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 setting out the detailed revenue budget proposals for the Executive’s review and agreement was presented. The Executive was asked to make final recommendations to Full Council which would then approve a budget for 2021/22 and set the level of Council Tax and its meeting on 9 March, 2021.

Councillor Ieuan Williams declared a personal interest in the item and did not take part in the voting thereon.

Councillor Robin Williams, Portfolio Member for Finance reported that the final budget proposals represent the last stage in the long process of setting the revenue budget before they are presented to the Full Council. The process has been particularly challenging this year because of the tight timescales with the provisional settlement not received until 21 December, 2020 and the final settlement announcement to be made on 2 March, 2021. The provisional settlement was better than expected and provided the Council with £104.825m up 3.5% in cash terms but adjusted down to 3.4% when grants transferring into the settlement and the effect of the change in the Council’s tax base are taken into account. The Executive in its initial proposals in January identified areas in which it was keen to invest and which had come under pressure during the pandemic including Public Protection and Information Technology. It also saw a need to provide for the Council’s future skills supply and proposed to reinstate the Professional Trainee Programme. The initial 2021/22 Budget proposal as at 18 January was for a net revenue budget of £147.531m which assumed a 3.75% increase in Council Tax. The foreshortened public consultation on the proposals showed that the majority of respondents were against the proposed Council Tax increase and although the Corporate Scrutiny Committee in its meeting on 16 February supported the budget proposals, there were voices within the Committee that wanted to see a reduced Council Tax increase if possible.

The Portfolio Member said that he was therefore pleased to report that as a result of additional funding by Welsh Government (details provided at section 9.1 of the report) the final budget proposal for 2021/22 is a net revenue budget of £147.420m, and a reduced Council Tax increase of 2.75% which is the lowest in North Wales and among the lowest in Wales.

The Director of Function (Resources)/Section 151 Officer confirmed in his capacity as Section 151 Officer that the budget proposal is lawful; the  budget incorporates a number of assumptions and estimates  in terms of likely levels of future income and expenditure   meaning there are therefore a number of financial risks inherent in the proposed budget. These are highlighted in section 6 of the report and include the risk that inflation may be significantly higher than provided for in the budget; that the Teachers’ pay award from September 2021 onwards may be higher than that allowed for in the budget; that demand in Adults’ Services and Children and Families’ Services will continue to grow beyond the current levels on which the budget is based and that the continuation of the pandemic may impact income and expenditure to a level not covered by Welsh Government funding support. The Director of Function (Resources)/Section 151 Officer confirmed that he was satisfied that the proposed budget reflects services’ current needs and that any additional demand pressures will be met from the general reserves.

As at 31 March, 2020, the Council’s general reserves stood at £7.060m which is equivalent to 4.97% of the Council’s net revenue budget for 2020/21 (as a general rule of thumb, 5% of the net revenue budget being considered an acceptable level). A projected £1.47m underspend on the 2020/21 revenue budget would increase the balances to £8.53m (5.8% of the 2021/22 proposed net revenue budget) but, having regard to the Executive’s initial proposal that £921k of general reserves be used to fund the 2021/22 capital budget, this would reduce the level of general balances back down to £7.609m or 5.16% of the 2021/22 proposed net revenue budget. It is the professional opinion of the Section 151 Officer that the level of general reserves is currently at an adequate level to meet the future financial risks faced by the Council. However, the projected level of reserves is dependent on the realisation of the forecast underspend on the revenue budget; additionally, the pandemic creates a greater level of uncertainty and increased financial risks going forward than would normally be the case. These can be mitigated if Welsh Government continues to support the Council for additional expenditure incurred and for loss of income. The £300k from reserves which was to have funded chrome books for schools (which are now being funded by additional Welsh Government funding) will now be used as a contribution to the revenue budget in 2021/22 to part fund the reduced Council Tax increase meaning that the £300k will have to made up by savings in 2021/22 – the Director of Function (Resources)/Section 151 Officer confirmed  that he was satisfied that the Council has the means to fund the £300k in the next financial year.

Councillor Dafydd Rhys Thomas, Portfolio Member for Corporate Business referred to the public consultation on the budget proposals highlighting that nearly 600 responses were received via electronic means as well as correspondence via e-mail which was encouraging given the circumstances and the curtailed timescale. The Programme, Business Planning and Performance Manager provided a summary of the substance of the responses received which were detailed in Appendix 2 to the report.

Councillor Aled Morris Jones, Chair of the Corporate Scrutiny Committee gave feedback on the Committee’s views on the budget proposals (which were not necessarily his own views) and confirmed that following a full discussion at the 16 February meeting and having regard to the outcome of the public consultation, the Committee had by a majority supported the proposals including a proposed 3.75% increase in the Council Tax. During the course of the discussion an alternative proposal for a 2.5% increase in Council Tax had been put forward but did not gain majority support.

Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel reported that the Panel was of the view that any scope for reducing the Council Tax increase should be looked at and that discounted parking for local residents at seaside car parks could be considered.

In response to a question about the number of residents who have signed up to pay the new £35 charge for green garden waste collection and the projected income from the scheme, Councillor R.G. Parry, OBE FRAgS confirmed that over 2,000 had signed up to the middle of February; information about the charge has been provided and publicity has been undertaken on Facebook; reminders will also be included alongside Council Tax bill notifications later in March. The Director of Function (Resources)/Section 151 Officer advised that the projected income of £350k provided for in the budget is based on other North Wales councils’ experiences of providing a chargeable green garden waste collection – Anglesey being the last council in North Wales to introduce the charge; it is estimated that in the region of 30% of households in Anglesey will sign up to the charge i.e. 10,000 households.

The Portfolio Member for Finance clarified that green garden waste collection is not a statutory service and that it is deemed fair to introduce a charge for the service to bring the Council into line with the other local authorities in North Wales.

It was resolved –

•           To note the formal consultation meetings on the budget and the resulting feedback as outlined in Section 3 of Appendix 1 and Appendix 2 to the report.

•           To agree the final details of the Council’s proposed budget as shown in Section 9 of Appendix 1 and Appendix 3 to the report.

•           To note the Section 151 Officer’s recommendation that the Council should be working towards achieving a minimum of £7.3m general balances.

•           To note the comments made by the Section 151 Officer on the robustness of the estimates made, as set out in section 7 of Appendix 1 to the report.

•           To recommend a net budget for the County Council of £147.420m and resulting increase in the level of Council Tax of 2.75% (£35.91 – Band D) to the Full Council, noting that a formal resolution, including the North Wales Police and Community Council precepts, will be presented to the Council o 9 March, 2021.

•           That any differences between the provisional settlement and the final settlement will be adjusted for by using the general contingency which is included in the 2021/22 budget, or by making a contribution to/from the Council’s general reserves in order to set a balanced budget.

•           To authorise the Section 151 Officer to make such changes as may be necessary before the submission of the final proposals to the Council.

•           To agree that any unforeseen pressures on demand led budgets during the financial year will be able to draw upon funding from the general contingencies budget.

•           To request the Council to authorise the Executive to release up to £250k from general balances if the general contingencies budget is fully committed during the year.

•           To delegate to the Section 151 Officer the power to release funding from the general contingency up to £50k for any single item. Any item in excess of £50k not to be approved without the prior consent of the Executive.

•           To confirm that the level of Council Tax Premium for second homes remains at 35% and for empty homes remains at 100%.