Agenda item

The Leader introduced the report, to colleagues which dealt with the 2024/25 Council budget, setting out the consultation results on the draft budget, further developments in budget assumptions and an update on the Council’s core and specific grant funding.

 

The Leader updated colleagues on the latest budget position today as outlined in the report. The Leader set out the Cabinet’s use of the available funds that would finalise the Cabinet’s 2024/25 budget recommendation to the Council to be considered on the 29 February.

 

Cabinet approved the draft budget on 10 January, which was subject to consultation to the 9 February, as the report outlined in section four; both with existing internal groups such as scrutiny committees and the school’s forum, trade unions and externally with the wider public.

 

There were also some significant developments in the core and specific grant for 2024/25 and updates to the budget assumptions. The Leader therefore brought Cabinet up to date.

 

Firstly, the Cabinet approved updates to existing and considered new budget pressures and savings shown in paragraph 1.3, Table 2 of the report. These included financial pressures and investments, the need to provide additional core funding to the housing service and increases to the Council’s revenue contingency budget; mitigated in part by additional efficiency savings from budget re-alignment in non-service budgets and additional council tax income from premiums recently agreed. These agreed budget adjustments updated the budget ‘in hand’ to nearly £1.3m as shown in Table 2. 

 

Secondly, the Welsh Government confirmed in the week before the meeting that it would be receiving an additional £25m of consequential funding from the UK Government stemming from their increased funding to Councils in England; this funding would be allocated to Welsh Councils in recognition of the significant pressures on budgets, particularly in social care and schools. Information was received over the last few days on how this would be allocated to individual Councils and Newport would be receiving an additional Revenue Support Grant (RSG) allocation of £755k, and an increase in social care-specific grant funding. This increased the current budget ‘in hand’ to just over £2m.

 

Key issues the Cabinet were mindful of in setting out its final budget recommendation included:

 

o   Demand on Council services continues to increase, significantly so in housing services and children’s social care. The impact left by the pandemic in 2020 and 2021 was still putting huge pressures on vulnerable families, individuals, and communities.

 

o   At the same time, the Council’s spending levels were lower than comparable Councils in all service areas. Whilst positive in many ways, the increased capacity required to deal with increasing demand for services and support must be acknowledged.

 

o   The Council had a vast amount of infrastructure and assets it was responsible for that are integral to delivery of services, such as roads, pavements, and buildings. Additional funding was provided for this to be maintained.

 

o   The Council’s own staff but also the staff in other organisations provide a wide range of services such as domiciliary care (home help) that support the city’s most vulnerable families and individuals. Cabinet was pleased to see the recent increase to the National Living Wage which recognised the cost increases over the last year. Cabinet was proud that Newport was a Living Wage employer, and able to ensure external organisations paid this.

 

The Council received nearly 1,400 public responses to the draft budget consultation and the summary of those and the minutes of the meetings that took place with scrutiny, the school’s forum and unions were included in the papers.

 

The consultation confirmed that virtually all proposals were met with majority or relatively high levels of support and agreement with the public.

 

In line with the context outlined and the feedback received, Cabinet reviewed the draft budget and considered how to allocate the budget ‘in hand,’ to be distributed as follows:

 

o   Funding of £700k for highways infrastructure and building maintenance, at £500k and £200k, respectively.

 

o   Allocation of £300k additional funding for schools, specifically earmarked within the schools funding formula for supporting children with additional learning needs.

 

o   £160k to the social services safeguarding hub, a vital service which supports families in crisis and is under unsustainable, on-going pressure of increased demands. 

 

o   Allocation of £595k to make provision for additional long-term borrowing and support capital programme costs.

 

o   Allocation of £150k to the homelessness budget, to assist with addressing the continued pressures being presented by the need for temporary accommodation. 

 

o   Allocation of £145k to address the issues and impacts presented by specific grant reductions.

 

These total £2.05m in total.

 

The overall budget strikes a balance between increased funding with on-going new savings and ensures that residents continue to pay one of the lowest rates of council tax across Wales and the UK. It represents a relatively small increase of £1.50 to £2.01 per week for those houses in Newport’s most common bandings and the council tax reduction scheme is there to continue to support those households who are eligible for support with this.

 

The funding increases and the Cabinet’s decisions on budget investments ensure:

 

o   increased school funding – both by investing more funds over and above cost inflation increases and by not making savings from school budgets.

 

o   continued support of the most vulnerable families and individuals in communities. The Council is investing nearly £5m in its homelessness services, social care, and additional learning needs budgets. Demand in these areas s increasing and this could not and should not be ignored.

 

o   Cabinet recognised the need for investment in the highway infrastructure and assets which are needed for service delivery and used by all residents within the city. The Leader reflected that more is needed but was pleased to have been able to make inroads here for the coming year.

 

Comments of Cabinet Members:

 

§  Councillor Davies noted that over the last 10 years the Council made over £80M of savings with challenging budgets and difficult decisions to protect the most vulnerable and those in need.  Efficiency savings alone would not balance the budget, hence difficult decisions being made regarding front line services whilst salaries increases were supported, and pupil numbers grew. It was good news that additional funding of £200K came from WG for Additional Learning Needs (ALN) against a backdrop of no cuts within the education budget.  Councillor Davies therefore supported the council tax increase and reminded colleagues that Newport would still have one of the lowest council tax bases Wales.  This would ensure that it was still affordable for residents and that those who were in financial difficulty received provision support through the council tax reduction scheme.

 

§  Councillor Harvey supported the 8.5% council tax premium and reflected that Newport was still in the lowest quartile for council tax throughout Wales. The Council provide over 800 services to the public. These services were not only funded via council tax but funding from other areas. This increase was supporting residents from cradle to grave with the provision of social services and education.

 

§  Councillor Marshall noted the significant breadth of services that the Council provided to the residents of Newport and the indispensable role these services played within the community.

 

Councillor Marshall noted that comparison with authorities in England revealed shared pressures such as homelessness, temporary accommodation, and child social care placements. Councillor Marshall was pleased that Welsh Government was providing financial support and safeguarding the Council from reductions, such as workforce grants and support in terms of requirements surrounding reduction in force (RIF).

 

Councillor Marshall added that despite being a budget for the upcoming financial year, this administration was committed to fiscal responsibility and prudence in delivery, even when the initial outlook appeared bleaker. Values were centred around safeguarding education and social services from cuts whenever possible, this was clear within the budget proposals. As a growing city, Newport faced new challenges and pressures, all of which were identified and addressed in the proposals.

 

In determining this year's council tax, focus was on protecting the most vulnerable and minimising the impact on residents. Councillor Marshall concluded that dedicated staff continue to perform their part to the highest standard, providing great initiatives, events, and support to residents and the city. Councillor Marshall extended his and colleagues’ gratitude to staff for their commitment to delivering the best services to the community.

 

§  Councillor Hughes mentioned that no council was immune to the financial challenges faced in this budget cycle. Social services faced challenges in meeting statutory duties, and staff facing these challenges would welcome additional investment in the safeguarding hub.  Councillor Hughes added that people depended upon the city and that the council would continue to keep people safe.

 

§  Councillor Lacey also approved the budget and the proposed 8.5% council tax.  Councillor Lacey was pleased to see £700k split between infrastructure assets and building assets. Councillor Lacey also referred to staff within her service area of infrastructure, who had received 784 out of hours service calls from February ’23 to February ’24which had a significant impact on funding.

 

§  Councillor Forsey mentioned that whilst there were budget cuts, focus should also be emphasised on what the council could do. In addition to education and social services, the council was still able to clean the streets, collect rubbish and deliver hundreds of other services to residents. Councillor Forsey also mentioned a programme to replace and refurbish children’s play areas within Newport parks and while most of these projects were supported by grant funding, these projects were delivered by the Council. This was achieved through the excellent staff engaging with residents, designing, planning, and overseeing this work. This was in additional to meeting the target to be net zero carbon by 2030 by decarbonising buildings, installing solar panels and electric vehicle (EV) charging points. Therefore, Councillor Forsey supported the budget.

 

§  Councillor Clarke added that this was the right budget for Newport and Cabinet had listened to people and professionals within the city and no decisions were taken lightly. Councillor Clarke referred to the increase in council tax and highlighted that it would be mean an increase of £2 per week, or £8 per month for most households. Councillor Clarke outlined the significantly higher increase in utility prices and inflation in comparison. Making these tough decisions maintained the services for the people of Newport and therefore Councillor Clarke supported the report.

 

§  The Leader thanked colleagues and the senior officer team at Newport City Council, for their hard work and effort to deliver a budget in the most difficult and challenging times for the public sector. The Leader also thanked partners and stakeholders for responding to the consultation, including scrutiny committee colleagues, the school’s forum, trade unions and members of the public. The Leader reflected on the balanced feedback from members of the public and referred to comments from one member of the public in relation to council tax who stated they were fine with the increase, but the money needed to go on services we actually used, such as improving roads. The Leader welcomed the support of the WG and recognised their challenging financial situation. 

 

Decision:

 

Cabinet considered:

 

Budget proposals and medium-term plan (section 3-5), and

 

1.      noted the formal consultation on the budget as outlined in section 4 and the feedback received, shown in Appendices 1 to 5.

 

2.      noted the equality issues and the Fairness and Equalities Impact Assessment (FEIA) on the budget proposals, shown in Appendix 13.

 

3.        reviewed and confirmed the final budget recommendations (Appendix 6 - 7), as currently summarised within the medium-term financial plan (Appendix 8).

 

4.        agreed the 2024/25 fees and charges of the Council shown in Appendix 12.

 

Overall revenue budget and resulting Council Tax 2024/25 (section 6 and 7), and

 

5.        noted the significant risks and uncertainties within budget planning and specific issues highlighted in Section 6 of this report and the mitigation in place to manage them. 

 

6.        recommended the detailed budget investments and savings and resulting Council Tax rate to full Council, noting that a formal resolution including the Police and Crime Commissioner for Gwent and Community Councils’ precepts be presented to Council on 29 February.

 

7.        recommended a council tax increase of 8.5%.

 

8.        approved expenditure and use of the Transformation Fund in line with the summary shown in Appendix 11b, noting they were based on detailed proposals reviewed by Cabinet in their January 2024 meeting.

 

9.        approved the repurposing of earmarked reserves as set out in paragraph 6.7.