Decision details

The Leader of the Council moved the budget proposals saying that in recent years, the Council had made significant improvement in how it plans its resources in the medium term, ensuring alignment with its vision for the City, through the Medium Term Financial Plan which helps the Council to provide the best possible services to the residents of Newport within available resources.

 

The Leader initially dealt with the Treasury Management Strategy and informed the Council that essentially the strategy being recommended was similar to previous years. He said that, in the main capital schemes would be funded from the Council’s own resources, the exception being the funding for Friars Walk. The Council would not take out long term borrowing and in general would not be a significant investor

 

The Leader mentioned that the capital receipt from the Friars Walk development will be paid in November and this was likely to result in the Council being a short term significant investor. He stressed that, as always, security of funds will be prioritised.

 

The Leader stated that the key driver to the Treasury Management strategy was the capital programme and the final 2 years of the current programme was shown in the report to Council. He said that given the pressure on revenue funds, there were no easy solutions to expand the capital programme through additional borrowing, though demand for capital resources, as usual, was high.

 

The Leader confirmed, however, that the Council would be investing over the next two years in schools and the city centre regeneration as well as the usual replacement of key IT and vehicle assets. He stated that the Cabinet would continue to look at options to provide further investment in key projects and assets wherever possible.

 

As to the revenue budget and council tax, the Leader began by saying that the original proposals for the coming year were on the basis of the expected settlement from the Welsh Government.  Originally this meant preparing for a 4% reduction, then 2.3%.  A 5% increase in Council tax was used as a working assumption.

 

There was also a need  to consider pressures on the budget including: costs relating to the new National Living Wage; funding the increase in employer’s National Insurance costs; and funding the costs of meeting the Welsh Language Standards at £280,000 in 2016/17. The Leader pointed out that these pressures are requirements that have to be met .They amount to nearly £4.3m in 2016/17 and must be met with no additional funding being provided. In addition, there were the annual and regular pressures on the budget, such as inflationary pressures; on-going and increasing demand on social care; and investing in schools

 

The Leader stated that for a number of months, the Cabinet had worked together with officers to develop proposals for consultation. He wanted to make it clear that the proposals that arose from those discussions were indeed proposals and not - as described by some observers - decisions.

 

The final 0.7% reduction in the settlement had resulted in a challenging budget but with fewer savings having to be made than originally feared. The Leader explained that Welsh Government grant makes up about 83% of the Council’s total budget so the level of grant received is crucial to funding the services the Council provides. The Leader reiterated that he had written to the Welsh Assembly Government making the case for Newport and he had recorded thanks to the appropriate Ministers for listening to the Council’s submissions prior to the settlement announcement.

 

 

 

As to consultation, the Leader of the Council described the process which included the public; the Scrutiny Committees; Trades Unions; GAVO, the business community, the Fairness Commission and all interested parties. He stated that the Cabinet considered the budget at its February meeting and had listened very carefully to the various responses received during the consultation process. As a result of this consideration, adjustments were made to the original proposals as follows:

 

• The complete removal of 11 savings proposals based on the feedback received.  These were mainly in those areas affecting the city’s children and younger residents, for example the cessation of funding for additional learning needs support and in social care preventions team and youth services. Funding for City events and marketing have also been taken out of the savings proposals

 

·         An increase in funding to schools, which now would receive a 3.5% increase. This was one of, if not the, highest in this area and indeed Wales.

 

·         Increased funding for on-going investments in Streetscene infrastructure and assets

 

·         The introduction of an “Energy Officer” to help provide a focussed approach to energy in relation to consumption, procurement, generation and the provision of opportunities for new businesses and employment.

 

·         The introduction of  a ‘Small Business Growth Fund’ to offer a range of support to new entrepreneurs and small businesses looking for a ‘kick start’, thus helping to maintain Newport’s position as the best place in Wales to start a business.

 

The Leader considered all of this demonstrated that Cabinet had kept its promise to listen carefully to the results of the consultation exercise before making recommendations to Council

 

As to balances, the Leader stated that balances were at a level that the Head of Finance had confirmed as a prudent amount. The Council also held reserves for specific uses which were reviewed regularly.

 

The Leader informed Council that the Cabinet considered very carefully the position in relation to the increase in Council Tax and agreed to recommend to Council that it should be set at 3.9%. He said that the basis for this recommendation was the need to consider what was right for the City but also what was fair and reasonable for the citizens of Newport in the current financial climate. The more favourable settlement also played its part in considering this figure. Welsh Government had implied that careful thought about the balance of needs was important.

 

The Leader made the following points:

 

·         The proposed  percentage increase is about the average for Wales for 2016/17

·         Newport’s tax is already low and even with this increase, will retain its position as the second lowest rate in Wales, and amongst the lowest across UK unitary authorities

·         In cash terms, it will be lower than most , as Newport’s starting point is lower than virtually all other Councils

·         It will still see the Council spending less than the Standard Spending Assessment – the amount Welsh Government  deems is needed to fund a ‘standard level of services’, by around £7 million. This Council will continue to provide good value in what it does

·         It allows the Council to continue to invest in its schools, a commitment to the National Living Wage and social justice and provide funding to other key areas of the budget whilst balancing this with savings of approximately £7m for 2016/17

 

It was explained that the recommended increase would produce an average Band D Council Tax of £974.61, an increase of £36.59 per year, or as little as 70p per week. The Councils overall budget would be just under £264m.

 

As to the alternative budget circulated by the Opposition Group, the Leader considered that there must be a better way for Groups to present their proposals in advance of the Council meeting so that they could be properly discussed, considered and form part of the consultation exercise. He considered that if the Opposition Group or Groups presented alternative proposals to the Cabinet, it would allow more time and opportunity for the proposals to be fully considered as part of the consultation process and aske officers to consider how that could be included in the process.

 

The Leader stated that the Cabinet continues in its ambition to protect services, protect vulnerable people and seek social justice. He said that  investment in the capital programme, the introduction of the living wage to Council employees, the various change projects over the next 4 years and the on-going investment in the city centre are testament to these and the confident manner in which the administration is steering a path through these difficult times

 

The motion was seconded by Councillor Truman.

 

The Leader of the Opposition moved the following amendment:

 

(1)  Reduce the Council’s net budget down at current level recommended  - to £263,361,000

(2)  Reduce the Newport City Council’s own  ‘Council Tax’ increase to 2.95% (currently proposed 3.90%), which would result in a Newport City Council Band ‘D’ Tax of £965.68 (currently proposed £974.61)

He acknowledged it was for the Council’s Cabinet to decide on the detail of the budget.  In coming to the above proposed amendment, he asked the Cabinet to consider the following changes:

 

(1)  Stop Review of Car Parking Charges - £80k

(2)  Deletion of one Cabinet Member – (£16k)

(3)  Make Newport Matters cost neutral – (£43k)

(4)  Delete Union facility time – (£56k)

(5)  Remove increase in maintenance budget pressure – (£350k)

In lieu of the above removal of the maintenance budget pressure, additional investment could be made over the areas below, which will be funded by reserves, which will have a nil impact on Council Tax.

 

(6)  Fund investment in maintenance budget in Streetscene over 3 years (funded by use of general reserve as below) - £1,300k

(7)  Fund investment in schools buildings over 3 years (funded by use of general reserve as below) - £1,300k

(8)  Fund investment in city centre infrastructure over 3 years (funded by use of general reserve as below) - £1,300k

(9)  Use of general reserves – (£3,900k) – over 3 years as above and will reduce the general reserve from £8.926m to £5.026m by 2019/20.

He stated that would reduce Newport City Council’s expenditure by £385k, being a reduction in Council tax funding of £500k, less consequential reduction in Council Tax Reduction benefit of £115k, which would enable its Council Tax increase to be reduced to 2.95%.

 

In presenting the amendment, the Leader of the Opposition stated that his Group had welcomed the removal of some of the more unpalatable proposals but noted that some had been deferred and would need to be monitored.

 

The Leader of the Opposition stated that the Welsh Government had refused to fund a Council tax freeze but should this have been done since 2011/12 the cumulative savings would be £542.43

 

There was concern about the doubling of car parking charges and a belief that it would impact negatively on supporting the development of the city. The Leader of the Opposition also asked for the £60,000 announced to support business to be in the form of actual grants, as introduced by the coalition administration.

 

He referred to the consistent approach to savings as outlined above which would save £465,000. He also proposed the use of £3.9m form general reserves over the coming three years to provide an additional £1.3 m in Streetscene; and additional £1.3 m in school buildings and an additional £1.3m in city centre infrastructure projects. He considered schemes that could benefit would include roads maintenance to small environmental projects; classroom refurbishments; enhancement schemes in the city where matched private sector funds could make a huge difference

 

The amendment was seconded by Councillor David Williams

 

A large number of members spoke for and against both the amendment and, by implication for and against the substantive motion.

 

Those speaking against the amendment and in favour of the substantive motion made the following general points

 

·         The proposed budget was a people’s budget that protects jobs and services and promotes growth

·         “Newport Matters” provided a valuable source of information to all residents free of charge and in a non- political manner and there had been positive feedback from residents

·         There was a legal requirement to give time off for union duties and the unions provided a valuable relationship with the Council as well as providing protection for employees in all types of employment

·         The levels of balances held by the Council were low in percentage terms when compared to other councils in Wales. They also provided security for unknown future pressures and uncertainties about future funding

·         The proposal to increase spending on schools contrasted with a previous proposal by the opposition to reduce spending on education

·         Car parking in Newport was safe, well maintained and well lit and still provided good value when compared to other cities. The proposal was to increase by only £1 for three hours parking to £2.Good quality parking enhances the shopping experience in Newport

·         The proposals relating to the Streetscene service were aimed at providing a streamlined 21^st century service to residents.

·         Subsidy of  car parks would continue at around £180,000 per annum

·         There was no such thing as free car parking. In Cwmbran, for example, traders paid for the parking by way of their leases. Traders in Newport had in the past resisted such a scheme.

·         The reduction in council tax proposed in the alternative budget was minimal

·         The Cabinet was already investing in schools and would continue to do so

·         The budget proposals were reasonable and fair

·         The investment in Education was welcomed and represented a better increase than probably all of Wales and certainly more than any pledge would have required

·         There was no provision for vulnerable adults in the amendment

·         Scrutiny and the public had been listened to as part of the process

 

Those speaking for the amendment and against the substantive motion stated:

 

·         Doubling car parking charges at this stage in the recovery was not right and could lead to even more illegal car parking in the city centre

·         The whole of the city centre needs to be promoted

·         “Newport Matters” was not read as widely as claimed

·         There was free parking for users in other localities

·         The proposed use of balances would help enhance the growth of the city over three years

 

In summing up the Leader of the Opposition stated that they were not against Unions but considered the Council should not pay for Union time off. This was the case at other local authorities. He considered that “Newport Matters” could pay for itself quite easily. He noted that no one had spoken against the proposal to reduce the Cabinet. He also considered that incremental increases in parking charges could result in a fall in footfall and it was important to compete with other centres, rather than the other cities. The use of balances for the schemes proposed would not reduce the available funds below the recommended minimum and would allow the money to invest now and over a three year period on services that needed improvements.

 

In closing the debate, the Leader of the Council stated the proposal for the reduction in council tax was a token. Similar tactics had been used as far back of 2007 where it was suggested reserves could be used for litter picking and refurbishment of local toilets. The Council is currently in a good place in comparison with others. The cabinet was planning spending on schools. The number of Cabinet Members and portfolios were kept under review and work was being done on this at this time. The cost of a cabinet member was £16,000 out of £264 m, representing a miniscule percentage amount. The Cabinet had done extremely well in arriving at this budget.

 

As to “Newport Matters” the Leader stated he had already asked about income generation and becoming a digital publication. Money was, however, being saved by the publication of Statutory Notices in “Newport Matters”. A survey showed some 77% of people found it useful for information. 

 

The Leader mentioned that Trade Unions played an important part in consultation on changing working practices or any pay and reward schemes and the goodwill of the unions was important. The funding was money well spent. Poor relations could easily impact on targets and performance. 

 

The Leader took the opportunity to mention that Ms Debra Wood- Lawson, Head of People and Business Change would be leaving the Authority soon and he thanked her for her work and commitment, including her work with the Unions on the Total Reward project.

 

As to free parking, advice from consultants was that free parking can cheapen the offer presented in a City or town centre.

 

There would be consideration as to how to best make use of reserves. The budget demonstrated a commitment to education and there was a need to improve the fabric of schools

 

The Leader reiterated his wish to find a better way of considering proposals from opposition groups as part of the consultation process.

 

 

The required number of members called for a recorded vote in relation to the amendment.

 

Members voting in favour of the amendment were Councillors D Atwell; M Cornelious; M Evans; C Ferris; D Fouweather; M Kellaway; T Suller; R White and D Williams. A total of 9 members

 

Those members voting against the amendment were: Councillors O Ali; M Al Nuiami; T Bond; R Bright; P Cockeram; E Corten; K Critchley; D Davies; V Delahaye; E Garland; G Giles; J Guy; D Harvey : I Hayat; P Huntley; R Hutchings; R Jeavons; C Jenkins; M Linton; C Maxfield; D Mayer; S Mlewa; J Mudd; R Poole; J Richards; M Spencer; C Suller;  H Thomas; E Townsend; R Truman; T Watkins; M Whitcutt; and D Wilcox. A total of 33 members

 

Members abstaining were: Councillors: J Cleverly; C Evans; and K Whitehead. A total of 3 members

 

The amendment was therefore lost

 

In discussing the substantive motion, the Leader of the Council agreed to discuss with Councillor Atwell a confidential matter in relation to the capital programme.

 

Councillor Al Nuaimi considered the consultation process this year was more constructive and that the budget as proposed was sustainable and fair.

 

Councillor Whitehead stated that increases in Council tax were a concern for local residents in his ward along with refuse collection. He praised the work of the Pride in Pill initiative and stated a similar organisation was in place in Bettws. Councillor Ali explained the significant support from Council Officers and members in relation to the Pride in Pill.

 

The Leader of the Opposition stated that the Conservative Party was planning a referendum on Local Government reorganisation if elected to the Assembly Government. He considered that investment in Streetscene and small schemes were important.

 

Councillor Davies considered that the comments made by residents had influenced the final budget proposals. Councillor Townsend considered that there should be no reduction in maintenance and Streetscene services.

 

Councillor Wilcox explained the pressures on schools’ budgets and stated the settlement was the best in the locality if not Wales. Councillor Truman reiterated the need for reserves to be held to meet future challenges. Councillor Chris Evans welcomed the decision to continue with events

 

There was general agreement that a better way of consulting other groups would be helpful

 

Resolved:

 

Revenue budget and Council Tax 16/17 (paragraphs 4-32)

 

·         To note that an extensive consultation exercise has been completed on the medium term change/efficiency programme, including the 2016/17 budget proposals and that Cabinet have taken these into account in recommending final details of the programme and the resulting 2016/17 overall revenue budget recommended to this Council.

·         To note the Head of Finance’s recommendations that minimum General Fund Balances be maintained at £5million, with the actual in place currently being £8.93m

·         To note that, in line with the requirements of the Local Government Act 2003, the Head of Finance confirms the robustness of the estimates underlying the proposals and the adequacy of the General Reserves in the context of other earmarked reserves and a revenue budget contingency of c£1,500k

·         To approve the total revenue budget, shown in Appendix 1

·         To approve a Council Tax increase for Newport City Council of 3.90%, a band D tax of £974.61

·         To approve the formal Council Tax resolution, included in Appendix 5  and set out below which incorporates Police and Crime Commissioner for Gwent & Community Council precepts

 

Capital Programme and 2016/17 budget (paragraphs 37–50)

 

•    To approve the 2016/17 capital budget, in line with the detail contained in Appendix 6

 

Treasury Management and Investment strategies, Minimum Revenue Provision Policies & Prudential Indicators (paragraphs 51-71)  

 

•        To approve Treasury Management Policies in line with the detail contained in Appendix 7

•        To approve the Annual Investment Strategy in line with the detail contained in Appendix 7

•        To approve the Council’s Counterparty list (external bodies for Council investments) in line with the detail contained in Appendix 7

•        To approve the Prudential Indicators in line with the detail contained in Appendix 7

•        To approve the Minimum Revenue Provision policy in line with the detail contained in Appendix 7

 

Medium Term Financial Plan and Capital programme (paragraphs 1 – 3 and 37 - 50)

 

•        To note Cabinets approval of the implementation of the full 4 year change and efficiency programme, including all budget investments and saving options (Appendices 2 - 3), as summarised within the Medium Term Financial Plan (Appendix 8) and the final 2 years of the capital programme (Appendix 6). Noting they are subject to on-going review and updating.

 

RESOLUTION TO SET COUNCIL TAX LEVELS

 

1.       That the revenue estimates for 2016/2017, as recommended by the Cabinet on 15th February 2016 be approved.

 

2.       That it be noted that the Council at its meeting on 20^th February 2007 delegated the setting of the tax base to the Head of Finance and that on05 November 2015, the Head of Finance acting in accordance with that delegation calculated the following amounts for the year 2016/2017 in accordance with regulations made under Section 33(5) of the Local Government Finance Act 1992:-

 

(a)     Council Tax Base

 

56,145.64 being the amount calculated by the Council, in accordance with regulation 3 of the Local Authorities (Calculation of Council Tax Base) Regulations 1992, as its council tax base for the year;

 

(b)     Council Tax base for parts of the Council’s Area

 

 

 

3.       That the following amounts be now calculated by the Council for the year 2016/2017 in accordance with Sections 32 to 36 of the Local Government Finance Act 1992:-

 

(a)  £393,881,336.69 being the aggregate of the amounts which the Council estimates for the items set out in Section 32(2)(a) to (e) of the Act

(Gross Expenditure).

 

(b)  £129,769,000.00 being the aggregate of the amounts which the Council estimates for the items set out in Section 32(3)(a) to (c) of the Act

(Gross Income).

 

(c)  £264,112,336.69 being the amount by which the aggregate at (3)(a) above  exceeds the aggregate at 3(b) above, calculated by the Council, in accordance with Section 32(4) of the Act, as its budget requirement for the year (Budget + Community Council precepts).

 

(d)  £209,142,083 being the aggregate of the sums which the Council estimates will be payable for the year into its council fund in respect of redistributed non-domestic rates, revenue support grant or additional grant (RSG + NNDR).

 

(e)  (£979.07 being the amount at 3(c) above less the amount at 3(d) above, all divided by the amount at 2(a) above, calculated by the Council, in accordance with Section 33(1) of the Act, as the basic amount of its council tax for the year (Average Band ‘D’ Tax for NCC including Community Councils).

 

(f)   £250,336.69 being the aggregate amount of all special items referred to in Section 34(1) of the Act and detailed below (Community Council precepts).

 

 

 

 

(g) £974.61 being the amount at 3(e) above less the result given by dividing the amount at 3(f) above by the amount at 2(a) above, calculated by the Council, in accordance with Section 34(2) of the Act, as the basic amount of its council tax for the year for dwellings in those parts of its area to which no special item relates (NCC Band ‘D’ Council Tax).

 

 

 

 

 

 

 

 

 

(h)        Council Tax level for parts of the Council’s Area

 

 

 

Being the amounts given by adding to the amount at 3(g) above, the amounts of the special item or items in 3(f) divided by the amount at 2(b) for the specified area of the council.  These amounts are calculated by the Council, in accordance with Section 34(3) of the Act, as the basic amounts of its council tax for the year for dwellings in those parts of its area to which one or more special items relate.

                        (i)        

 

 

 

Being the amounts given by multiplying the amounts at 3(g) and 3(h) above by the number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in the valuation band D, calculated by the Council, in accordance with Section 36(1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

 

4.         That it be noted for the year 2015/2016, that the only major precepting authority has stated the following amount in precept issued to the Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings shown below:-

 

 

 

 

 5.        That having calculated the aggregate in each case of the amounts at 3(i) and 4 above, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby sets the following amounts as the amounts of council tax for the year 2015/2016 for each of the categories of dwelling shown below:-