Agenda item

(NOTE: Councillors A Vaughan Owen, L.M. Davies, N. Evans, R. Evans, L.D. Evans, H. Shepardson, G. Morgan, T. Higgins, D.C. Evans, K. Broom, J. Hart, B. Jones, P. Warlow, A. Evans, F. Walters, A. Leyshon, D. Nicholas, C.A. Jones, E. Williams, D. Cundy, E. Skinner, R. Sparks, L. Roberts, G. Thomas, M. Palfreman, B. Davies, G. John, T.A.J. Davies, Andrew Davies, J. James R. James and P.M. Hughes had earlier declared an interest in this item remained in the meeting and took part in the discussion and voting thereon)

Council was informed that the Cabinet, at its meeting held on the 20^th February 2023 (Minute 5 Refers) had considered the Revenue Budget Strategy 2023/24 – 2025/26 and made a number of recommendations, as detailed within the report of the Director of Corporate Services, for Council’s consideration.

The Council received a presentation from the Cabinet Member for Resources, on behalf of the Cabinet, in which he set out the background to the budget proposals being presented to the Council for consideration together with the responses received to the budget consultation.

It was explained that with the Welsh Governments budget process being much later than normal, the report being presented to Council that day had been prepared prior to the Welsh Government announcing its final settlement figures on the 28^th February. Nevertheless, it had been possible for some of the key components of the Council’s budget assumptions and allocations to be reviewed. That had enabled some of the original proposals in the budget outline to be revisited and for further options to be considered and presented as part of the report to Council. On an all-Wales basis, whilst the provisional settlement figures reflected a 7.9% funding increase, with Carmarthenshire having received an 8.5% uplift, the final settlement figure had also provided Carmarthenshire with an additional £10.7k which would be added to its contingency budget.

Due to the lateness of the final settlement, Council was advised that the report provided for delegation to be granted to the Director of Corporate Services, in liaison with the Leader, Chief Executive and Cabinet Member for Resources to make any adjustments as necessary, upon receiving the final settlement. Whilst the Council had been informed of those amendments that day, the Director would still need to follow those adjustments through in the budget tables following its meeting. The Director had also adjusted some of the other figures within the strategy as part of the normal routine as clearer and more information had become available, with the current total validation having added more than £30m on to the budget. 

The Cabinet Member advised that although the report maintained a pay assumption of 5% for 2023/24 for both NJC, as well as teaching staff, the national employers in respect of NJC staff had, subsequent to the Cabinet’s meeting on the 20^th February, made  a cash offer to the Trade Unions similar to 2022/23. That offer was estimated to reflect a 6.7% increase resulting in a 1.7% shortfall equivalent to approximately £3m on net budgets. With that offer having only recently been made, the Welsh Government had not been able to consider how it may be supported given the fact it was again above almost all Local Authorities assumptions. As a consequence, it was considered prudent for the Cabinet Member for Resources together with the Director to give consideration on how to accommodate the additional budgetary pressure, especially as Welsh Government funding was unclear with the Director having advised the Council would need to use a combination of the following measures to fund the shortfall, should it be accepted: 

·       Allocate £1m from the contingency budget,

·       Utilise the National Non Domestic Rate revaluation adjustment, estimated at around £500k and,

·       Allocate £1.5m from general balances, if it was not possible to recover the funding from underspends during the year,

Whilst the above proposal was not considered an ideal scenario it was considered to be a practical and prudent approach at the current point in the budget process. Additionally, the Authority also had to recognise the potential risk of negotiations going further during the forthcoming year.

With regard to the teachers’ pay awards, an offer of 1.5% consolidated and 1.5% unconsolidated had been put forward by the Welsh Government Ministerin respect of the pay settlement applicable from last September. As the Authority had accommodated a 5% increase within its budget strategy, there was a potential shortfall in the region of £1.9m. Whilst it was expected Welsh Government would fund a substantial part of the additional offer, nothing had formally been confirmed at the present time and the position would need to be monitored during the year, as negotiations were finalised. 

The Council was advised that the budget proposals had been widely consulted on for nearly six weeks with approximately 2,000 responses having been received. Meetings had been held with the Leader of the Opposition and their Resources Spokesperson. Additionally, 80 young people from the Council’s secondary schools had met with cabinet members and officers to express their views on budget priorities. It had become evident from all who participated in the consultation they appreciated that difficult choices that had to be made.

As referenced above, the Council was advised that changes to some of the key assumptions such as pay and income calculations, updated energy prices based on the latest information, and the release of capital charges had enabled some changes to be made to the final budget proposals, as detailed in paragraph 3.2.5 of the report, resulting in a total sum of almost £1.8m being available to make changes to next year’s budget. Accordingly, the Cabinet had recommended that to make best use of that sum the following adjustments be made to the Budget Strategy, that took account of the consultation process and responded to the feedback received from both public and councillors: 

Firstly:

£1.3million be provided to remove or reduce the 9 specific budget reductions on paragraph 3.2.5 including: 

- keeping St Clears Leisure centre open whilst we work with the community to set it on a viable financial path, 

- restoring 1/4 of a million pounds back to children’s and youth services to invest in the prevention agenda, 

- lessening the impact on both the school music service and learning disability services. 

- reducing the financial ask on schools by £700,000, and also deferring any changes to the rising 4s policy by a year to ensure wider consultation and allowing the proper time to plan any possible changes. 

Secondly: 

• The Introduction of charging at the 9 car parks that were currently free be deferred, to allow the Authority time to assess and consider the wider impact on the individual areas. The value of the deferment in year 1 was £10k. and 

• The withdrawal of the reduction of £22k in the Welsh Language budget under the Corporate Policy section, which was used to support projects and commission related work and research. 

Thirdly,

that £385k be used to support both hard working families and businesses by restricting car park charges and school meals to a 5% increase, half the current rate of inflation. 

Fourthly,

responding to concerns over highways and town centres, that £262k is allocated directly towards these priorities. We recognise that Welsh Government had suffered a significant contraction in its capital budgets, and therefore some of the historical support provided for public realm works had dried up in recent years – this funding allocation will act as at least partial mitigation. 

Finally, and most importantly, that left sufficient funding available to reduce the council tax increase to 6.8% for next year which it was felt struck the right balance in terms of protecting vital services which our citizens rely upon and look to the council to deliver each and every day.  

The Cabinet Member advised that adopting the proposals would allow the Council to present a fair and balanced budget for next year, that responded to the views fed back from the consultation. If all the proposals outlined in the report and summarised to the County Council were implemented, he confirmed a sustainable and viable Budget Strategy would be provided which: 

·       Responded to the consultation,

·       Ensured, as far as possible, that service level and standards were maintained,

·       Recognised that citizens were finding it hard in the current climate and ensured core services were protected,

·       As far as possible prepared the Authority for the significant uncertainties that lay ahead.

However, he also advised that unlike previous years, the recent pay award was a significant financial risk to the budget moving forward and whilst the management of that additional cost in the current year had been addressed, the level of additional cost and uncertainty presented a significant risk to the medium term sustainability of services in the years 2025/26 onwards, depending on the future Welsh Government settlements that would require careful monitoring during the forthcoming years. 

In concluding the Cabinet Member, on behalf of the Cabinet, moved the Budget Strategy 2023/24 – 2025/26 recommendations as noted in the report, setting a Band D Council Tax for 2023/24 of £1,490.97, which was an increase of 6.8 %. 

RESOLVED that the following recommendations of the Cabinet be adopted and approved: