the Finance Department, the Cabinet Member for
Finance and the Chief Executive was noted.
RESOLVED to note and accept the report and the relevant risks.
Supporting documents: