Agenda item

This item will include a motion by the Lliswerry Independent Group to amend the proposed budget.  A copy of the proposed amended budget may be found in in the report pack for this meeting.  No other alternative budgets were received prior to the deadline set out in Rules of Procedure in the Council’s Constitution

 

The Presiding Member reminded members of the Council’s procedural rules in relation to proposed amendments and advised that there was an alternative budget proposal to amend the Council proposal which was circulated for information.

 

The Presiding Member invited the Leader of the Council to present the Council Tax report, approved by the Cabinet on 14^th February 2024, for the 2024/25 financial year. 

Leader’s comments on the proposed budget

 

The Leader said that the Cabinet continued to develop the Council’s budget in a very challenging environment. Whilst inflation decreased over the year, the legacy of the covid pandemic, societal issues and the cost-of-living crisis were significant issues affecting the Council services.

 

Within that context, several key issues had to be addressed in the budget, including:

 

o   The demand on Council services continued to increase, particularly in housing services and children’s social care. There continued to be huge pressure on the most vulnerable families, individuals, and communities.

 

o   The Council’s spending levels were historically lower than comparable Councils in all service areas. The increased capacity required to deal with increasing demand for services and support must be acknowledged.

 

o   The Council has a vast amount of infrastructure and assets it is responsible for, and this is integral to delivery of services. Additional funding was required so that these could be maintained.

 

o   Inflation increases must be considered. Newport is a Living Wage employer, and the budget continued to ensure the external organisations the Council works with also pays a living wage.

 

The budget consultation was extensive with nearly 1,400 public responses received for the draft budget. The summary responses from the consultation and the minutes of the meetings with scrutiny, schools’ forum and unions were included in the papers. On those budget savings specifically consulted on; the consultation confirmed that almost all of them met with the majority or relatively high levels of support and agreement with the public.

 

The funding increases and decisions on budget investments recommended would ensure:

 

o   Increased school funding – both by investing more funds over and above cost inflation increases and by not making savings from school budgets. The Council is investing nearly £10m into school budgets for increased costs and increased pupil numbers.

 

o   Continued support for the most vulnerable families and individuals in communities. Investing nearly £12m in homelessness services, social care and additional learning needs budgets for cost increases and higher demand.

 

o   The need for investment in highway infrastructure and assets for service delivery.  Direct investments in these areas and the capital financing budgets contributed towards this.

 

The budget proposed £4.5m of new savings of which nearly £4m were efficiency savings with no service impacts. The consultation confirmed that residents understood and agreed with the vast majority of those savings.

 

Councils across the UK are finding it difficult to deliver more services with the funding available to them. Savings which do not have significant impact on the services provided are becoming harder and harder to find.

 

 

The overall budget therefore struck a balance between increased funding for some areas with new savings and ensured that residents continued to pay one of the lowest rates of council tax across Wales and the UK. It represented a relatively small increase of £1.75 to £2.26 per week for those houses in Newport’s most common bandings and the council tax reduction scheme continued to support those households who were eligible.

 

Today, Newport has the third lowest rate of Council Tax in Wales and has maintained that position for many, many years. Council Tax was not higher, in relative terms, to other Councils and the Council had recommended and implemented £70m of savings over the last decade. Demand for much needed services which help the most vulnerable individuals and families have increased significantly over the last decade and in particular over the last three or four years, which funding levels have not kept pace with.

 

The Council has met the challenge of that increasing demand and found significant savings over that time. In the context of continuing increases in demand for services here in Newport, and savings found over the last decade, the increase in Council Tax of 8.5% is needed.

 

Producing a balanced budget was a difficult process and the Leader thanked Cabinet colleagues and the officers who worked tirelessly to ensure that Cabinet was able to propose the balanced budget and Council Tax recommendation being presented today. The Leader and Cabinet colleagues believed that this was a fair, sustainable, and responsible budget, prioritising the most vulnerable residents and therefore asked the Council to support the report.

 

The Leader reserved the right to speak after the debate. 

 

Councillor D Davies seconded the proposal and also reserved the right to speak after the debate.

 

The Presiding Member announced that an alternative budget had been submitted and declared an interest in relation to the proposed alternative budget.  The Presiding Member therefore announced that he would vacate the chair and invited Cllr. Screen, as Deputy Presiding Member, to take the chair for the next part of the meeting.

 

Cllr. Fouweather raised a point of order with regard to the appointment of the Deputy Presiding Member and in particular stated that Cllr. Screen had never been appointed to that role.  The meeting was adjourned at 5.54pm in order to enable officers to investigate the matter.

 

The meeting was reconvened at 6.19pm.  The Monitoring Officer advised that members would need to elect a chair to replace Cllr. Cockeram for the next item of business. 

 

Cllr. Evans proposed that Cllr. Screen should chair the meeting in Cllr. Cockeram’s absence.  This proposal was seconded by the Leader.  A vote was conducted, and it was agreed unanimously by Council that Councillor Allan Screen should take the chair during Cllr. Cockeram’s absence.

 

Councillor Screen then took the chair of the meeting.

 

The Deputy Presiding Member invited Councillor M Howells to speak on the alternative proposed budget. 

 

Councillor Morris seconded the motion and reserved the right to speak after the debate.

 

Councillor Lacey suggested that Councillor Sterry declared an interest as he lived in Thompson Avenue, which was included within the alternative budget.

 

Councillor Sterry therefore declared an interest as a resident of Thompson Avenue.

 

The Lliswerry Independents’ Proposal

 

Councillor M Howells presented the Lliswerry Independents’ alternative budget proposal to Council for debate and agreement.  He said that the principle of the budget proposal is to bring the council tax increase closer to inflation because residents are saying that they are really struggling with rising costs and the cost-of-living crisis. The alternative budget proposes to increase council tax by 4.63% instead of the 8.5% proposed by Cabinet.

The amendments to the budget aren’t significant and it is hoped that colleagues have had a chance to consider them in detail prior to the meeting today.

 

Councillor Howells went on to state that the motion made the following proposals:

•             To remove the role of the presiding member and revert to the Mayor chairing the council meetings, saving £9k.

•             Reduce the publication of Newport Matters from 2 monthly to 4 monthly. This will not only save costs of £21k it will help to reduce the Council’s carbon footprint by reducing the amount of paper we use. It might be possible to prepare some digital content to replace the reduced posted service.

•             To remove the Leader's car and reduce the driver budget accordingly.  The Leader should be able to travel to engagements by themselves and doesn’t require a car and chauffeur.  This would save £17.5k. The Mayor should retain their car and driver as asking them to travel themselves and robe and de-robe by themselves would be more challenging.

•             To remove the proposed new Newport Live contract manager with a saving of £65k. At Scrutiny, no evidence was forthcoming that the contract is not working well or that the post is needed for betterment and therefore is considered too much of a luxury whilst cutting other posts are being cut from budgets elsewhere.

•             To delay the implementation of the closure of the Civic centre for 2 days per week. This will require additional investment of £91k. There is an ongoing asset management review which is looking at all the council’s assets and what best ways we can streamline them. The saving proposed here is being considered prematurely and without undertaking a thorough audit of all Council assets and the best use of them. There is no data on how many people work at the Civic Centre for 5 days each week and cannot work from home. Until we properly understand the impact of this decision, more work should be done in line with the ongoing asset management review.

•             To re-instate the maintenance of the watercourse at Thompson Avenue, spending £30k. The decision to remove this work as part of budget savings last year will have a devastating impact on flood risk to hundreds of residents and should be reversed.

•             Councillor Howells went on to say that the bulk of the saving in the proposed alternative budget is because of a bold proposal to use some reserves to help with the challenges currently being faced in Children’s Services for the next two years. It is understood that reserves are for a rainy day and shouldn’t be used long-term to prop up continued revenue costs. However, as part of this proposal, officers would be tasked with producing a sustainable strategy that moves away from using out of area placements in children’s social care within the next two years.  This is realistic and we want better for our looked after children. It also is in line with the Welsh Government’s aspirations to remove profit from the care of looked after children by 2027.

 

Whilst the use of reserves isn’t always ideal, there is currently a forecasted underspend in 23/24 of circa £2.3 million which is likely to replenish the reserves in the first year in any event, so the use of reserves is small and time limited and it is the right time and circumstances to do it.

 

It is proposed to keep the majority of the investments proposed by the Cabinet, with the exception of investing £700k in capital maintenance as opposed to £1.2m. Up until the final Welsh Government settlement there was a proposal for £500k in this area, and it is proposed to increase that by £200k overall to £700k.

 

Comments of Councillors on the proposed amendments:

 

§  Councillor Mogford did not support the 8.5% increase in council tax and therefore supported the alternative budget, as he felt that the Council had to find ways to be creative in saving money and reducing the impact on residents.  Councillor Mogford asked if the Leader needed to declare an interest in using a Civic car.  The Monitoring Officer confirmed that this was not the case as the car was owned by the Council and used for Civic duties.

 

§  Councillor Whitehead congratulated Councillor M Howells on his hard work in providing an alternative budget and felt that there were similarities to the original proposed budget.  Councillor Whitehead considered that residents’ opinions should be taken on board and took priority and therefore supported the alternative budget.

 

§  Councillor Marshall opposed the alternative budget and highlighted the risks to the proposals in relation to earmarked reserves for Childrens’ Services and to the Council’s capital programme. Councillor Marshall also mentioned the statutory responsibility to provide emergency placement for young people when required and that we must not forget this as a corporate parent. The Council tax reduction would also affect the support for social services provision, which was in high demand.

 

§  Councillor Hughes opposed the alternative budget which he felt exposed vulnerable young people in care.  This was too important a budget to get wrong and therefore did not support the alternative budget.

 

§  Councillor D Davies noted with concern the use of £4.28M in reserves to bring out of county placements back.  Social Services worked hard to ensure children stayed in the city, which did reduce costs. In addition, a school had been created for children with Autistic Spectrum Disorder.  Councillor Davies therefore did not support the amendment.

 

§  Councillor D Harvey did not agree with the use of reserves as outlined in the alternative budget and thought that report indicated that the Section 151 Officer did not support the budget. Councillor M Howells mentioned that the Section 151 Officer had met with Lliswerry Independent members, and he thought the Section 151 Officer was satisfied that the proposed alternative budget was balanced. Councillor D Harvey read out the alternative budget – The proposal to utilise earmarked reserves to fund the £2.264m Children’s Services out of area placements pressure for a two-year period will result in the Capital Expenditure Reserve reducing by £4.528m. Utilising reserves in this way reduces the scope to support emerging capital expenditure pressures, should they emerge over the medium term. Should such pressures be unavoidable, this would potentially create an unfunded pressure upon the Council’s capital programme. Whilst it has been suggested that future revenue underspends could be used to replenish reserves, this is not guaranteed and cannot be relied upon. Councillor D Harvey therefore concluded that she did not support the alternative budget.

 

§  Councillor Lacey sought clarification regarding funding for infrastructure and felt that the proposed alternative budget put pressures on the capital programme. Councillor Lacey did not support the alternative budget.

 

§  Councillor Clarke disagreed with the alternative budget, referring to the use of reserves, and that the same pressure could still exist in two years. Councillor Clarke also mentioned a recent survey that showed residents supported receiving Newport Matters.  Councillor Clarke also suggested that by removing the Civic drivers there was a potential to create a threat to the security of the Leader, in light of discussions that took place under Police Issues.

 

§  Councillor Cocks referred to the effect the alternative budget would have in relation to the cost of living and therefore did not support the report.

 

§  Councillor Sterry mentioned that the Council had £144M in reserves and that the proposed alternative budget was only considering using £4.5M of those.  Councillor D Harvey asked for a point of order as reserves were savings for a disaster.  Councillor Sterry added that the Council was in a state of disaster and referred to feedback, where 70% of residents said the council tax increase was too high.  In summary Councillor Sterry recommended their proposed council tax increase was more in line with inflation and asked councillors vote for the alternative budget.

 

§  Councillor Corten did not support the alternative budget.

 

§  Councillor Batrouni referred to out of area placements and transformation, which was costly and time consuming and therefore did not support the alternative budget.

 

§  Councillor D Davies asked for a recorded vote on the alternative budget.  Councillor Mudd, D Davies, D Harvey, Lacey, and Clarke supported this.

 

§  Councillor Forsey listed a number of UK councils that had submitted section 144 notices, declaring themselves bankrupt.  Councillor Forsey felt that the alternative proposed budget was focused on the short term and risky as the reduction in reserves increased the risk of capital funding being affected. Councillor Forsey therefore did not support the report.

 

§  Councillor Mudd spoke to the amendment and referred to a recent Newsnight programme which was described the challenges facing public service provision, as ‘the bedrock of society’.  There was a significant risk of bankruptcy for councils including in Wales if prudency was not exercised.  The way that reserves were managed and calculated was explained in the appendices and the Leader urged Lliswerry ward members to look at this. The Leader welcomed that the Lliswerry Independents had provided an alternative budget, but she could not support it. The Leader added that the Council needed to deliver on much needed capital support going forward including a new primary school in the Bettws area.

 

§  Councillor Morris considered that Councillors had a choice in raising the tax by 8.5% or by 4.6%.   Councillor Morris felt that the alternative proposed budget was not putting vulnerable people in danger.

 

Councillor M Howells concluded by saying that it was great to hear the debate around this and that colleagues gave the budget full attention considering the impact of decisions on the citizens of Newport. This should not be a rubber stamp exercise of a proposal from officers but a full debate on the impacts the decisions would have.

 

Councillor M Howells said that he heard the comments around utilising earmarked reserves and the risks that presented and referred colleagues to the comments from the Section 151 Officer in the alternative budget proposal. He referred to the officer’s comments regarding utilising reserves in this way, which reduced the scope to support emerging capital expenditure pressures, should they emerge over the medium term. He said that his emphasis was on “should they emerge”.  Councillor M Howells also considered that the Section 151 Officer had also referred to future revenue underspends that could be used to replenish reserves, as this was not guaranteed and could not be relied upon. He noted however from the last Council meeting that there was £41million of underspend in the last five years. Therefore, it was prudent and sensible to use a small number of reserves such as this. The minimum was likely to be £2.5M and a maximum of £4.7M. There was nearly £140M of reserves built up by good robust financial management.

 

Councillor M Howells said that the Section 151 officer dealt with risks in the original cabinet proposal. A small amount of risk was appropriate, and we must be bold.

 

Councillor M Howells said that using a small amount of reserves would help our residents out whilst a proper plan was put together to deal with the pressures on children’s social care. He considered it a sensible policy to use a small number of reserves (less than 4%) in a time limited way to ease the financial burden on residents who were feeling the pinch right now.

 

Councillor M Howells also drew attention to the Section 151 Officer’s comments which stated that by reducing the proposed rate of council tax increase to 4.63%, the Council was unlikely to improve its position, relative to other councils, in terms of the rate being one of the lowest in Wales. There was an element of unhappiness that Newport had one of the lowest council tax rates in Wales and a desire to put up council tax above inflation to catchup with other councils.

 

Councillor M Howells felt that the Council should be proud to have one of the lowest council tax rates in Wales. It was the reason people were moving to Newport in their droves and why Newport is the fastest expanding city in Wales. Increasing the council tax risked stifling growth considering the burden that higher rents and mortgages had recently on the housing market.

 

Councillor M Howells felt that the council tax increase was set to 8.5% and a budget was then set to match it, rather than looking at what was needed and then setting a budget increase that naturally flowed from that. This was backed up by the fact that the budget was prepared with a proposal of 8.5% which cabinet was satisfied balanced the difference between investment and spending. Further funding had come from Welsh Government which could be used to reduce that increase and the resulting burden on residents. But instead, further investment was made with no decrease of council tax for residents. Councillor M Howells fully supported investment in services but not at a cost burden to residents.

 

Budgets were hard to balance but, on this occasion, Cabinet had failed to consider what officers proposed to them.

 

Councillor M Howells felt this was a more realistic rate increase and proper scrutiny of spending residents’ money was required.

 

Councillor M Howells also requested a recorded vote on this issue.

 

The Monitoring Officer gave a role call for a recorded vote:

 

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

 

Following the roll call vote the amendment was defeated.

 

Cllr. Cockeram returned to the chair and invited comments on the substantive motion.

 

Comments of councillors on the substantive motion:

 

§  Councillor Drewett felt that this was a prudent budget and therefore supported the proposal for housing and community, transformation, environment, and public protection.  Councillor Drewett felt that the budget was made with due diligence considering the cuts the council was facing.

 

§  Councillor Spencer supported the substantive motion as families were struggling to pay bills and once the 8.5% was explained to residents they understood the reason for the increase.

 

§  Councillor Evans made comparisons to spending by the Council in the past and present and also referred to the council tax increase.  Councillor Evans felt that the increase was staggering and therefore did not support the budget.

 

§  Councillor Clarke commended Councillor M Howells on the alternative budget and made reference to no alternative being provided by the main opposition party.

 

§  Councillor Routley referred to the cost of living and also felt that he could not support the budget.

 

§  Councillor Batrouni referred to capital investment that would determine the success of the city.  There is a growing population in Newport and now is not the time to cut capital expenditure.  Councillor Batrouni therefore supported the budget.

 

§  Councillor Cocks felt that there was a UK wide crisis and therefore supported the budget.

 

§  Councillor Corten mentioned that the proposed budget was doing the best for our city and supported the budget.

 

§  Councillor Hughes referred to struggling costs and energy bills faced by residents and felt that this budget was supporting people of Newport through education.

 

§  Councillor Fouweather referred to the Council Tax increase and added that he would hold to account the Leader about the poor state of the roads in Newport that needed repair and therefore did not support the budget.

 

§  Councillor Mogford referred to services being provided and felt that the council could do better, such as repairing potholes.

 

§  Councillor Lacey supported the budget, and felt it was right to prioritise schools, social care and the most vulnerable.  Councillor Lacey also mentioned the infrastructure maintenance backlog of work of £90.4M in relation to road infrastructure and welcomed the £500K investment within her service area, and therefore supported the budget.

 

§  Councillor D Davies noted that £80M savings were made over last 12 years. Citizens had a right to a good quality of life and the right to access quality jobs, outstanding education and to be able to live safely within their homes. This was why Cabinet strived to set a balanced budget, but this meant increasing the council tax.  Across Wales, the cumulative average increase in council tax amounted to 8.25%.  This did not account for the different starting points where the majority of residents across Wales already paid a higher council tax and Newport residents who lived in an equivalent banded property. What the residents elsewhere received was more funding available for schools, social services, and street cleansing, where grant funding was minimal. The proposed increase would in the long-term increase revenue and funding to benefit residents of Newport. This equated to £1.50 per week. With this increase and prudent management of spending, the Council was able to spend additional £10M for schools. Therefore, Councillor Davies welcomed the proposes in the budget, which included a new primary school in Bettws.

 

The Leader thanked colleagues for their contributions to the debate and gave her closing comments. The Prudential Code required the Council to ensure the financial decisions were affordable, prudent, and sustainable and the Leader felt that the budget before Council today was exactly that. The Leader thanked Council colleagues for their comments and thanked senior officers for their hard work and effort to provide a budget that continued to support and deliver services across the city. The Leader also thanked partners and stakeholders for responding to the consultation, including Scrutiny Committee colleagues, headteachers, the schools’ forum, trade unions and members of the public for engaging in the consultation. In addition, the Leader thanked officers for supporting ward meetings, which enabled residents to come out and engage in discussion on the budget proposals. The Leader reflected on the comments made by colleagues and also reflected on balanced and fair comments made by members of the public, referring 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 they actually used, such as improving roads. The proposals before colleagues would deliver on this, and this budget struck the all-important balance. The Leader added that Council would protect and deliver for the people of Newport.

 

The Presiding Member asked for councillors to place their votes.

 

There was a majority vote supporting the council budget, with 31 for, 8 against and 2 abstentions.

 

The Council therefore resolved:

 

That Council -

 

Revenue budget and Council Tax 2024/25 (section 2 - 6)

 

1             To note the Cabinet’s budget proposals for the financial year 2024/25;

 

2             To adopt those budget proposals as the Council’s budget for 2024/25;

 

3             To note the Head of Finance’s recommendations that minimum General Fund balances can be maintained, in the short term, 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 5 of the report.

 

Medium term financial plan (MTFP) (section 3)

 

4             To note the MTFP and the potentially significant financial challenges over the medium term in the context of funding challenges and increasing demand within service areas.

 

5             To agree to the implementation of the three-year financial plan as set out in the report;

 

6             To note and approve the Council’s reserves strategy and transformation fund protocol as se out in Appendix 6 of the report and to approve the planned use of earmarked reserves, as set out in Appendix 5a of the report, including the proposed use of the Transformation Fund.