Agenda item

Medium Term Financial Strategy and Budget 2019/20

(a)    Revenue Budget 2019/20

 

To submit a report by the Head of Function (Resources)/Section 151 Officer, as presented to the Executive on 18 February, 2019.

 

(b)   Capital Budget 2019/20

 

To submit a report by the Head of Function (Resources)/Section 151 Officer, as presented to the Executive on 18February, 2019.

 

(c)   Treasury Management Strategy Statement 2019/20

 

To submit a report by the Head of Function (Resources)/Section 151 Officer, as presented to the Executive on 18February, 2019.

 

(ch)  Council Tax Setting

 

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

 

(d)    Amendment to the Budget

 

To submit the following amendments to the Budget proposed by the Anglesey Independents Group, of which notice has been received under Paragraph 4.3.2.2.11 of the Constitution as follows:-  

 

‘The Anglesey Independents Group would wish to propose an increase                   of 5% in the Council Tax for the financial year 2019-2020.

 

This will be achieved by :-

 

·      not filling the vacant post of Assistant Chief Executive – saving £100,000;

·      reducing the number of Members on the Executive from 9 to 7 – saving £26,464;

·      delay the construction of the Gypsy and Travellers Site at Star – saving £33,600 in Capital Financing Charges;

·      reducing the Council Tax Reduction Scheme Budget is a consequence of setting a lower Council Tax than proposed by the Executive – saving £225,000;

·      to set the Council Tax increase at 5%.  This would take the Band D charge to £1,197.18 an annual increase of £56.97;

·      to increase the premium on Empty Houses to 35% rather than the 100% proposed by the Executive;

·      the reduction in Council Tax and the Empty Houses Premium would reduce funding through Council Tax by £1,950,449 and this would be funded by reducing expenditure by £385,449 (see above) by using £1m from earmarked reserves and by using £565,000 of general balances;

·      if additional funds are made available for pension provision, these will be transferred back into general balances.’

(Note : All the above papers need to be considered as a single package).

 

 

 

 

 

Minutes:

The Portfolio Holder for Finance presented the Executive’s proposals for the Revenue and Capital budgets 2019/20, Treasury Management Strategy Statement and setting the Council Tax – items 7(a) to (ch) within the Agenda. He said that the budget was the most challenging budget the Council had to deliver. The initial budget process was entered into in June 2018 with individual reviews of all the services within the Council taking place.  The services were challenged to identify £5m savings in accordance with the Medium Term Financial Plan.    Numerous workshops took place during October with services submitting their savings proposals for consideration with all Members of the Council invited to attend.  The total savings proposals submitted amounted to £3.747m.  A public consultation was undertaken from the 15 November to 31 December, 2018 concentrating on the 15 main savings proposals.    He said that he appreciated the response to the public consultation and the highest number of responses had been received by the Council in regard to the budget setting process.    He noted that 6 meetings were convened with various groups and stakeholders to discuss the proposed savings and to gauge their opinions.  The strong message from these meetings was that education budgets need to be protected to afford the best possible education in schools.  A report was submitted to the Corporate Scrutiny Committee on the 4th February, 2019 where the Chair reported back to the Executive on 18th February, 2019.

 

He also noted that if the Council should not set a prudent budget at today’s meeting, then the Council might face significant financial problems as was reported by the Head of Function (Resources)/Section 151 Officer at the Executive meeting on 18th February, 2019.  The Council must set a budget that strengthens the Council’s financial position and most importantly protecting the services that the most vulnerable people are reliant upon which are adults services, children’s services and education.  The dire financial position local government authorities across the UK are facing is the result of the UK Government’s austerity policies.  Welsh Government has also cut local government settlements; local authorities in North Wales and Powys have seen a reduced budget settlement from Welsh Government but South Wales local authorities having seen an increase within their local government settlements.   He noted that an increase in staff pay awards and teachers’ pensions and the increase in the Fire Authority precept has put pressure on the budget. The Portfolio Holder said that the authority does not have sufficient financial reserves to allow reserves to be used as a short term funding source.  He noted that the Head of Function (Resources)/Section 151 Officer reported at the meeting of the Executive held on 18th February that the level of general reserves has reached a critical point and should not be allowed to decrease any further.  He further said that the Auditor General in his letter dated 5th February, 2019 to this Council outlined that it is not sustainable to depend on reserves to support the increased costs of the services.  As a result, the recommendation of the Executive to the full Council was to increase the Council Tax by 9.5% which will enable the authority to reduce the financial cuts to the education services from £1.7m to £626k.  Also, if financial funding is received by the UK Government towards funding the increase of teachers’ pensions contribution (which has been already budgeted for within the budget) half of the amount received will be used to further reduce the reduction to school budgets.   

 

The Portfolio Holder for Finance expressed that the 9.5% Council Tax increase will be difficult for the residents of Anglesey but it is the prudent option available in these difficult situations.  The average Council Tax for each household will see an increase of £2 per week in order to protect the most important services i.e. children’s services, adult services and education.  However, following this increase the Council will remain with the second lowest council tax rate in North Wales. 

 

(d)  Amendment to the Budget

 

The following amendment was received to the Budget proposed by the Anglesey Independents Group, of which notice has been received under Paragraph 4.3.2.2.11 of the Constitution as follows :-

 

‘The Anglesey Independents Group would wish to propose an increase of 5% in the Council Tax for the financial year 2019-2020.

 

This will be achieved by :-

 

·    not filling the vacant post of Assistant Chief Executive – saving £100,000;

·      reducing the number of Members on the Executive from 9 to 7 – saving                         £26,464;

·      delay the construction of the Gypsy and Travellers Site at Star – saving   £33,600 in Capital Financing Charges;

·      reducing the Council Tax Reduction Scheme Budget is a consequence of      setting a lower Council Tax than proposed by the Executive – saving £225,000;

·      to set the Council Tax increase at 5%.  This would take the Band D charge to £1,197.18 an annual increase of £56.97;

·      to increase the premium on Empty Houses to 35% rather than the 100%        proposed by the Executive;

·      the reduction in Council Tax and the Empty Houses Premium would reduce funding through Council Tax by £1,950,449 and this would be funded by reducing expenditure by £385,449 (see above) by using £1m from earmarked reserves and by using £565,000 of general balances;

·      if additional funds are made available for pension provision, these will be transferred back into general balances.’

 

Councillor Robert Ll Jones, Shadow Portfolio for Finance said that the Ruling Group wishes to raise the Council Tax the highest this Council has ever faced.  The amendment to the budget proposed by the Opposition Group would propose an increase in the Council Tax of 5% rather than the 9.5% proposed by the Ruling Group.  He said that the interest rates are low and Council Tax increases should be kept below the inflation rate.   He urged the Council to reject the budget before the full Council. 

 

Councillor Bryan Owen seconded the amendment.

 

The Chair asked the Head of Function (Resources)/Section 151 Officer to respond to the amendment before the full Council and whether it complied with the required Act in setting the Council Tax budget.

 

The Head of Function (Resources)/Section 151 Officer referred to the Local Government Financial Act 1992.  The Act requires the Council to ensure that the Council produces a budget that is fully funded through Revenue Support Grant, Non Domestic Rates, Reserves and Council Tax.  He noted that the amendment submitted by the Opposition Group produces a budget which is fully funded and as a result the proposed complies with requirements of the Act in this respect.  He further stated that as a Section 151 Officer he has a duty under Section 25 of the Local Government Act 2003 to make an assessment of the budget and to report on the robustness of budget estimates and the adequacy of the proposed financial reserves.   The assessment of the recommendation by the Executive at its meeting held on 18th February, 2019 is contained in Part 6 of the report before the full Council.  The proposal by the Opposition Group reduces the expenditure by £385k which equates to 0.28% of the net expenditure.   This change in expenditure is not significant and does not alter the Section 151 Officer’s opinion on the robustness of the budget proposed by the Opposition.   The Act also requires the Section 151 Officer to make an assessment of the general reserves which is contained in Part 8 of the report.  The Head of Function said that in his professional opinion the general reserves of the Council are too low and the minimum balances should be £6.7m.  The estimated balance at 31 March, 2019 for general balances is £4.6m which is over £2m lower than the calculated minimum.  The Officer said that he accepted that in the current financial situation it is not possible to budget for budget surplus in order to bring the general reserves back to the required level and it will take up to 3 to 5 years to bring the reserves to the expected level.  The amendment to the budget submitted has a level of risk to the general reserves and he noted that he had discussions with the Opposition Group and thereafter an email outlining the risks to using general reserves was circulated to the Opposition Group; the email was read out to the full Council. 

 

The Leader of the Council responded to the amendment to the budget by the Opposition Group as regard to not filling the vacant post of Assistant Chief Executive – saving £100,000.  Discussions are currently been undertaken through the Appointments Committee as to the vacant post of the Assistant Chief Executive (Governance and Business Process Transformation).  Reducing the number of Members on the Executive from 9 to 7 – saving    £26,464.  She said that she had made a decision to increase the membership of the Executive; the membership is of broad experience of different background and experience. The Executive is continuing to strive to secure employment opportunities on the Island.  She noted that she has no intention of reducing the membership of the Executive.  Delay the construction of the Gypsy and Travellers Site at Star – saving £33,600 in Capital Financing Charges.  Identifying sites for Gypsy and Travellers is a statutory duty within the Wales Housing Act 2014.

 

Reference was made by a Member to the increase the Council is facing as regards to the teachers’ pension contribution which totals £800k.  He said that if the UK Government is to contribute towards the increase in teachers’ pension contribution in England then funding should be made available by Welsh Government to local authorities to fund the increased.  He further said that he wished to see the children of the Island having the best possible education and said that he supported the recommendation by the Executive to reduce the financial cuts to the education services from £1.7m to £626k.

 

The Opposition Group outlined the following issues as regards to setting the budget for 2019/20:-

 

·        The 9.5% will have a dire effect on the residents of the Island with people already having to face increase in energy bills;

·        The loss of employment recently on the Island will have a dire effect on those whom have been affected;

·        There is £9m allocated within the earmarked reserves – i.e. £620k unused within IT projects and over £1.25m within the insurance funds;

·        Delaying the construction of the Gypsy and Travellers site should be prioritised when funds are available;

·        The ruling group has mentioned that the Council Tax may see an increase at the same level next year as well;

·        The increase in the empty homes of 100% should be reconsidered as it will have an effect on local communities;

·        Reference was made that the education budget is over £48m and the contribution received from WG is £52m.  If education had received all of WG’s contribution there would be no need to safeguard the budget of the service;

·        There has been continued over-spend within the Social Services Department with 1% of Education funding being transferred to Social Services budget last year;

·        The Council should take advantage of offers from  successful private sector companies on the Island who have afforded their services to attend briefing sessions to support and give guidance;

·        The sale of the Council’s assets needs to be managed better and promptly.

 

The Leader of the Council referred to the reference made by the Opposition Group as regards to the earmarked reserves and said that the part of the money within these reserves is to support vulnerable people i.e. £100k within the earmarked reserves for  Supporting People (support for domestic violence which is on an increase within the region) - the Police & Crime Commissioner North Wales has expressed that local authorities needs to increase resources to tackle domestic violence which is a regional objective;  £120k within the earmarked reserves - Corporate Vulnerable Persons budget.

 

The Leader said that many of the services within the Council face increasing demand at a time when there are less resources, none more than Social Services which cares for the most vulnerable in society. 

 

Following further deliberations, it was agreed that a vote be undertaken as regards to the amendment to the budget proposed by the Opposition Group.

 

In accordance with paragraph 4.1.18.4 of the Constitution the Opposition Group requested that a recorded vote be taken on the proposed amendment.    The required number of members requesting a recorded vote was not reached.

 

In the ensuring vote, it was RESOLVED not to support the amendment to the budget.

 

Councillor A M Jones wished it be recorded that the Opposition Group had proposed that the Council Tax be increased by 5%.

 

The Portfolio Holder for Finance said that pressure needs to be brought on Welsh and Central Governments for fairer settlement for local government.   He proposed the budget to the Council and the recommendations contained at (a) and (ch) within the reports.  The Leader seconded the proposal.

 

In the ensuring vote, it was RESOLVED :-

 

·      To accept the budget proposals and Treasury Management Strategy as presented for 2019/20;

 

·    To accept the draft Council Tax Resolution as (ch) in the Agenda :-

 

1.   (a)  Pursuant to the recommendations of the Executive, to adopt the Medium   Term Financial Plan at Section 11 Medium Term Financial Plan and 2019/20 Budget at Section 9, as a Budget Strategy within the meaning given by the Constitution, and to affirm that it becomes part of the budget framework with the exception of figures described as current.

(a)   Pursuant to the recommendations of the Executive, to adopt a revenue budget for 2019/20 as shown at Appendix 4 Medium Term Financial Plan and 2019/20 Budget.

(c) Pursuant to the recommendations of the Executive, to adopt a capital budget as shown in the Capital Budget Report 2019/20 report.

 

(ch)  To delegate to the Head of Function (Resources) the power to make adjustments between headings in Appendix 4 Medium Term Financial Plan and 2019/20 Budget in order to give effect to the Council’s decisions.

 

(d)   To delegate to the Executive Committee, for the financial year 2019/20, the powers to transfer budgets between headings as follows:-

 

(i)  unlimited powers to spend each budget heading in Appendix 4 Medium Term Financial Plan and 2019/20 Budget against the name of each service, on the service to which it relates;

 (ii) powers to approve the use of service and earmarked reserves to fund one-off spending proposals that contribute to the delivery of the Council’s objectives and improve services;

 

(iii) powers to vire from new or increased sources of income.

 

(dd)   To delegate to the Executive Committee, in respect of the financial year   2019/20 and on the advice of the Head of Function (Resources), the power to release up to £500k from general balances to deal with priorities arising during the year.

 

(e)  To delegate to the Executive Committee in respect of the period to 31 March 2020, the following powers:-

 

(i)  powers to make new commitments from future years’ revenue budgets up to amount identified under New Priorities in the Medium Term Financial Plan;

 

(ii)  the power and the duty to make plans for achievement of revenue budget savings implied by the Medium Term Financial Plan;

 

 (iii)  powers to transfer budgets between capital projects in the Capital  Budget Report 2019/20 report and to commit resources in following years and consistent with the budget framework.

 

(f)  To set and approve the prudential and treasury indicators which are estimates and limits for 2019/20 and onwards as shown in the report on Treasury Management Strategy Statement 2019/20.

 

(ff) To approve the Treasury Management Strategy Statement for 2019/20.  

 

(g)  To confirm that items 1(b) to (ff) become part of the budget framework.

 

2.   RESOLVEDto adopt and affirm for the purposes of the financial year 2019/20 the decision of the County Council on 10 March 1998 to set the discount level applicable to the prescribed Class A and prescribed Class B of dwellings under Section 12 of the Local Government Finance Act 1992 (as amended), as described by the Council Tax (Prescribed Classes of Dwellings) (Wales) Regulations 1998, as follows:-

  

  Prescribed Class A        Nil Discount

  Prescribed Class B        Nil Discount

 

3.  RESOLVED to adopt and affirm for the purposes of the financial year 2019/20 the decision of the County Council on 6 March 2007 to set the discount level applicable to the prescribed Class C of dwellings under Section 12 of the Local Government Finance Act 1992 (as amended), as described by the Local Authorities (Calculation of Tax Base) and Council Tax (Prescribed Classes of Dwellings) (Wales) (Amendment) Regulations 2004 as follows:-

 

         Prescribed Class C       Nil Discount

 

4.  RESOLVEDto disapply any discount(s) granted to long-term empty dwellings and dwelling occupied periodically (usually known as second homes) and to vary the Full Council’s decision made on 28 February 2018 and apply for the financial year 2019/20 a higher amount of Council Tax (called a Council Tax Premium) of 100% of the standard rate of Council Tax for long-term empty dwellings and for dwellings occupied periodically (usually known as second homes) to apply a higher amount of Council Tax (called a Council tax Premium) of 35% under Sections 12A and 12B of the Local Government Finance Act 1992 as inserted by Section 139 of the Housing           (Wales) Act 2014.

 

5.  That it be noted that at its meeting on 28 February 1996 the Council resolved not to treat any expenses incurred by the Council in part of its area or in meeting any levy or special levy as special expenses and that the resolutions remain in force until expressly rescinded.

 

6.  That it is noted that a resolution of the Executive on 26 November 2018 approved the amount calculated by the Isle of Anglesey County Council for its council tax base for 2019/20 and to further note that the full Council in its meeting on the 11 December 2018 approved that the local Council Tax Reduction Scheme will continue unchanged for 2019/20.  It is also noted that the full Council on 28 February 2018 adopted and approved a local Council Tax Discretionary Policy under section 13A of the Local Government Finance Act 1992, delegating to the Executive the power to revoke, re-enact and/or amend the Policy.

 

7.  At its meeting on 26 November 2018, the Executive, in accordance with the Local Government Finance Act 1992 and the Local Authorities (Calculation of Council Tax Base)(Wales) Regulations 1995 (SI19956/2561) as amended by SI1999/2935 and the Local Authorities (Calculation of Council Tax Base) and Council Tax (Prescribed Classes of Dwellings)(Wales) Amendment) Regulations 2004 and the Local Authority (Calculation of Taxbase) (Wales) (Amendment) Regulations 2016 resolved to approve the amounts calculated by the Isle of Anglesey County Council as its tax base and for the parts of the area, for the year 2019/20, as follows:-

 

a)    31,571.46 being the amount approved by the Executive as the Isle of Anglesey County Council’s council tax base for the year.

 

b)   The parts of the Council’s area, being the amounts calculated by the Executive as the amounts of the Isle of Anglesey County Council’s council tax base for the year for dwellings in those parts of its area to which one or more special items relate, are as follows:-

 

 

Amlwch

1,506.32

 

Beaumaris

1,095.94

 

Holyhead

3,927.52

 

Llangefni

1,965.35

 

Menai Bridge

1,443.42

 

Llanddaniel-fab

379.48

 

Llanddona

400.39

 

Cwm Cadnant

1,171.95

 

Llanfair Pwllgwyngyll

1,323.32

 

Llanfihangel Ysgeifiog

693.04

 

Bodorgan

459.96

 

Llangoed

663.77

 

Llangristiolus & Cerrig Ceinwen

632.10

 

Llanidan

421.79

 

Rhosyr

1,027.19

 

Penmynydd

246.31

 

Pentraeth

571.10

 

Moelfre

631.10

 

Llanbadrig

696.84

 

Llanddyfnan

508.21

 

Llaneilian

579.31

 

Llannerch-y-medd

532.02

 

Llaneugrad

185.47

 

Llanfair Mathafarn Eithaf

1,871.09

 

Cylch y Garn

403.68

 

Mechell

565.96

 

Rhos-y-bol

484.57

 

Aberffraw

302.95

 

Bodedern

430.87

 

Bodffordd

414.40

 

Trearddur

1,303.70

 

Tref Alaw

266.72

 

Llanfachraeth

231.49

 

Llanfaelog

1,298.09

 

Llanfaethlu

293.54

 

Llanfair-yn-Neubwll

565.06

 

Valley

993.83

 

Bryngwran

365.99

 

Rhoscolyn

360.99

 

Trewalchmai

356.63

 

 

8.  That the following amounts be now calculated by the Council for the year 2019/20, in accordance with Sections 32 to 36 of the Local Government Finance Act 1992:-

 

a)      £193,484,077      being the aggregate of the amounts which the Council estimates for the items set out in Section 32(2)(a) to (d) of the Act.

 

b)      £56,832,650        being the aggregate of the amounts which the Council estimates for the items set out in Section 32(3)(a) and (c) of the Act.

 

c)      £136,651,427      being the amount by which the aggregate at 8(a) above exceeds the aggregate at 8(b) above, calculated by the Council, in accordance with Section 32(4) of the Act, as its budget requirement for the year.

 

ch)    £  95,791,012      being the aggregate of the sums which the Council estimates will be payable for the year into its council fund in respect of redistributed non-domestic rates, revenue support grant and specific grant, reduced by any amount calculated in accordance with Section 33(3) of the Act.

 

d)      £     1,294.22       being the amount at 8(c) above less the amount at 8(ch) above, all divided by the amount at 7(a) above, calculated by the Executive, in accordance with Section 33(1) of the Act, as the basic amount of its council tax for the year.

 

dd)    £   1,441,310       being the aggregate amount of all special items referred to in Section 34(1) of the Act.

 

e)      £     1,248.57       being the amount at 8(d) above less the result given by dividing the amount at 8(dd) above by the amount at 7(a) above, calculated by the Executive, in accordance with Section 34(2) of the Act, as the basic amount of its council tax for the year for dwellings in those parts of its area to which no special item relates.

 

 

 

 

          f)

Part of the Council's area

D

 

Amlwch

£

1,314.09

 

Beaumaris

£

1,275.48

 

Holyhead

£

1,378.80

 

Llangefni

£

1,328.49

 

Menai Bridge

£

1,315.71

 

Llanddaniel-fab

£

1,272.24

 

Llanddona

£

1,264.14

 

Cwm Cadnant

£

1,275.39

 

Llanfair Pwllgwyngyll

£

1,283.31

 

Llanfihangel Ysgeifiog

£

1,274.49

 

Bodorgan

£

1,273.50

 

Llangoed

£

1,265.31

 

Llangristiolus & Cerrig Ceinwen

£

1,261.17

 

Llanidan

£

1,272.24

 

Rhosyr

£

1,274.22

 

Penmynydd

£

1,275.93

 

Pentraeth

£

1,274.76

 

Moelfre

£

1,266.75

 

Llanbadrig

£

1,287.27

 

Llanddyfnan

£

1,266.21

 

Llaneilian

£

1,270.53

 

Llannerch-y-medd

£

1,279.53

 

Llaneugrad   

£

1,270.08

 

Llanfair Mathafarn Eithaf

£

1,276.29

 

Cylch y Garn

£

1,264.86

 

Mechell

£

1,264.86

 

Rhos-y-bol

£

1,264.05

 

Aberffraw

£

1,273.32

 

Bodedern

£

1,271.70

 

Bodffordd      

£

1,273.77

 

Trearddur

£

1,275.39

 

Tref Alaw

£

1,273.86

 

Llanfachraeth

£

1,283.40

 

Llanfaelog

£

1,278.18

 

Llanfaethlu

£

1,268.10

 

Llanfair-yn-Neubwll

£

1,274.22

 

Valley

£

1,281.06

 

Bryngwran

£

1,276.38

 

Rhoscolyn

£

1,259.64

 

Trewalchmai

£

1,272.33

      

 

being the amount given by adding to the amount at 8(e) above the amounts of the special item or items relating to dwellings in those parts of the Council's area mentioned above divided in each case by the amount at 8(b) above, calculated by the Executive in accordance with Section 34(3) of the Act, as the basic amounts of its council tax for the year for dwellings in those parts of its area to which one of more special items relate.

 

 

 

 

    

 

 

 

 

 

 

 

being the amounts given by multiplying the amounts at 8(e) and 8(f) above by the number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in valuation band D, calculated by the Executive, in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

 

9.  That it be noted that for the year 2019/20, the Police and Crime Commissioner North Wales has stated the following amounts in a precept issued to the Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below:-

 

 

             

         Precepting Authority                                                           Valuation Bands

 

 

 

 

 

A

B

C

D

E

F

G

H

I

Police and Crime Commissioner North Wales

£

185.40

216.30

247.20

278.10

339.90

401.70

463.50

556.20

648.90

 

 

 

 

10.  That, having calculated the aggregate in each case of the amounts at 8(ff) and 9 above, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby sets the following amounts as the amounts of council tax for the year 2016/17 for each of the categories of dwellings shown below:-

 

 

 

 

 

 

    

 

Supporting documents: