The Executive Board Member for Resources presented the Revenue Budget Strategy 2021/22 to 2023/24 which had been endorsed by the Executive Board for consultation purposes at its meeting on 18th January 2021. The report, which provided Members with the current view of the Revenue Budget for 2021/2022 together with indicative figures for the 2022/2023 and 2023/2024 financial years, was based on officers’ projections of spending requirements and took account of the provisional settlement issued by Welsh Government on 22nd December 2020. It also reflected the current departmental submissions for savings proposals. The impact on departmental spending would be dependent upon the final settlement from Welsh Government and the resultant final Budget adopted by County Council.
The budget proposals, as presented in the report, assumed the full delivery of all of the savings proposals submitted, together with the identification and delivery of the shortfall in savings proposals 2022-23 and 2023-24. Further cost reductions would need to be identified for years 2022/23 and 2023/24 to be able to maintain the current Budget Strategy and level of council tax.
It was highlighted that the critical importance of minimising the Council Tax increase for residents whilst maintaining a balanced budget in these unprecedented and challenging times was recognised.
Given the scale of the pressures and forecasted budget gap, Council Tax increases had been maintained at the previous MTFP levels of 4.89% in each of the three financial years which, it was considered, provided at least some mitigation to the savings proposals which the council needed to consider.
Amongst the issues raised during consideration of the report were the following:
· In response to a question as to how, when considering the budget proposals, the compromising of the ability of future generations to meet their own needs could be avoided when settlements were received so late the Director of Corporate Services acknowledged that it was a challenge which was why the Council itself formulated a 3-year budget so that the likely situation could be reasonably predicted within available parameters as to how welsh and national government allocated funds;
· Concern was expressed the effect of the pandemic on school reserves. The Committee was advised that the Authority continued to work with the 30% of schools which were currently in deficit but it was clarified that most of the additional expenditure by schools associated with the pandemic had been funded by the hardship claims made to Welsh Government and it was anticipated that this would continue to be the case for the foreseeable future;
· In terms of general reserves, which provided a ‘safety net’ for unexpected variations in expenditure in any year [e.g. floods, covid] and enabled the Council to respond, the Committee was advised that it had always been deemed that 3% of net expenditure was a prudent level and it was recommended that this be retained;
· In response to a suggestion that the proposed Council Tax be reduced further than what was being recommended utilising reserves to help ratepayers at this difficult time the Director of Corporate Services advised that this would be an imprudent use of reserves for the reasons outlined earlier - the need to retain them for unexpected variations – and also the likely impact on residents the following year in terms of having to recover the lost tax. The Committee was advised that, in line with the budget consultation process, if it did wish to recommend a reduction of the Council Tax which did not impact on reserves it should consider the proposed budget and those areas where it would recommend spending could be reduced. Alternatively, substantial efficiency savings, presented in the report, had already been deferred to the following year and the Committee could express the view that some of these be brought forward.
RESOLVED to accept the report and endorse the Charging Digest.