Agenda item

The Presiding Member introduced the report and mentioned that this was one of the most difficult budgets he had seen and asked that council colleagues deal with this item respectfully.

 

The Leader presented the report to budget and Council Tax 2023/24 report to colleagues. It was an integral part of the Council’s budget setting processes and followed the detailed budget proposals that the Cabinet agreed at our February meeting, during which we recommended an 8.5% increase in Council Tax.

 

The Leader reminded everyone, as the ‘Administration’, the Cabinet made decisions on the allocation of resources and Full Council made the final decision on the Council Tax level only. Council was to agree the Council Tax for 2023/24 and via this, the Council’s total net budget.

 

The detailed recommendations were outlined in the report itself, however, in summary, Council was asked:

 

To note the extensive consultation exercise that has been completed and taken into account by Cabinet when finalising the detailed budget.

 

To note the Head of Finance’s recommendations regarding the minimum General Fund balance and the robustness of the overall budget.

 

Most importantly, to consider and approve a Council Tax increase for Newport City Council of 8.5%, a Band D tax rate of £1,380.13, and the overall revenue budget shown in Appendix 1.

 

In doing so, to approve the formal Council Tax resolution, which incorporated the Police and Crime Commissioner for Gwent and Community Council precepts and was detailed in Appendix 3.

 

As well as this, Council was asked to note the Medium Term Financial Plan and the financial context, note Cabinet’s approval of the plan and the fact that this was subject to ongoing review, and note and approve the Council’s reserve strategy and transformation fund protocol.

 

The Leader first went through the budget proposals with Council.

 

This particular budget process was one of the most challenging in recent times. High levels of inflation, which were impacting residents and businesses alike, were also impacting significantly upon the Council’s finances. This was evident in terms of pay awards and energy costs, as well as the payments we make to our service providers. Coupled with a significant increase in demand for services, particularly in certain services, it led to a stark budget position and a significant gap between projected costs and funding to be addressed.  

 

Addressing that budget gap, and achieving a balanced budget, was done in a number of ways, including additional funding from Welsh Government, savings across a range of services and the recommended Council Tax increase.

 

Although savings were required to balance the budget, we tried to minimise the impact upon services as much as possible as well as investing significantly in a number of services. These vital investments were set out in February Cabinet meeting, taking account of the feedback received from the public consultation.

 

The key priorities, as highlighted within the report, would see significant investment as we continued to recover from the last two years include the following:

 

·        Including the additional funding outlined during the recent Cabinet meeting, we were committing a total of £9m towards the pressures being faced by schools in 2023/24. This funding comprised mainly recurring funding, supplemented by some targeted one-off use of reserves;

 

·        £13.9m investment in social care, which included funding to pay care workers the Real living Wage from April 2023, additional provision to cover the risk of higher ongoing costs in the sector and significant increased demand for both Children’s and Adult Services;

 

·        £3.6m for homelessness provision to support the Welsh Government directive to ensure that there were no rough sleepers in Newport;

 

·        £1.7m to make good the shortfall in the NJC pay award for 2022/23.

 

A number of these investments, coupled with the withdrawal of certain savings that were consulted on, demonstrated Cabinet had listened to the views of Newport residents and were doing the most we can for the most vulnerable citizens of our city.

 

The Leader turned Council’s attention to the recommended Council Tax increase for 2023/24. As announced at the February Cabinet recommended an 8.5% increase, which was lower than the figure consulted on. Cabinet listened to the views of Newport residents and the reduced increase demonstrated this.

 

Whilst it was understood that an increase of this size was challenging for residents, at a time when costs of other household bills were increasing, the Council was facing the same cost pressures, coupled with a comparatively low rate of Council Tax to other Welsh local authorities.  Before a decision was made on the level of Council Tax that was being proposed today, the Leader outlined the following points:

 

-         The focus was often on the percentage increase, that was used as a means of comparing the relative increases in other areas. The monetary values were however more relevant. In this respect, Newport continued to have one of the lowest Council Tax rates in Wales and the UK and the monetary values the percentage increase generated was less than the value an equivalent percentage increase would generate in nearly all of the other councils in Wales.

 

-         To explain in more detail, for the monetary value the 8.5% generated, which was £2.08 a week for a Band D property, almost two thirds of Welsh councils would need to increase Council Tax by 7.5% and less to achieve the same monetary increase.

 

-         Most properties in Newport ware Band A – C and an 8.5% percentage increase would increase weekly bills by £1.39, £1.62, and £1.85 respectively. In cash terms, these were relatively modest increases but the total monetary value it generated was needed for the budget, in order to preserve the Council’s most important services. 

 

-         For over a decade our position was consistent as we remained second/third lowest Council Tax levels in Wales. Even with an 8.5% increase, this position was unlikely to change.

 

Whilst there was a number of financial pressures over the medium term the Leader was pleased that Cabinet managed to respond to the concerns raised by residents and reduce the Council Tax increases accordingly.

 

Despite the challenges faced, a way through this process was found to balance this year’s budget without the need for a general use of reserves. Some may question the decision not to use reserves but using reserves would only store up problems for future years. Whilst the decisions taken in relation to savings was not easy, balancing the budget without using reserves was the responsible thing to do and would stand the Council in better stead going forward and put us on a more sustainable footing for the medium term.

 

The Leader thanked Cabinet colleagues, to everyone that contributed to the consultation and officers who contributed to balancing the budget.  The Leader felt that this was a fair, sustainable and responsible budget.

 

Councillor D Davies seconded the report and reserved her right to speak.

 

Councillor Morris requested an amendment to the motion:

 

Amendment to the motion moved by the leader as set out in the budget report

 

The amendment is to refer the budget back to the Cabinet for re-consideration on the basis of the following suggestions.

 

§  To invest a further £160k in the Environment and Public Protection service with a suggestion of deleting the saving proposal to move to three weekly residential and garden waste collections.

 

It is appreciated that Cabinet will ultimately agree how to utilise this investment but we ask that it be considered for the three weekly waste collection.

 

§  To reduce Council Tax increase from the 8.5% currently proposed to a more acceptable level

 

§  To keep the budget in balance after the costs of these by utilising reserves to do this for 2023/24. Cabinet will need to identify the reserves.   

 

Councillor M Howells seconded the motion and reserved his right to speak at the end of the debate.

 

Comments from Councillors regarding the amendment proposal:

 

§  Councillor Harvey asked where were the figures from the reserves and how would the Lliswerry Independent group balance the budget.

 

§  The Presiding Member invited Councillor Morris to speak on the amendment to the motion.

 

§  Councillor Morris appreciated the position that the Council was in and cared for the people of Newport during these dark times. Councillor Morris accepted that the three weekly bin collection was to come to Newport due to climate change but felt that it was too soon as residents could not cope with the system.  Councillor Morris referred to comparisons of the small size bins and household sizes and reduced access to the tip. Councillor Morris requested that this be delayed until council was prepared and had processes in place for three weekly bin collections.

 

Councillor Morris then discussed the proposed alternative budget. The UK was seeing a reduction of £69 per month to their income due to the cost-of-living crisis.  Food banks for children was arranged within his local ward and every penny made a difference to residents. 

 

§  The Presiding Member advised Councillor Morris that his three minutes was up and invited him to speak at the end of the debate.

 

§  Councillor Batrouni mentioned that, with his cabinet colleagues he was challenged by council group colleagues to meet with officers to discuss how the budget could be balanced and agreed that these were dark times. Councillor Batrouni also asked where the money would come from. It was very important that the budget was balanced. Councillor Batrouni mentioned by going into £160K of reserves, this would be using the internal borrowing mechanism and would mean that the Council would have to externally borrow and pay more interest, which the council could not afford.

 

§  Councillor Reynolds asked as a point of clarification with regard to the extra investments and cuts in three weekly collections why there was no explanation as to where the extra money would come from.  Councillor Reynolds and his colleagues were aware of how much residents were suffering. 

 

§  Councillor Whitehead felt that, from feedback in his ward, the three weekly bin collections was a scary proposal and the fear was that the cost of dealing with extra fly tipping would be expensive although the saving might take into consideration the fly tipping aspect. Councillor Whitehead understood that it was very difficult for Cabinet and officers to balance the budget and felt that Councillors Morris, Batrouni and Reynolds made valid points and acknowledged it was a difficult task.

 

§  Councillor Harvey reiterated there was no figure put forward and reiterated that councillors took the budget seriously. The council tax increase would also help the council tax reduction scheme and help those residents in financial difficulty. Councillor Harvey reiterated that it was difficult situation and that the budget consultation was extensive, taking into consideration the public opinion as well as protecting services such as social services and education, which was a greater priority.

 

§  Councillor Sterry referred to bin collections and said that Newport was known as the fly tipping capital of Wales, therefore moving to three weekly bin collections would make matters worse.  Councillor Sterry also felt that it was the wrong time for a 8.5% increase in Council Tax.

 

§  Councillor Howells recognised that we were in the middle of cost-of-living crisis and that inflation was on the increase.  Councillor Howells felt that the budget proposal would hit residents in the pocket at a difficult time.  Earlier this year there was an underspend in 2021/22 of £7.8M which was set aside by Cabinet to help residents in the cost-of-living crisis. At February Cabinet this money was put aside to boost reserves for capitol use.  The money used to fund the entirety of the deficit would have resulted in a 0% increase in Council Tax.  Whilst Councillor Howells was not advocating that this was the right approach, however, using £2M of money towards a council tax reduction to 5.68% and fund the three weekly bin collections, using half of the money would have reduced the Council Tax money by 6%.  Councillor Howells understood the pressures on climate change to reduce waste and increase recycling for future generations and Newport was good at recycling.  We therefore needed to take the opportunity to work with communities and businesses to build some resilience, facilitate proper engagement and implement a three year strategy of change management which was well thought out and not a knee jerk reaction which would move the problem from bins, to country roads and housing estates. Councillor Howells once again stated that he seconded the proposed motion amendment for an alternative budget and for Cabinet to consider the figures provided, which was to reduce the Council Tax to 5.68% by using £2M in the capitol reserves.

 

§  Councillor Thomas referred to £69 per month cut in the UK which would add to the cost-of-living problem.  What was proposed in an increase in council tax would not come close to that amount and would not affect residents of Newport below band D.

 

§  Councillor Al-Nuaimi spoke against the amendment and whilst he felt that the Lliswerry Ward members provided an alternative budget with compassion for residents, it went against the Council’s Standing Orders because it was council that set the Council tax rate and not Cabinet. Councillor Morris could have come with an alternative figure to discuss. It was not what everyone considered a fair budget but under the circumstances was the best that could be offered.  It was important to balance a budget and this needed to be done at Council this evening.  Councillor Al-Nuaimi thanked all officers and Cabinet for their hard work and contribution, balancing the budget at this difficult time. The Presiding Member added that the proposed alternative budget was for Cabinet to consider then bring back to Council for reconsideration.

 

§  Councillor Marshall felt that the motion was ambiguous, and whilst the proposed budget from Cabinet was a hard decision, it was a fair budget.  It was also still one of the lowest council taxes in the region.  Councillor Marshall would therefore vote against the amendment.  Finally, there would be financial implications set by Welsh Government if Newport City Council did not meet the three weekly criteria.

 

§  Councillor Forsey highlighted that the savings with three weekly bins collections, was £320K per year and Newport City Council would be fined £500K per year if we did not meet the recycling targets set by Welsh Government and therefore could not afford this.  There would be a programme of working with residents, communication and education programme.  New recycling containers would be issued to help residents with the three weekly bin collections.  There were currently more than 1.5M people in Wales were on three or four weekly bin collections. 18 out or 22 Local Authorities in Wales were either on three weekly bin collections or were consulting on it.  In terms of managing, Councillor Forsey had seen fly tipping whilst litter picking and felt it was more to do with the character of the person doing the fly tipping rather than residents being forced to fly tip.

 

§  Councillor Morris concluded that in relation to the 8.5% was a small amount of money, however, it was a choice and he was asking if Cabinet could be reconsider reducing it which would make a difference to those residents struggling and using food banks. 

 

Councillor Morris therefore wanted the amendment moved and requested a recorded vote to reflect this.

 

As there were not five councillors supporting the amendment the recorded vote was not taken forward.

 

The Leader closed the debate by adding all members agreed that balancing the budget was very difficult and that these were unprecedented times and agreed with Councillor Morris and Howells in light of the cost-of-living crisis. With regard to the amendment, the Leader agreed with Councillor Whitehead’s comments, all members of the council had a collective duty and responsibility to support the budget. Under the financial guidelines, the strategies considered by Cabinet were prudent, affordable and sustainable and we needed to take a collective responsibility on that.  On the proposal of an amendment, it was suggested that Cabinet refer the budget to invest £160K.  It was a £320K saving over two years and it was proposed to use reserves to cover this. A proposal to reduce council tax by 1% would take £651K out of the revenue budget.  This would reduce the Council Tax on a Band D house by 24pence per week. The Leader considered that keeping Oaklands and Spring Gardens open and protecting the vulnerable was the more important option and therefore rejected the amendment.

 

Councillor Mogford, Morris, Howells and Sterry wanted to invoke Standing Order 7.5, the right to require individual votes to be recorded.

 

The Presiding member asked Council to put it to the vote for the amendment motion was not carried due to a majority vote, therefore Council went back to the original motion.

 

Resolved:

 

That Council declined the Amended Motion to the budget.

 

Comments from Councillors on the Budget proposals:

 

§  Councillor Evans referred to Labour budget settings in the past. Councillor Evans referred to the effect that the Council Tax increase would have on Band D households and that in Newport during 2013-14 the average B and D was £855 per year, which would now be £1,380 per year. Torfaen County Borough Council raised their Council Tax by 2%.  In addition, debts of £6M was also written off over the past five years. Councillor Evans also referred to payment for a vacant unit in Friars Walk. Councillor Evans requested that a recorded vote be taken at the end of the debate. 

 

The Presiding Member reminded Councillor Evans that five members of the Council would need to support a recorded vote.  Councillors Routley, Fouweather, Reeks, Jones and Sterry also requested a recorded vote at this point.

 

§  Councillor Clarke supported the Council Budget.

 

§  Councillor Corten also supported the Council Budget.

 

§  Councillor Reynolds referred to the 2% raise in Torfaen, this would mean however that band D houses in Torfaen would be paying approximately £200 more per month than Newport residents.  It was important to support the vulnerable people in Newport and Councillor Reynolds was proud of Cabinet colleagues setting the budget under the difficult circumstances.

 

§  Councillor Cocks acknowledged the incredible work carried out by Cabinet and officers of the Council in balancing the budget.

 

§  Councillor Screen supported the Council Budget.

 

§  Councillor Forsey went through the positive reasons for recycling and reflected on the environment and that Council had declared an environment and ecological emergency in the recent past. In addition, 30% of what was in bins could be recycled, 20% was food which could also be recycled.

 

§  Councillor Fouweather was against the 8.5% Council Tax increase and referred to those that took part in the consultation who were against three weekly bin collections and asked that the budget be reconsidered.

 

§  Councillor Routley referred to Spring Gardens which had 33 bedrooms on short term respite care and no nursing provision provided.  Dementia affected over 2,000 residents in Newport, a dementia friendly city was cutting the budget by £300K.

 

§  Councillor Hughes thanked everyone that contributed to the consultation. The Council Tax rise protected most the vulnerable, dementia services as well as mental health services. 

 

§  Councillor Reeks felt that the Council caused stress to scores of families who use vital social services and went through reduction in services including three weekly bin collection.  Councillor Reeks therefore did not support the Council Tax rise and urged Cabinet to reconsider.

 

§  Councillor James was grateful for Cabinet’s improved offer but felt it had not gone far enough. The most vulnerable residents were still feeling the burden of this budget.  Fairness Commission mentioned that the public were not provided with enough information on the impact of the proposals and that Council was not meeting its own basic requirements under the Equalities Act in relation to Fairness and Equality Impact Assessments.  Councillor James felts it was untrue that the Council was out of choices.  Neath and Port Talbot Council, a rainbow coalition put forward a budget with no service cuts, redundancies and a 4.5% increase in Council Tax using reserves. This Council’s reserves last year were reported at £130M put forward a budget using reserves. Whilst there was a legal requirement to balance the budget there was no reason to vote this proposed budget through and the Council would have to work hard to bring a budget forward that all parties agreed upon. Councillor James was therefore against the budget proposal and also moved for a recorded vote.

 

§  Councillor Batrouni referred to previous statement regarding internal borrowing and supported the Council Budget put forward by Cabinet.

 

§  Councillor Lacey mentioned that no opposition member had approached her to discuss savings against her portfolio.

 

§  Councillor Hourahine considered the alternative budget was not reasonable and commended colleagues and officer on their hard work.

 

§  Councillor Davies mentioned the severe cuts that had impacted on the Council and social services and education were considered in the budget and that Cabinet cared about the residents of Newport.  In response to Councillor James, Councillor Davies also mentioned that the Fairness Commission failed consider the support mechanisms that Newport City Council had in place.  An example of this was the Council Tax Reduction Scheme, unanimously voted on at last Council.

 

§  Councillor Morris answered Councillor Lacey’s point that no one had approached the Cabinet Member. Councillor Morris said that they had got involved with residents therefore their alternative proposal was in light of discussions with residents.

 

§  The Leader thanked all colleagues who engaged in the debate and speaking on behalf of the citizens of Newport. This was Newport City Council’s budget and the Leader wanted to pick up on openness and transparency, one opposition member queried a YouTube post which scare mongering, the Leader mentioned that this was letting members of the public know the truth of the position in Newport regarding the budget.  We heard reference to different council budgets and it was pointed out that in Wales there was a social partnership where government worked closely with Trade Unions and the work force. The Leader highlighted the services provided to citizens from the cradle to grave. From registration services, trading standards, environmental health, housing standards, schools, parks and cemeteries etc. Newport City Council provided over 800 services to citizens of Newport, people paid for more than for a bin collection. Newport would continue to provide a strong, steady, responsible local government delivering a fairer, greener Newport. The Leader therefore commended the budget to the Chamber.

 

The Presiding Member took the following recorded vote:

 

	Councillor Name	Apologies	For	Against	Abstain
1	Paul Cockeram
2	Allan Morris			1
3	David Mayer		1
4	Miqdad Al-Nuaimi		1
5	Matthew Evans			1
6	Malcolm Linton		1
7	David Fouweather			1
8	William Routley			1
9	Martyn Kellaway			1
10	Trevor Watkins		1
11	Ray Mogford			1
12	Kate Thomas		1
13	Deb Harvey		1
14	Jane Mudd		1
15	Kevin Whitehead			1
16	Deb Davies		1
17	Mark Spencer		1
18	Carmel Townsend			1
19	Janet Cleverly			1
20	Stephen Marshall		1
21	Jason Jordan			1
22	Laura Lacey		1
23	Phil Hourahine		1
24	Jason Hughes		1
25	James Clarke		1
26	Yvonne Forsey		1
27	Farzina Hussain		1
28	John Jones			1
29	Gavin Horton		1
30	Andrew Sterry			1
31	Mark Howells			1
32	James Peterson			1
33	Pat Drewett		1
34	Claire Baker-Westhead		1
35	Stephen Cocks		1
36	Rhian Howells		1
37	Beverly Perkins		1
38	Dimitri Batrouni		1
39	Matthew Pimm		1
40	Paul Bright		1
41	Allan Screen		1
42	John Reynolds		1
43	Emma Stowell-Corten		1
44	Tim Harvey		1
45	Alex Pimm		1
46	Saeed Adan		1
47	Debbie Jenkins		1
48	Chris Reeks			1
49	John Harris
50	Beverly Davies		1
51	Lauren James			1
	Total		33	16

 

Resolved:

 

That Council

 

Revenue budget and council tax 23/24 (section 2-8)

1              Noted that an extensive consultation exercise was completed on the 2023/24 budget proposals.  Cabinet have taken this into account in recommending final details of their budget.

 

2              Noted the Head of Finance’s recommendations that minimum General Fund balances could be maintained at a level of at least £6.5million, the confirmation of the robustness of the overall budget underlying the proposals, subject to the key issues highlighted in section 7.

 

3             Considered and approved a council tax increase for Newport City Council of 8.5%, a Band D tax of £1,380.13; and the overall revenue budget shown in Appendix 1.

 

4             Approved the formal council tax resolution, included in Appendix 3 which incorporated The Police and Crime Commissioner for Gwent and Community Council precepts.

 

Medium term financial plan (MTFP) (section 5)

5             Noted the MTFP and the uncertain financial challenges over the medium term in the context of economic challenges, increasing demand within service areas and potential financial issues on school budgets.

 

6             Noted Cabinet’s approval of theimplementation of the three-year plan, including all budget proposals, as summarised within the medium-term financial plan (Appendix 4).  Considering point 5 above it should be noted that financial projections were subject to on-going review and updating.

 

7             Noted and approved the Council’s reserves strategy and transformation fund protocol.  Estimated reserve balances as of 31 March can be found within Appendix 5a.