Issue - meetings

To submit a report by the Head of Function (Resources)/Section 151 Officer.

It was resolved to note the contents of the Medium Term Financial Plan 2018/19 to 2020/21 and to approve the assumptions made.

The report of the Head of Function (Resources) and Section 151 Officer incorporating the Medium Term Financial Plan for 2018/19 to 2020/21 was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that the Medium Term Financial Plan (MTFP) sets out the Council’s budget strategy over the next three year period and sets out the assumptions which will be taken forward to the annual budget setting process. A number of factors makes it particularly difficult at present to forecast the future with any confidence; additionally the rescheduling of the UK Government’s main budget statement from March to November means that the budget the Welsh Government will receive will not be known until after the date on which the Welsh Government publishes its provisional settlement currently planned for 10 October, 2017.

From 2014/15 to 2016/17 the Council has seen cash reductions in the grant it receives from the Welsh Government as shown in Table 1 of the report. The trend was reversed in 2017/8 when the Council received a slightly higher settlement in cash terms. This represents an overall reduction in Aggregate External Funding (AEF) of 8.1% between the 2013/14 level and the 2017/18 level. In order to mitigate the effect of this loss, the Council has increased the Council Tax at a higher rate than inflation over the same period (Table 2 of the report) with Council Tax as a percentage of the Council’s total funding having risen to 26.6% by 2017/18. Given the uncertainty regarding the UK economy, local authorities will be expected to shoulder further reductions in funding, possibly to the extent of 3.3% in 2018/19 and 2.6% in 2019/20 – a reduction in monetary terms of £5.4m over two years in AEF.

Added to this, local government generally is facing a number of budget pressures; Anglesey will also face its own unique budget pressures which will have to be factored into the MTFP. These are detailed in section 5 of the report and as well as the National Living Wage, the Public Sector Pay Award include service specific pressures in relation to Adult Social Care, Looked After Children, School Modernisation, Highway Maintenance and funding the Corporate Plan as its implementation progresses. The budget process also examines estimated inflation over a number of different areas of expenditure some of which e.g. energy, experience higher levels than others. These are set out in section 6 of the report.

Taking into account all the known budget pressures and the inflationary and other assumptions, it is possible to determine a standstill budget for the period 2018/19 to 2020/21, the standstill budget being the revised costs of continuing to provide services to the same level, delivered in the same way as they are delivered in 2017/18. The estimated standstill budget for the next three year period is shown in Table 5 of the report.

In light of the funding gap between the estimated standstill budget (table 6) and the estimated funding available (Table 7), it is projected that savings in  ...  view the full minutes text for item 8