Agenda item

(NOTE: Councillor H. Shepardson, having earlier declared an interest in this item, remained in the meeting during its consideration)

The Committee considered a report on the Council’s Revenue Budget Strategy 2024/25 to 2026/27, as endorsed by the Executive Board for consultation purposes at its meeting held on the 15^th January 2024.  The report provided Members with the current view of the Revenue Budget for 2024/2025 together with indicative figures for the 2025/2026 and 2026/2027 financial years based on officers’ projections of spending requirements and took account of the provisional settlement issued by Welsh Government on the 20^th December 2023.

The Committee was informed that the announced provisional settlement represented an average increase of 3.1% across Wales on the 2023/24 settlement, with Carmarthenshire’s increase being 3.3% (£11.0m) thereby taking the Aggregate External Finance to £349,441m for 2024/25. While the settlement was marginally above the Council’s planning figure of a 3.0% increase and provided £0.9m more than the Council’s original assumption, and was to be welcomed, the inflationary, pay awards and other service pressure increases far exceeded the funding provided. In context, the additional budgets required in 2024/25 to meet the costs of pay awards alone totalled £15m,

Whilst the budget proposals assumed the full delivery of all savings proposals, it was noted further work would be required to develop the cost reductions for the 2025/26 and 2026/27 financial years to be able to maintain the current Budget Strategy and level of Council tax. 

It was noted that given the current risks around the Budget Strategy and the ongoing inflationary backdrop, together with other budgetary pressures, the proposed Council Tax increase for 2024/25 had been set at 6.5% to mitigate reductions to critical services. However, the strategy contained a shortfall of £801k which would need to be addressed in order for the Council to set a balanced budget.  In years 2 and 3, the financial picture remained uncertain and, as such, modelled indicative Council Tax rises of 4% and 3% had been made purely for planning purposes and sought to strike a balance with budget reductions. Those proposals would be considered by the Council in setting the Council Tax level for 2024/25 at its meeting on the 28^th February, 2024. Additionally, as the Welsh Government final settlement figure was not due to be announced until the 27^th February, 2024 any amendments required to be considered to the budget strategy as a result of that announcement would need to be considered by Council on the 28^th February.

It was further noted that following the UK Government’s decision to provide additional funding to English Local Authorities, it was hoped the Welsh Government would receive an additional £28m through the Barnett Formula and representations were being made for that additional funding to be provided to Welsh Local Authorities.

The Committee thereupon considered the following detailed budget information appended to the Strategy relevant to its remit:

·       Appendix A(i) – Efficiency summary for the Regeneration, Leisure, Place and Sustainability and Non HRA Housing Services.

·       Appendix A(ii) – Growth Pressures summary for the for the Place and Sustainability Services, - none for the Regeneration, Leisure, Place and Sustainability and Non HRA Services.

·       Appendix B – Budget monitoring report for the Regeneration, Leisure, Place and Sustainability and Non HRA Housing Services.

·       Appendix C – Charging Digest for the Regeneration, Leisure, Place and Sustainability and Non HRA Housing Services.

The following questions/issues were raised on the report:

·       With regard to the budget proposals to increase income within leisure services, the Head of Leisure confirmed they predominantly related to increasing activity and the type of products offered to broaden the income base as opposed to increasing prices. However, while the leisure budget had been set with a 4% price increase, careful consideration had been given to the various rationale behind the increases and the potential impact those could have on the ability of some residents to pay, and that in some cases prices had not been increased. Additionally, the Council operated a concessionary policy to offer reduced rates to those most in need but that needed to be reviewed to achieve consistency of application.

·       In response to a question on the proposed reduction in agency use within the Council’s Residential Care Homes, the Head of Housing and Public Protection advised that while the Council used agency staff in its residential homes, it was felt the establishment of an in-house agency could be operated at lower costs. In that regard, a pilot scheme would be trialled in the four in-house homes in Llanelli from April to July 2024 and, if successful, could be extended throughout the rest of the in-house portfolio across the county and, potentially, extended to include domiciliary care. The scheme would be undertaken on a staggered approach to ensure the proposed savings were achieved. It was also confirmed discussions had been held with the City and County of Swansea which had established a similar in-house agency, and it was felt the proposed in-house provision could be both successful and operated at lower cost than at present.

·       With regard to the proposal for the re-alignment of grants and other funding sources to support front line posts and other services, the Head of Housing and Public Protection confirmed it was felt the re-alignment complied with grant conditions and would be sustainable for a number of years to protect front line services.

·       The Head of Place and Sustainability in response to a question on reductions in the flood defence budget advised the Council could make bids to the Welsh Government for additional funding and that, subject to confirmation, it had secured funding for the current year to offset the reduction to the core budget.

·       With regard to the impact of covid on leisure service, the Head of Leisure confirmed that while some services had recovered quicker than others, the overall recovery was positive with the service being back on track, with growth in some areas. However, it had to be appreciated a lot of other factors such as global fuel prices, instability, inflation and the cost of living also impacted on leisure activity.

·       It was confirmed that while the budget included a £2m provision as a vacancy factor to help bridge the budget shortfall by for example normal staff turnover and holding vacant posts empty to help achieve target savings, the proposals were considered to be manageable.

RESOLVED THAT IT BE RECOMMENDED TO THE CABINET/COUNCIL THAT: -