Agenda item

The Leader presented the report, explaining the key details around the administration’s 2020/21 budget and highlighting the Council Tax increase underpinning that budget, at 6.95%.

The budget proposals were for the administration to decide; this was done at Cabinet in February.  Whilst the budget agreed required a 6.95% Council Tax increase to fund it, full Council would review this and agree the Council Tax rate. 

The background as to how on the budget and Council Tax position was that the draft budget in December was based on an a number of assumptions.  The key one being the Revenue Support Grant Settlement, and other things such as provision for pay and contract price increases and investment to support increasing demand for essential services.  A budget gap of almost £6m was anticipated in 2020/21 at that stage; however, these assumptions were updated once the draft settlement was received from Welsh Government on the 16 December.

At Cabinet in February, the better Revenue Support Grant gave around £7.3m more funding than assumed.  Savings of around £5.2m had already been identified in the December position and a further two proposals totalling £300k were identified.  Furthermore, further cost pressures were considered and approved in response to external influences, for example, an increase in the national minimum wage and an increase in the South Wales Fire Levy and the opportunity to remove the reliance on reserves in order to balance the budget.  A ‘balance in hand’ of £3.9m allowed the administration to consider and respond to the public consultation feedback and to make decisions in terms of how to utilise the additional money available for the greater good of the City.  Some of the investment decisions included investment in schools, youth services, bringing empty homes back in to use and making savings elsewhere in the council as outlined within the report, and reducing the draft proposed council tax increase down to 6.95%.

The final settlement was received two days ago, with no change to the Council’s Revenue Support Grant to that included in the provisional settlement and assumed in the budget papers.

The Council’s recommended net budget would increase from its current £281m to about £300m, an increase of nearly £19m.  The increase was funded from increased Revenue Support Grant of nearly £14m, proposed increased Council Tax income of just over £4m and an increase in the number of new homes paying Council Tax at nearly £1m. 

It was well known that Newport’s Council Tax is low compared to nearly all other Welsh Councils and indeed, across the UK. This had consequences on the Council’s finances, in terms of ranking in Wales on its budget position against the ‘standard spending assessment’ – it is 19th worst funded currently but had the second lowest level of Council Tax in Wales.

The Council made significant savings over many years to balance the Council’s budget as well as increasing Council Tax.

The report detailed the Council’s medium term financial projections and the future uncertainties that were faced such as future grant settlements from Welsh Government, Brexit and the outcome of the Comprehensive Spending Review.  As the date of the spring budget was confirmed for 11th March, it was hoped that this would provide more certainty on the medium term outlook for Welsh Government funding.  For Local Government, much would depend on the decision taken by Welsh Government, in particular on NHS funding in Wales. 

The usual Council Tax resolution, included The Police and Crime Commissioner for Gwent and Community Councils’ precept requirements.

It was therefore proposed to recommend the Council Tax levels required to underpin the budget to protect the much needed services for the Council.

The report was seconded by Councillor Jeavons.

The following points were made in favour of the report:

         The difficulties faced by the council.

         The tough decisions taken as a result of austerity affecting the Council’s financial position.

         The rise in responses by the public for this year’s consultation process.

         The support for the youth services within Newport.

         Whilst there was an increase in Council tax by comparative figures, Newport was still the second lowest in Britain and third lowest in Wales.

         Newport residents facing financial difficulties in Newport were supported by the Council.

         The tax increase would directly support social services; including senior citizens and children services, schools and youth services.

         This was the best possible budget under the circumstances with the listening support of Cabinet, the Leader and Scrutiny. 

         The budget was designed to improve the life of many, such as foster care benefits. 

The following points were made against the report:

         The reduction of a cabinet member and the income generation from Newport Matters would make a cost neutral budget(?)

         That the precept for Police Crime Commissioner was not supported.

There were no votes against the proposals.

The conservative members, including the Chair abstained.

Resolved

1          To note that an extensive consultation exercise was completed on the savings over the medium term, including the 2020/21 budget proposals.  Cabinet had taken these into account in recommending final details of their budget.

2          To note the Head of Finance’s recommendations that minimum general reserve balances be maintained at £6.5million, the confirmation of the robustness of the overall budget underlying the proposals, subject to the key issues highlighted in section 7, and the adequacy of the general reserves in the context of other earmarked reserves and a general revenue budget contingency of c£1.5million.

3          To consider and approve a council tax increase for Newport City Council of 6.95%, a Band D tax of £1,197.88; and resulting overall revenue budget shown in appendix 1.

4          To approve the formal council tax resolution, included in appendix 3 which incorporated The Police and Crime Commissioner for Gwent and Community Council precepts