Issue - meetings

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

It was resolved –

·        Not to allocate the two grants incorporated into the AEF to the budget of the relevant services as the additional costs have been allowed for in the standstill budget.

·        To approve the standstill budget for 2019/20 of £137.402m and that this should form the basis of the 2019/20 revenue budget.

·        That the Executive determine the proposed increase in the Council Tax for 2019/20 which will be subject to public consultation.

·        That after allowing for the proposed increase in Council Tax, the Executive should seek to make sufficient savings in 2019/20 to balance the revenue budget without resorting to the use of general reserves and to ensure that the required savings in 2019/20 are achievable.

·        That the Executive should seek the opinion of the public on the proposed savings.

The report of the Head of Function (Resources) incorporating the draft Revenue Budget for 2019/20 was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that setting the Revenue Budget for 2019/20 was always going to be a challenge - this task has become yet more difficult after the disappointing provisional settlement which Anglesey has received from Welsh Government which has left the Council with a funding gap of approximately £7m (before any savings and Council Tax increase are taken into account). The Council is therefore facing having to make some very difficult decisions. Although services have identified a total of £3.747m savings to date, the current 2018/19 budget is forecast to overspend due mainly to pressures on Children’s Services, and this will have to be funded from general reserves meaning that the Council’s balance of general reserves will reduce further to below the minimum recommended balance. The Portfolio Member said that the provisional budget including the list of proposed savings in Appendix 4 as well as the level of Council Tax increase will be subject to public consultation. The impact of various levels of Council Tax increase is shown in the table at section 10.2 of the report with options to increase the Council Tax by between 5% and 10% being considered. The financial situation going into 2019/20 is difficult and savings will have to be implemented as will a significant increase in the Council Tax. The exact level of increase is dependent also on whether Welsh Government passes on any or some of the extra funding which it received in the Chancellor’s Budget to local government and if so, what will be Anglesey’s share of this money.

The Head of Function (Resources)/Section 151 Officer said that the first step in setting the Revenue Budget for 2019/20 is to create standstill budget i.e. a budget required to  provide the same level of service as in 2018/19 but adjusted for any known or committed changes (e.g. increase or decrease in costs) – the main changes are detailed in sections 3 and 4 of the report -  and after adjustments for staffing changes and pay and price inflation which are detailed in sections 5 and 6 of the report. However, in order to ensure that the budget provides a realistic level of funding, additional changes are required to reflect the current demand and any additional known budget pressures - especially in Children’s Services to support the increasing number of children in care, and as a result of that, in Education Out of County fees as outlined in section 7 of the report. The Officer pointed out that the Welsh Government has transferred two grants (Teachers’ Pay Grant and Free School Meals Grant) that it intends to award Councils in 2018/19 into the settlement in 2019/20. For the reasons given in paragraph 7.5 of the report it is recommended that these two grants are not transferred into the service budgets but are treated as additional general funding.

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