Agenda item

The Leader presented to Cabinet the Medium Term Financial Plan and 2021/22 revenue budget report. This was one of the Council’s most significant reports, which need to be carefully considered.

 

It represented the culmination of about six months of hard work, from agreeing the budget assumptions to form the basis of our planning.  After the detailed budget proposals were agreed, there was a further period of refinement and development following the announcement of the Welsh Government’s revenue support grant.  The Council had done this under difficult conditions, working remotely, with the significant uncertainty of developing budgets in the current challenging times.  On this latter point, the Council was notified of its Revenue Support Grant very late in December; about two months later than ‘normal’ and looking ahead, the prospect for public sector funding was uncertain given that the Comprehensive Spending Review planned for 2020 was replaced with a one year budget.  We awaited further information from the UK Chancellor as to how he would deal with the UK growing debt and the impact of that on public sector funding.  Including the current route out of national lockdowns and how the UK, and indeed the rest of the world, would recover from the Covid pandemic; that remained unknown, as it was a fragile situation.

 

Notwithstanding all of this, however, a budget was produced and the Leader thaned her Cabinet colleagues and officers of the Council who worked hard to get us to this point; it had been a tremendous effort by all.

 

The Leader reminded those present that, as the ‘Administration’, decisions would be taken on where to spend the Council’s resources and a key part of that was the Council Tax level required to fund that alongside the Revenue Support Grant.  Council Tax only made up about 24% of the Council’s revenue budget funding but was still an essential part of that.  Full Council made the decision on the Council Tax and they would review and consider the recommendations made by Cabinet.

 

Our funding

The Councils Revenue Support Grant increased significantly, by nearly £13m, due, in large part, to a correction in the population estimates that drove a large part of the distribution of that grant to Councils. We consulted on a 5% Council Tax increase which added a further £3.2m to potential funding for next year’s budget. In total, funding in our draft budget increased by £15.9m. 

 

Budget savings

We had included £2.7m of new saving proposals for our draft budget.  However, most of which; £1.8m, did not impact on services and implementing them increased our flexibility to invest more into front line services to the public and the city. We consulted on proposals that we considered improved services and were part of a wider transformation of those services. The results of the public consultation would confirm this as they agreed strongly with those proposals with the exception of one and the proposed increase in council tax. This was a very positive result and showed we were doing the right things. The increased Council Tax was also not popular in the consultation and we appreciated that in the current climate, this needed to be reconsidered. The Leader went on to say that the public had spoken and we have listened.

 

The current position and how we will use our current ‘balance in hand’

As the report showed in Table one, we had £2.8m of available resources in hand at the draft budget stage still and further efficiency savings were added to that since

then; as shown in Table one of the report. The balance in hand for resources to be allocated now stood at £3.98m.

 

Set out below was a summary on how this final element would be allocated and used first.

 

	2021/22 £’000
Revised balance in hand	(£3,988k)
New investments:
SOCIAL CARE    Provision for the potential risk of higher on-going costs in our Social Care sector, following challenges coming out of both Covid and Brexit at £828k, partly funded by the increase in our ‘Social Care Workforce Grant’. Both had the real potential to create permanent cost pressures in this area and this would help in ensuring budgets are robust, help mitigate theses risk and crucially, ensure we continue to fund the best care we can for residents.   This would stabilise and help recruitment into our adult mental health social care teams which is an inherently difficult area in both retention and recruitment. A £40k provision for this would allow us to do this in what is a very challenging and increasingly important area of work.    We need to invest in our looked after children care budgets and child protection budgets due to growing demand and this would cost £116k    These are additional investments in our social care budgets and demonstrates the Administration’s on-going commitment to this area as it deals with continuing demand and challenges. Looking after the most vulnerable members of our communities is a priority.	£828k (£500k)           £40k       £116K
OTHER PRIORIOTIES   We would invest £911k in a number of priority needs and priorities. These include:   -          capacity in our project management and business improvement team tosupport services with projects that would deliver organisational and service changes? -          capacity in our functions which would take forward the city’s aspiration on sustainable development, highways  and de-carbonisation initiatives. This would allow the council to deliver on key projects including any emerging projects and initiatives coming from the Burn’s review -          developing our workforce planning and capacity. This would include developing and implementing a policy for further traineeships, apprenticeships and similar training roles in our workforce and ensure our residents have the opportunities to develop skills, knowledge, experience and careers with the Council -          provision to develop and implement a plan and initiatives to further increase pride in our city, find ways to support local communities within it and connect our communities and wider city.	£911k
ECONOMIC & CITY CENTRE REGENERATION AND SUPPORT   The situation in our city centre, like most others, are still challenging and would remain ‘fragile’ for some time to come. We would make a £1.9m provision in our budget to enable us to continue with key regeneration projects such as the refurbishment of the central market and other major projects. This provision shows our commitment to the city centre and the positive outlook, example and leadership the City Council needs to make    This is part of a wider package of investment in support of the city’s future economic development and city centre regeneration, both in our capital programme and what we’ve already announced in our draft budget in January.	£1,820k
REMOVAL OF SAVINGS PROPOSAL STR2122/02 - Charges for non-household waste   The Cabinet have considered all the advice and feedback from the public consultation and would not be introducing charges for non-household waste taken to household waste recycling centre (HWRC).	£20K
COUNCIL TAX   Cabinet consulted on a 5% increase in Council Tax. Newport still has one of the lowest rates in Wales, and indeed the UK. It means a reduction of £9m in funding compared to the average rate in Wales, and that has a number of negative impacts on the services we can deliver. However, Cabinet made clear their intention to listen to residents. They appreciated the tough times that the people of Newport were going through and the uncertainty that still exists.  Cabinet, therefore, agreed to reduce the proposed Council tax increase to 3.7% and this would cost £753k.	£753k
Total remaining to allocate	£0

 

How have we invested our increased resources?

There were three biggest areas of focus, which were:

 

For our schools, the budget allowed for nearly £5m of increased funding. This covered the assessed cost increases in our schools and we intended to fully fund that, up to the provision we have here. As that included an estimate for any pay increases, this element would be retained and considered when we had the final agreed position.  The Cabinet intention was to at least meet the full amount of cost increases, up to the budget increases included here. Schools with accumulated budget deficits or with current in-year overspending budgets, would still need to resolve these issues with recovery plans and officers were working hard with schools on this and good progress was being made. Our history on schools funding continued to prove we prioritised schools. Excluding any increases in Welsh Government specific grants for schools, which had also grown over the last few years, we have increased schools core funding by some £15m over the last three years, an annual increase of around 5% average.   Part of this was for our expanding and new schools as the city grew but also to ensure cost increases were funded.

 

Social Care services demand had continued to grow and we were providing nearly £2.5m of additional funding, over and above pay and pricing increases. In 2021/22, we would be investing nearly £2.5m into children’s and adult services.   This included provision to meet potential increased cost in our care homes and domiciliary services resulting from Covid and Brexit risks.

 

We are also ‘committed to build back better’ as we led the way in helping the city recover from the last 12 months of impacts from the pandemic. A number of the proposals helped achieve this. Firstly, Cabinet were proposing to invest just over £2m into the financing of the capital programme. The Council’s capital programme was dealt with in another report on this meeting’s agenda but showed, amongst other projects, we were investing in our schools, the city centre, key cultural infrastructure such as the transporter bridge, and of course, a very exciting new leisure facility which would also pave the way for a new learning campus in the city centre. Secondly, we made £1.8m provision to fund initiatives and regeneration projects in the city centre. Thirdly, as I’ve announced, we proposed to increase our current efforts to increase the numbers of apprenticeships and traineeships and other schemes in the Council. This would provide valuable opportunities for residents to gain work and training and help the Council grow and develop its workforce.

 

The detailed policy was nearing completion and the Leader would announce this as soon as she could.  Fourthly, Cabinet were going to invest in more resources for those areas that planned and delivered on sustainable development projects, which would also include the emerging Burns review on traffic.  The ‘green agenda and de-carbonisation’ was prioritised and the resources would begin to create the capacity needed to co-ordinate and deliver appropriate projects across the Council, which contributed to this.  Lastly, Cabinet were investing resources into the marketing of the City and capacity to deliver more events and local initiatives, which would enable the City to raise its profile for all to engage with.

 

A key part of this last area was the use of one-off resources.  Funding our capital financing budget requirement to the end of the current capital programme period all in 2021/22 was important and needed. It would also, over the next 2-3 years, generate some one-off funding; predicted at about £3m. Alongside the Council’s forecasted underspending on this year’s budget, it should generate a substantial one-off funding ‘pot’ which would be used to support this revenue budget and its priorities. This would also be used to invest in special projects to help with the sustainable development objectives highlighted and also would also improve the environment.  This included clearing up eyesores, which current budgets could not fund, and improving green spaces as these were more important than ever.  Officers were developing plans on these and more details would be announced when work was completed, and with more certainty on the level of one-off resources in the spring.  Between the core funding being provided to create capacity and the capital programme and one-off funding, the Leader was confident that a real impact would be made to help instil more pride in our city and make it a better place to be.

 

The budget dealt with the current position on where day-to-day services and investment was required and it looked forward, starting to plan for the priorities for the environment.  This not only included the wider agenda around climate and de-carbonisation but also the ‘closer to home’ city environment, neighbourhoods, parks and other spaces. And of course, undertaken with a lower Council Tax which was important at this time.  

 

Comments from Cabinet Members:

 

Councillor Jeavons advised that the Waste Team was very effective and dealt with fly tipping as one of its roles, this area would benefit from investment and would help in its statutory duties some of which included:

 

·         Fly tipping removal from PUBLIC LAND/ADOPTED HIGHWAY (removal of fly tipped waste on private land is not the responsibility of Newport City Council but the responsibility of the landowner.)

·         Fly tipping investigations and enforcement action which include FPNs, prosecutions

·         Illegal waste carrying and disposal including duty of care checks

·         Monitoring of household waste collections and engagement with residents

 

In addition to this:

·         Partnership work WG/National Resource’s Wales  and KWT - benchmarking - sharing of best practices

·         Delivery of specific operations/action days with Gwent Police/SW Fire and Rescue to tackle fly tipping and ASB

·         Support to volunteer litter picking groups

·         We welcome litter picking activities – which are positive for communities and the environment

·         Volunteer groups ARE being supported by NCC however:

§  We would ask Volunteer groups  to comply with rules set out in pre booking/collection agreements available on the Newport City Council website making the process seamless from end to end

·         Some groups are currently disregarding rules, which:

§  Puts them at risk for many reasons which I don’t need to go into including their own health and safety

§  This also Creates issues for the Council and other organisations dealing with litter/fly tipping/ASB/possible prosecution and collection

 

Some of these included:

·         Not Adhering to social distancing as per government guidelines during this lockdown period

·         Following H&S procedures

·         Litter picking on private land

·         Waste to be sorted into recyclables

·         Bags only, with a limit – no bulky waste

·         No sharps

·         Safe collection points, these are laid out on Newport City Council s web site and include no bags to be collected on roads over 50mph

 

Littering/fly tipping is a big issue for us all and I urge people to dispose of their waste responsibly.

 

Councillor Truman noted that this was a listening budget considering the reduction the council tax for the public.  Investment was also needed for the city centre. The budget was good news for schools and social services as well as addressing empty properties for the first time, which was outstanding.

 

Councillor Harvey echoed comments of Councillor Truman regarding the council tax, adding that it was a massive drop, although there had been negative responses from residents regarding the consultation.  Councillor Harvey also commended teachers, support staff, back office staff and everyone that helped keep the schools running virtually; providing IT support for pupils, all of whom had not stopped working and wanted to make mention of this considering the public sector pay freeze. Councillor Harvey added that Newport residents should really look at the budget, which was very thorough and thanked the leader for a good budget under the circumstances.

 

Councillor Davies considered all the wellbeing objectives achieved in this report and money which was carefully allocated to address the needs.  Vulnerable residents had been given consideration and support in relation to Covid.  The was a collective duty by 2050 to be carbon neutral and we had duty as a city to deliver this, Councillor Davies also welcomed the plan to develop the climate emergency.  The empty homes fund would help to develop beautiful homes and extend boundaries and give pride to residents in where we lived.

 

Councillor Rahman echoed comments from his colleagues about listening to residents.  There had been a lower public consultation response than usual. However, reducing the council tax increase and withdrawing the proposed fees and charges for non-household waste meant that the council had listened. Councillor Rahman considered the challenges faced by council; loss of income and additional cost due to pandemic. The city had also changed since the last Census, and Councillor Rahman everyone get involved in the census.  There was also still help available for those struggling in the community.  This was therefore a budget that we could be proud of and on that would invest in communities and city infrastructure.

 

Councillor Mayer thanked the Leader on her excellent presentation and echoed Cllr Truman’s comments.  Cabinet and finance officers would be focussing on next year’s budget, as they did every year; always looking forward to invest in Newport.  Residents that took part in the leisure complex debate showed that they had trusted the council.  Councillor Mayer also met with trade union representatives as in previous years and this year; there were few comments because employees knew that the council were doing their best to deliver the best possible budget.

 

Councillor Cockeram referred to Councillor Harvey’s comments, there were some negative comments however, he considered that the council had to dig deep and as a result, the budget produced was excellent.  On the whole, as there were not as many comments from residents, the silence meant that they must be pleased with what had been achieved.

 

The Leader thanked Deputy Leader for his guidance adding that Cabinet owed a debt of gratitude to the Heads of Services having to deal with a pandemic and a sustainable budget and thanked them for the work they had put into the report.

 

The Leader also thanked the finance team for the time they had taken going through the finest points of this budget to help shape the aspirations for the people of Newport.  The Leader thanked the Chief Executive for her leadership in relation to the green agenda and responsible recovery for citizens of Newport.

 

Resolved:

Cabinet noted/agreed the following:

 

Budget proposals and medium term projections

 

1.     Noted formal consultation on the budget as outlined in section 4 and the feedback received, shown in appendices 1 to 4b.

2.     Noted equalities impact assessment summary on the budget proposals, shown in appendix 9.

3.     Reviewed and confirmed budget proposals (appendix 5 - 6), as currently summarised within the medium term financial plan (appendix 7) and allocate the financial flexibility shown in table 5. In doing so, agreed theimplementation of the full medium term savings programme and the use of invest to save as noted in paragraph 6.4 to implement savings as part of the medium term savings requirement.

4.     Agreed the 2021/22 fees and charges of the council shown in appendix 11.

5.     Noted the budget investment in schools of up to £4,937k, was based on an assumed teachers/ NJC pay increase and provided for a fully funded increase in funding requirement in addition to the cost of new/ expanding school provision as noted in paragraph 3.7 – 3.12.  Specifically, Cabinet agreed to confirm and finalise this when there was certainty on Teacher’s pay from September 2021 with the intention of at least retaining the objective described above, within the funding provision available.

 

 

Overall revenue budget and resulting council tax 21/22

 

6.      Noted the Head of Finance’s recommendations that minimum General Fund balances be maintained at a level of at least £6.5million, the confirmation of the robustness of the overall budget underlying the proposals, and the adequacy of the general reserves in the context of other earmarked reserves and a revenue budget contingency of £1.5million.

7.      Noted the current level of council tax for Newport City Council and the monetary value of various percentage increase and how this compared to levels of council tax at other councils as shown in table 6.

8.      Recommended an overall net budget and resulting council tax to full Council, noting that a formal resolution including the Police and Crime Commissioner for Gwent and Community Councils’ precepts would be presented to Council on the 3 March.

9.      Approved expenditure and use of reserves in line with summary shown in appendix 10b, noting they were based on detailed proposals reviewed by Cabinet in their January 2021 meeting.