Agenda item

To submit the report of the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the Medium-Term Financial Plan (MTFP) 2020/21 to 2022/23 was presented for the Executive’s consideration. The MTFP sets out the Council’s likely resource requirements for the next three financial years and details how the Council plans to balance the resource requirement with the funding available.

The Portfolio Member for Finance reported that the MTFP has been finalised during a period of uncertainty surrounding the UK economy and the impact on future levels of public expenditure. The uncertainty makes it all the more imperative that Welsh Government should make a timely announcement about its indicative financial settlement for local authorities for next year and beyond especially now that it is clearer about its own position following Central Government’s Spending Review the outcome of which was made known on 4 September, 2019. It is also essential in view of the continuing pressures on local government, that the funding settlement for councils is a fair one. 

The Director of Function (Resources)/Section 151 Officer advised that it had been Central Government’s intention to undertake a 3-year Comprehensive Spending Review during the summer, 2019 but this was postponed in favour of a 1-year Spending Review held on 4 September which included the announcement of £600m additional funding for Welsh Government in 2020/21. However, when Central Government promises additional funding for schools etc. it does not necessarily mean that the extra cash will find its way to schools in Wales since how the money is allocated depends on the Welsh Government’s spending plans and priorities and until those are known, it is difficult to plan ahead with any certainty. The MTFP is therefore based on the information held at the end of the summer, but given that Welsh Government will receive extra funding, the situation may change for the better. Local Government is facing a number of budget pressures with the Council in Anglesey facing its own unique budget pressures (para 5.1 (i) to (x) of the report refers).The Welsh Local Government Association recently published a Paper “Resourcing Local Services in 2020/21” which details the impact of austerity on local government in Wales and sets out the budget pressures that councils across Wales are generally trying to grapple with (paper attached at Appendix 2 to the report). Given the financial context it is inevitable that the Council will again have to find significant savings in 2020/21 unless Welsh Government releases additional funds for local government to help make up the funding gap. The MTFP at Table 6 postulates a best and a worst-case scenario under which the Council would have to identify a total of £6m or £8.4m of savings respectively over the next 3-year period. This process has begun with savings to the value of £1m already identified. In the past the Council has managed to set a balanced budget without having to rely on the use of general balances by finding efficiency savings across service budgets whilst still protecting the budgets for schools and increasing the budget for Children’s Services. In the next three years however, the scope to generate the required level of savings by efficiency measures is considerably less thereby making cuts to services more likely.   

The Executive in considering the report, acknowledged that the financial outlook for the council remains challenging and that delivering savings on the scale required on an ongoing basis is becoming increasingly difficult without having a direct impact on services or raising the Council Tax by a significant amount neither of which is desirable.  The Executive agreed that there should be concerted lobbying of Welsh Government by councils for their fair share of the extra money from Central Government in order to help support the continued delivery of essential local services for which the Council is responsible – including for schools, for the vulnerable and for those in need of care or are in difficult circumstances.

It was resolved to note the contents of the Plan and to approve the assumptions made therein.