Agenda, decisions and minutes

The Chair welcomed Mr Aaron Evans to his first meeting of the Executive in his new role as Director of Education, Skills and Young People.

There were no apologies for absence.

To receive any declaration of interest from any Member or Officer in respect of any item of business.

There were no declarations of interest.

No urgent matters at the time of dispatch of this agenda.

None were reported.

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 Treasury Management Strategy Statement for 2025/26 was presented for the Executive’s consideration.

The report was introduced by Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance and Housing who explained that the Council is required to produce and publish an annual Treasury Management Strategy Statement (TMSS) before the start of each financial year and in doing so has to have regard to the requirements of the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice. The TMSS outlines the Council’s approach to managing borrowing, investment and cash flow in the forthcoming year and sets out the proposed prudential and treasury indicators which ensure that the Council’s borrowing and investments are managed responsibly. Councillor Robin Williams confirmed that the TMSS for 2025/26 was scrutinised and subsequently recommended by the Governance and Audit Committee at its meeting on 11 February, 2025.

The Director of Function (Resources)/Section 151 Officer advised that the Council’s investment strategy remains unchanged for 2025/26 in prioritising the security and liquidity of deposits over yield. In terms of borrowing the Council has for some years been using its cash reserves to finance capital expenditure instead of taking out external loans because with interest rates relatively high it has been more cost effective to do so. However, it is envisaged that over the lifetime of the strategy the continued use of reserves to balance the revenue budget and the use of the HRA to fund capital expenditure will reduce the Council’s cash balances significantly meaning there will be less scope both to borrow internally and to invest and an increased level of external borrowing will have to be undertaken in order to fund the Council’s capital programme.  This is reflected in Table 7 of the strategy which shows the anticipated levels of internal and external borrowing in the years to 2028/29. The Prudential Indicators at Appendix 11 ensure that the Council’s borrowing is affordable and remains within the set boundaries.

The Executive acknowledged the report and the work associated with it and also recognised the importance of the strategy in ensuring that the Council’s resources are handled sensibly and sustainably and that the Council does not overextend itself in meeting its capital expenditure needs.

It was resolved to note the Treasury Management Strategy for 2025/26 and to recommend its approval by the Full Council.

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

The report of the Director of Function (Resources)/Section 151 Officer setting out the detailed revenue budget proposals for 2025/26 for the Executive’s final review and agreement along with the updated Medium Term Financial Strategy were presented.

The report was presented by Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance and Housing who recapped on the background saying that based on an initial settlement which provided a 3.6% increase for Anglesey the Executive proposed an initial draft budget for 2025/26 of £195.234m which included the use of £2m of the Council’s general balances, budget reductions of £699m and a 9.5% increase in Council Tax. Due to time limitations, a short public consultation on the proposal was held the outcome of which is summarised in Appendix 3 to the report. The final Welsh Government settlement announced on 20 February 2025 has included a floor of 3.8% which has resulted in an additional £277k for Anglesey. The Council will also receive a share of a further grant to help councils in Wales meet adult service social care costs. Councillor Robin Williams said that in light of the additional funding and taking into account the responses from the public consultation the  Executive is proposing to amend its initial budget proposals by not implementing the proposal to introduce service charges for industrial and business units, not implementing the proposal to reduce the number of days the Council’s recycling centres are open, reducing the increase in Council Tax by 1% to 8.5% (including the Fire Service Levy) and by allocating £217k to meet future costs of replacing IT equipment in schools. Councillor Robin Williams clarified that as the Executive had already made provision for Adult Services in the initial budget proposal, the grant funding can be applied elsewhere and is being utilised to help bring down the increase in Council Tax to 8.5% making Anglesey’s increase the second lowest of the North Wales councils. With the amendments, the Executive is proposing a net revenue budget of £195.443m.

The Director of Function (Resources)/Section 151 Officer explained the changes in the interim between Welsh Government’s initial and final budget settlements which included a change in the data which informs the funding allocation which although it resulted in a £34k reduction in Anglesey’s grant is offset by the additional £277k provided by the 3.8% funding floor. Subject to confirmation, Anglesey’s share of the additional grant for adult social care costs is expected to be in the region of £700k. The Section 151 Officer referred to the responses to the public consultation on the initial budget proposals some of which had favoured using the Council’s reserves over increasing Council Tax in order to meet the budget gap and some of which had commented that the Council should be managed more as a business. Using reserves to balance the budget provides a temporary solution but as reserves can only be spent once this approach is not sustainable in the long-term and does not address the fundamental funding pressures faced  ...  view the full minutes text for item 5.

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

The report of the Director of Function (Resources)/Section 151 Officer setting out the proposed capital budget and programme for 2025/26 was presented for the Executive to review prior to submission to the Full Council.

The report was presented by Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance and Housing who reported that a capital budget of £44.294m is proposed with the programme and funding as set out in the table on the opening page of the report. The capital budget can change in the course of the year as additional grants are allocated and applied for and the budget is adjusted accordingly.

The Director of Function (Resources)/Section 151 Officer referred to the link between the capital strategy, the capital budget and the treasury management strategy in providing a framework for supporting and managing the Council’s capital objectives and expenditure.  The capital budget position has long been challenging and although the General Capital Funding from Welsh Government for 2025/26 is £401k higher than the 2024/25 allocation which is the first significant increase that the Council has received for a number of years, it does not make up for the erosion in the value of the funding that has taken place due to inflation. Table 1 of the report shows the anticipated capital funding available as £32.378m against a proposed programme valued at £44m. The shortfall of £11.91m is being met through unsupported borrowing, £10.623m of which is HRA expenditure and £1.293m General Fund expenditure. While this represents a shift in strategy with the Council not previously undertaking unsupported borrowing unless the schemes invested in generate savings to cover the borrowing costs, a prudent approach is being maintained to ensure that the borrowing proposed is manageable from a revenue perspective. The borrowing is necessary to enable investment in the Council’s assets many of which need upgrading with the Welsh Government capital funding allocation not sufficient to meet those costs. Additional supported borrowing may be made available by Welsh Government for highways purposes but details are yet to be confirmed.

Councillor Douglas Fowlie, Chair of the Corporate Scrutiny Committee reported from the committee’s 19 February 2025 meeting which also considered the proposed Capital Programme and Budget for 2025/26 to confirm that having noted that there are no sources of significant capital funding available to the Council to fund any large scale projects apart from the HRA which is earmarked for HRA projects alone and cannot be used for any other purpose, the committee had supported the capital budget proposals as presented.

The Executive acknowledged the potential value of capital projects to the local workforce and companies and noted the importance of local companies tendering for capital contracts to the benefit of the local economy. The Executive also acknowledged the innovation and initiative shown by Officers in securing capital grants.

It was resolved to recommend to the Full Council the following

capital programme for 2025/26 –

                                                                                                          £’000  

2024/25 Schemes Brought Forward – General Fund           6,439

Refurbishment/Replacement of Assets                                   6,304

Heating System upgrades  ...  view the full minutes text for item 6.