Agenda item

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

The report of the Director of Function (Resources)/Section 151 Officer incorporating the draft Revenue Budget for 2021/22 was presented for the Executive’s consideration.

Councillor Robin Williams, Portfolio Member for Finance reported that the Revenue Budget for 2020/21 i.e. the current financial year was £142.146m. For 2021/22 a number of known committed changes are likely to affect the budget and these are detailed in section 3 of the written report and they include variations in pupil numbers, payments to the North Wales Growth Bid, historic Pension costs and investment in Information technology. The most significant change is the increased cost of the new Refuse Collection and Street Cleansing Contract with Biffa which is £909k above the current budget. Taking into account all the adjustments and assumptions as set out in Section 3, the standstill budget for 2021/22 totals £147.076m, an increase of £4.930m on the 2020/21 final budget. An increased provisional settlement from Welsh Government will meet £3.821m of the increased costs leaving a funding shortfall of approximately £1m to be funded through Council Tax.

The standstill budget of £147.076m would allow the Council to maintain its existing services; however the Council faces new budget pressures and new demands for services which have not been allowed for in the budget. These pressures and demands – some of which are in services that have suffered reductions during austerity - have become more apparent as the Council has responded to the Covid pandemic. The priority areas identified as requiring additional funding are detailed in section 10.6 of the report and encompass reinstatement of the professional trainee programme; strengthening Public Protection capacity; Education Inclusion; IT support for schools; management of tourism and climate change. Having considered the standstill budget and in light of the fact that an increase of 2.55% is mainly required to fund the increase in the cost of the new refuse collection contract, an additional rise of 1.2% in the Council Tax has been considered as a means of funding the additional budget pressures and demands. An additional increase of 1.2% above the level required to fund the standstill budget (Table 4 at para. 9.2 refers) would generate an additional £494k in funding. It is therefore proposed that the Council Tax be increased by 3.75% which translates to a 94p weekly increase for a Band D property.

The Director of Function (Resources)/Section 151 Officer highlighted the following risks to the budget –

•           Uncertainty in respect of the potential pay awards for the two main groups of local government workers – teachers and NJC staff. Although a pay freeze for all public sector workers (excluding NHS) earning over £24,000 was announced in November, 2020 with the award for those earning less than £24,000 being at least £250, the pay award for local government workers NJC staff is set not by the UK Government but by the body which represents local government employers. In addition, the setting of the annual teachers’ pay award has been devolved to the Welsh Government. A 1% increase has been allowed in the standstill budget for pay inflation for teachers’ pay and for NJC staff pay.

•           A provision has been put into the budget for the Council Tax Reduction Scheme equivalent to the proposed 3.75% increase in Council Tax. However, there is no funding available in the budget should the number of claimants increase significantly. Welsh Government has been providing additional support this year to meet the cost of the rise in demand on the scheme due to the impact of Covid 19 and it is understood that this support will be available next year if applications under the scheme increase significantly.

•           No provision had been made in the budget for Covid related costs. Welsh Government has to date met the increased costs faced by the Council  as a result of the pandemic as well as providing reimbursement for loss of income and this arrangement will continue until the end of the current financial year. In indicating that it will be publishing the arrangements for the next financial year Welsh Government has made it clear that additional funding will be made available to the Council but at what level remains to be seem. It is anticipated that Welsh Government will fund ongoing additional costs incurred as a result of Covid and will make good any loss of income that the Council may suffer due to enforced closure of its facilities from April onwards.

In thanking the Finance Service for the information and report compiled in a tight timescale since the announcement of the provisional Local Government settlement on 22 December, 2020, the Executive welcomed the recognition in the draft budget of the key role of Public Protection in the pandemic as well as the investment in a trainee programme to develop the next generation of local government professionals. In response to a request by Councillor Carwyn Jones, the Director of Function (Resources)./Section 151 Officer provided a synopsis of the  Council Tax Reduction Scheme  with regard to how the scheme works, who it is for and the application process.

It was resolved to approve the following –

·        The Budget adjustments included in the Standstill Budget as set out in Paragraphs 4 to 7 of the report.

·        The standstill budget for 2021/22 of £147.076m and this should form the basis of the 2021/22 revenue budget.

·        A proposed increase in Council Tax for 2021/22 of £3.75% which will be subject to public consultation.

·        Additional proposed budget amendments as set out in Table 5 of the report.

·        An initial proposed budget for 2021/22 of £147.531m

·        That the Executive should seek the opinion of the public on the proposed budget proposal and Council Tax rise for 2021/22.