Agenda item

The Committee considered the Council’s Revenue Budget Strategy 2023/24 to 2025/26 which provided a current view of the revenue budget for 2023/2024 together with indicative figures for the 2024/25 and 2025/26 financial years.  The report was based on officers’ projections of spending requirements and took account of the provisional settlement issued by Welsh Government (WG) on 14th December 2022.

It was emphasised that whilst significant work had already been undertaken in preparing the budget, the report represented an initial position statement which would be updated following the consultation process.  Accordingly, Members were reminded that the report had been considered by the Cabinet at its meeting on 9th January 2023 and members of the Committee had attended recent consultation events which had provided an opportunity to analyse and seek clarification on various aspects of the budget.

The Committee was advised that the final budget proposals would be presented to the Cabinet mid/late February, which would enable a balanced budget to be presented to County Council on the 1^st March 2023.  It was however noted that due to the delays in the provisional settlement, and the consequential impact on Welsh Government’s budget finalisation, the publication of the final settlement would not be published until the 7th March 2023.

The report indicated that, after adjustments for WG, identified transfers, the increase in the provisional settlement for Carmarthenshire was 8.5% (£26.432 million).  The Aggregate External Finance (AEF) had therefore increased to £338.017 million in 2023/24.  Whilst the settlement represented a significant increase to the indicative figure of 3.4%, the financial model forecasted a requirement for £20m savings over the three-year Medium Term Financial Plan (MTFP) period.

It was highlighted that an additional £7.9m funding had been announced for Health, Social Services and Education and apportioned to Local Government resulting in an increase share of 8.5% for the Authority. 

It was noted that inflationary pressures were heavier than they had been in decades and that the inevitable cost rises would result in budgetary reductions.  WG also issued all Wales level specific grants alongside the provisional settlement.  These were broadly similar in cash value to previous years.  However, with the rise in inflation and the pay awards at the current level there were real term cuts. 

The Ministers letter stated that funding had been provided to cover the living wage increase and that all funding had been allocated.  The full cost of future pay awards would need to be accommodated locally.  In constructing the budget this had been challenging as the adjusted pay and inflation assumptions to provide departments with funding wasn’t sufficient. 

Members were reminded that when the budget was previously set, the agreed pay increase was 4% which was prudent at the time.  Pay increase for most staff was agreed at a flat rate of 2K (equating to an average of 7.1%) across the workforce.  An additional 3.1% ‘catchup’ would need to be factored into next year’s budget.  Reference was made to the 5% increase for all Teachers which had been agreed by WG; however, it was acknowledged that the National Education Union (NEU) members had voted in favour of industrial action in a bid for a 12% pay uplift.  Committee noted that the draft budget included the 1% ‘catchup’ to 5%, however any further increases would be unfunded and represent an additional financial pressure of approximately £1m for every 1% increase in pay.  In total, the assumption on pay would add £19m to the Council’s budget next year

It was noted that the strategy over the previous years had been to increase fees and charges in line with the prevailing rate of inflation and the draft budget proposed a 10% increase where possible.  Residents had been invited to submit their views on this as part of the public consultation.

The Committee was advised that Appendix C showed a £12m toward the  increase in departmental pressures identified by departments and were inescapable if the Authority was to continue to deliver services at the current level.

Appendix Aii showed substantial inflationary increase in the cost of provisioned care, demographic growth as well as increases in fostering allowances.  It was noted that Adult Social Care had pressures which had already been constrained to what the Director considered to be operationally deliverable given the current workforce pressure experienced across the entire sector.

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

·         Appendix A(i) – Efficiency summary for Health and Social Services

·         Appendix A(ii) – Efficiency Summary for Health and Social Services

·         Appendix B – Budget monitoring report for Health and Social Services

·         Appendix C – Charging Digest for Health and Social Services

On behalf of the Committee the Chair extended her appreciation for the work the team had undertaken in producing the draft budget and for hosting the recent Budget Seminar where the Committee had been afforded the opportunity of asking questions.

UNANIMOUSLY RESOLVED that: