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  • Agenda item

    2019/20 Budget and Medium Term Financial Projections (MTFP)

    Minutes:

    Before proceeding with the content of the report the Leader asked the Head of Finance to confirm some amendments to Appendix 5, 7 and 10 of the report.

     

    The Head of Finance confirmed:

     

    Amendments have been made to:

     

    ·        Appendix 5 – the Business Case relating to the Education Psychologist posts. 

    ·        Appendix 7 - Fees and charges for consultation

    ·        Appendix 10 – Projected earmarked reserves

     

    The Leader registered her concern at changes being made at this late stage and insisted that in future sense checks are done in advance of the Cabinet agenda being published.  The Chief Executive agreed this would be done. 

     

    The Leader introduced the report which is the main finance report requiring Cabinet’s attention.  She confirmed the figures in the report do not take into account the news received from Welsh Government recently; the additional funding will be built into the report in February 2019 by which time it is hoped the final settlement and grant notifications will have been received from Welsh Government.

     

    Whilst work has been ongoing for a few months on the budget proposals, this report starts the formal public reporting on the budget and consultation on the proposals shown – which will go on until the end of January 2019.

     

    The Leader stressed the importance for all to understand the challenging context this Council, like all others, are setting budgets within.  It is the reason we, like all others, have to propose significant levels of budget savings and increases in Council Tax.

     

    The Council is facing about £12million of cost pressures for next year alone; however, funding for this is not increasing.  The Revenue Support Grant funds approximately 77% of the budget but as the report shows, the indicative settlement for this grant confirmed an increase of only about £300,000 for next year.  Clearly, there will be a shortfall and in order to achieve a balanced budget, as councils are required by law to do, Council Tax will have to increase and further savings will need to be made.

     

    The Council’s savings proposals are in three categories. Those that the Cabinet will need to confirm and are formally consulting on – shown in Appendix 2 and those being taken by Cabinet Members or Heads of Service shown in Appendix 3. These are for the more minor policy changes, efficiencies or low impact changes and these will be implemented after the usual decision making processes are complete.

     

    Council Tax is a key issue as it only funds about 23% of the council’s net budget.  Therefore, when faced with a revenue support grant settlement which forms the remaining 77% of funding, and is not increasing, council tax has to go up disproportionately to provide any meaningful mitigation.  

     

    It was noted that Newport’s Council Tax is very low compared to others; it is the second lowest Council Tax in Wales and one of the lowest in the UK.  Newport’s Council Tax is £184 less than the Welsh average and this represents about £10million less income to the Council.  The proposed Council Tax increase would mean a weekly increase of £1.41 for a Band D property; most Newport residents will pay less than that as most of the homes are in lower bands.  Whilst the percentage increase looks high, in monetary terms the increase is more modest than the percentage might suggest.  Cabinet is acutely aware that this is an increase nonetheless but these proposals include nearly £7million of savings and only about £3million of increased Council Tax income and it is felt this is a fair balance in the tough circumstances being faced by the Council. 

     

    The Council has brought about positive key investments within this budget.  Schools will receive a 3% increase in funding; further investment in the social care and special education needs budgets so that we all support the most vulnerable in our communities; investing to deliver on the corporate plan promises, for example, another household waste recycling site and neighbourhood hubs. 

     

    The Leader of this Council, and Leader of the WLGA, with peers in all other Welsh Councils, worked very hard since the announcement of the Welsh Government draft budget to secure a better deal for Local Government and the essential local and preventative services it provides.  The Welsh Government listened and they have recently announced a package of new funding streams (£141M extra for this year) for Local Government, some for this current year but also more for the 2019/20 budget.  For 2019/20, this will come through as both additional revenue support grant and specific grants for education and social care services.  More will be known about Newport’s share of this in the final settlement, due on the 19th of this month. 

     

    The formal budget consultation will run until the end of January and the Leader encouraged residents and groups to engage with the process in order to provide feedback on the proposals.

            

    The Leader thanked her Cabinet Member colleagues for their support through this process and having the ambition to do the best that can be done for the citizens of Newport.

     

    Cabinet colleagues thanked the Leader for her commitment to ensuring that Welsh Government have given an extra £141M of funding to local authorities.

     

    Councillor Jeavons drew attention to Page 63 of the report re: financial challenge, which confirms the number of services, provided by the Council and demonstrates Newport’s speed of growth.

     

    Cabinet recorded their thanks to all employees who continue to provide these services.

     

    Cabinet agreed a special budget edition of Newport Matters would be welcome and this will be discussed with officers.

     

    The Chief Executive also expressed his thanks to colleagues for their hard work during the budget process.

     

    Decision:

     

    Cabinet agreed the following draft proposals for public consultation:

     

    i)                 Budget savings proposals in Appendix 2 (summary table) and Appendix 5 (detailed business cases – subject to a few amendments as noted at the meeting)

     

    ii)                Proposed fees and charges in Appendix 7 (subject to the amendments raised during the meeting)

     

    iii)              The position regarding the proposed school funding for 2019/20 in paragraphs 5.1– 5.4

     

    Cabinet noted:

     

    i)                 The position on developing a balanced budget for 2019/20, acknowledging that the position will be subject to ongoing review and updates

     

    ii)                The medium term financial projections, assumptions contained within and that projections contain investments required to implement the Corporate Plan promises

     

    iii)              That the Cabinet Member and Head of Service decisions in Appendix 3 will be implemented with immediate effect, after following the usual Council decision making processes

     

    iv)              That Fairness and Equality Impact Assessments have been completed for all proposals requiring one 

     

    Supporting documents: