Agenda item

The Committee considered the Council’s Revenue Budget Strategy 2021/22 to 2023/24 which provided a current view of the revenue budget for 2021/2022 together with indicative figures for the 2022/2023 and 2023/2024 financial years.  The report was based on officers’ projections of spending requirements and took account of the provisional settlement issued by Welsh Government on the 22nd December, 2020. It also reflected current departmental submissions for savings proposals after taking account of the impact of the Covid-19 pandemic on the delivery of those savings.

It was noted that, whilst significant work had already been undertaken in preparing the budget, this report represented an initial position statement which would be updated over the coming month as the budget was further developed, council members are engaged and public consultation takes place.  The final settlement was due to be received from Welsh Government on 2^nd March, 2021.

It was pointed out that Covid-19 has led not just to unprecedented additional costs but also to the collapse of important income, particularly during periods of lockdown. Taken together, it was anticipated that the combination of additional expenditure and income loss would have a £30 million impact on Carmarthenshire’s current year budgets. Authorities have submitted monthly claims, which have been assessed and to a very significant extent, fully refunded by WG. Looking ahead to next year, continued WG funding in this way has not been committed at this stage, not least because WG itself does not yet have funding confirmed as a consequence of Westminster Covid-19 related expenditure.

The report noted the main reasons for the Education & Children’s Services departmental overspend which was mainly due to the forecast increase in school deficit balances.

Although the Strategy proposed a 4.89% Council Tax increase for each of the three financial years, the Executive Board had recommended that the increase for 2021/22 be reduced to 4.48%.  This recommendation would be considered by Council at its meeting to be held on 3^rd March, 2021 when setting the Council Tax level for 2021/22.  Additionally, the Welsh Government final settlement figure was to be announced on the 2^nd March 2021 and any amendments required to be considered in relation to the Budget Strategy arising from that announcement would also be considered by Council on the 3^rd March.

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

·         Appendix A(i) – Efficiency summary for the Education & Children’s Services Department

·         Appendix A(ii) – Growth Pressures summary for the Education & Children’s Services Department

·         Appendix B – Budget monitoring report for the Education & Children’s Services Department

·         Appendix C – Charging Digest for the Education & Children’s Services Department

Whilst the budget proposals assumed the full delivery of all the savings proposals, together with the identification and delivery of the shortfall in savings proposals for the 2022/23 and 2023/24 financial years, further cost reductions would need to be identified for those latter years in order to maintain the current Budget Strategy and level of Council Tax. The savings to be identified in years 2 and 3 of the Strategy amounted to £1.96 million and departments would work over the forthcoming year to identify those savings.

The following questions/observations were raised on the report:-

• Reference was made to the fact that the departmental overspend was due mainly to the forecast increase in school deficit balances and officers were asked whether the Authority should question the pattern of distributing money to all Local Authorities in Wales.  The Chair referred to the fact that the Committee has already requested an analysis of the formula used by the Welsh Government for allocating money throughout Wales;
• It was pointed out that financial accountability rests with governors.  All schools can experience falling rolls for a variety of reasons and officers were asked how decisive Governing Bodies are when quick financial decisions are needed to eradicate growing imbalances.  The Head of Education & Inclusion Services informed the Committee that officers are totally aware of the financial challenges in our schools.  Officers meeting with Headteachers and Governing Bodies to discuss their financial situation.  He added that there are also local reasons to take in account and some schools need more support than others to tackle the problems;
• Reference was made to the fact that if the formula for funding was fair it would help counties like Carmarthenshire with a high number of small rural schools and officers were asked what is being done by the WG in relation to the presumption against closure and what discussions have been held with WG and WLGA in relation to changing the formula and if this was done, would this take the pressure off our smaller schools.  The Executive Board Member for Education and Children explained that the funding is allocated to the pupil so as pupils numbers fall then so does the funding allocated to the school.  Officers from the Finance and Education Department work hard with schools to address the problems they are experiencing;
• Asked how many schools have a deficit balance, the Head of Financial Services confirmed that 44 out of 112 schools have a deficit balance;
• Reference was made to the fact that we need to put pressure on WG to allocate more money to our schools especially with the new curriculum.  The Head of Education and Inclusion Services referred to the that there is a presumption against closure, however, WG funds per pupil and not per school which creates problems for the Authority.  Representations are made to WG by the Director via the Association of Directors of Education.  Any school with less than 92 pupils is considered to be a small school so any small school funding has to be spread among so many schools which fall into this category that it is ends up being a very small amount of funding;
• Officers were asked if the outcome of the discussions between the unions and Welsh Government regarding the 2.75% pay increase is known and what the effect will be.  The Executive Board Member referred to the fact that this has caused a lot of uncertainty because WG sanctioned the pay increase, however, the cost of this will have to be met by the Local Authority.  The Head of Financial Services confirmed that there was sufficient funding in the draft budget to validate this cost for the September 2020 pay award;
• Reference was made to the fact that pupils have missed out on a year of schooling and officers were asked if there was a recognition at government level that in order bring pupils back up to the required level there needs to be some sort of financial boost to address that.  The Executive Board Member for Education & Children stated that this was a huge concern and he agreed that additional money should be forthcoming to enable this issue to be addressed, however, he was unaware of any such provision.  The Head of Financial Services explained that an announcement had been made the day before regarding an approximate additional £65m to support schools, however, it was not yet known how WG will deploy that funding. The Head of Education and Inclusion Services added that additional Accelerated Learning Programme grants have been made available for secondary school pupils in examination years.  However, there was a challenge regarding how late this funding is received by our schools with some grants being received last week which have to be spent completely by the end of the financial year which does not allow any time for forward planning by headteachers.  Officers have gone back to WG to implore them to consider this and allow headteachers sufficient time to make prudent use of this additional funding;
• Concern was expressed with regard to grant funding coming in very late and often being withdrawn altogether which makes it difficult for schools to budget. The Head of Education and Inclusion Services agreed that it was highly frustrating for headteachers and some of the terms and conditions also make it increasingly difficult. The Group Accountant added that this was something that officers constantly raise with WG.  The Executive Board Member for Resources agreed that the basis for the funding formula is faulted as it does not acknowledge rurality issues and queried whether big urban authorities have the same issues with delegated budgets. If they do not then there are obviously issues with the formula funding which would need to be taken up with WG.  The Chair reminded the Committee that Finance Officers agreed to look into this issue at the last meeting;
• Officers were asked if funding has been made available to WG to provide IT equipment for vulnerable families as there is a real need to ensure that their IT requirements are addressed to ensure that that every child in every family has the same opportunities.  The Head of Education and Inclusion Services explained that to date over 2000 laptops and dongles have been distributed to families throughout the county;
• With regard to the Education & Child Psychology Services, officers were asked if this service was being delivered remotely and whether that had  increased the number of people who can benefit. The Head of Education and Inclusion Services informed the Committee that the service has continued during the pandemic with all services delivered remotely and accessibility to external providers such as therapists has also remained. He added that in many instances in services across the department we are actually responding quicker and more effectively because we are working remotely and are able to get in touch with parents more quickly because they are now more au fait with using the technology available to them.  Working remotely was not detrimental in all circumstances.

RESOLVED TO RECOMMEND TO THE EXECUTIVE BOARD