Agenda item

Revenue Budget and Medium Term Financial Plan (MTFP) Final Proposals


The Leader presented the report to Council.  Following recommendation by my Cabinet, the Council needed to review and make a decision on the level of council tax and the resulting total net revenue budget for 2021/22.


The Cabinet met on the 22nd February 2021 and finalised detailed budget recommendations. This report set out the recommended overall 2021/22 budget, resulting service cash limits, council tax increase and the council’s general reserve and contingencies. An increase in council tax of 3.7% (to £1,242.20 per annum at Band D) for Newport City Council was recommended.  A 3.7% increase on council tax was an increase of 66 pence per week, 76 pence per week and 85 pence per week for Band B, C and D properties respectively.


Turning to the budget first, the Leader stated that, although Council was not here to agree the detail of that, as Cabinet were responsible on where and what resources were spent, it was important to mention a few key points:


1. It represented the culmination of about six months hard work, from agreeing the budget assumptions to form the basis of our planning to finalising detailed proposals last week, after a period of consultation on our draft budget which we announced in early January. We’ve done this under difficult conditions, working remotely and with the significant uncertainty of developing budgets in the current challenging times. Many elected members had taken a part in this, from Cabinet members, to those who sat on Scrutiny committees, fairness Commission and many school governors. The Leader thanked everyone who had played a part in this and Council officers who have worked tirelessly on this whilst also dealing with supporting the city and residents through the last 12 months.


2. The Council’s funding was increasing significantly next year and this provided some choices and the opportunity to invest in key services, including prepare the Council and the City for the challenges of ‘recovering’ from the last 12 months. Whilst the Revenue Support Grant accounts for about 76% of our overall funding, Council tax was still an important element. Funding, with a 3.7% Council Tax would increase by just over £15m.


3. The Cabinet were still making savings because the proposed investments were more than  the available budget and therefore savings were needed. The draft budget proposals on savings showed we were on the ‘right track’. Most of the savings would have little to no impact on services and were delegated to Heads of Service to implement.  Of those we consulted on, only two proposals received negative feedback from residents. The Leader said that she would listen and she had by deleting the one saving that was not liked (charging at HWRC) and by reducing the Council Tax increase substantially from that consulted on.


4. The budget investment prioritises ‘people’ in our city and invests in ‘place’.


-         £4.9m would fund the cost increases in our schools, including new and expanding schools. We have kept back the pay increase element and would distribute when we knew what that was, up to the level we made provision for. Our intention was to at least pay for the cost increases in our overall schools budget.


-         £2.5m in our social care services on a number of areas – emergency placements for vulnerable children, helping our adults with learning difficulties live independent lives and provision for increased costs from our care providers due to Covid / Brexit issues and ensure they were there to provide the best care as possible.


-         £4m in our city services and regeneration, investment and housing services. This covered a range of issues but would provide capacity to deal with empty homes, economic development and projects to further regenerate and support the city centre. These were crucial now as we looked beyond the challenges of the last 12 months.


-         £2.1m for the funding of the Councils capital programme. This was providing capacity to implement a very significant capital programme to benefit our schools, key cultural infrastructure, a new leisure centre in the city would also unlock college campus and city centre regeneration projects. 


-         nearly £1m for providing capacity to co-ordinate and implement capacity in our functions would take forward the city’s aspiration on sustainable development, highways and de-carbonisation initiatives, developing our workforce planning and capacity, provision to develop and implement a plan and initiatives to further increased pride in our city, finding ways to support local communities within it and connect our communities and wider city.  


The leader stated that it was a responsible budget and focussed on recovery as well as key services which supported the vulnerable residents and young.


In terms of Council Tax, that was the decision for council here today. As the Leader announced last week,  cabinet had recommended a reduced 3.7% increase.  The Leader made the following points here:


-         it was significantly reduced on the 5% consulted on and also below the base assumption on the Councils medium term financial plan

-         Newport’s Tax level was one of the lowest in Wales and UK for comparable Councils (Unitary/County’s) and the increase here maintained that. The rate was not ‘out of kilter’ to other increases across Wales. It was going to be substantially below increases in England here rates above 5% were not uncommon

-         Our relative low level of Council Tax was not without its challenges, especially as a growing city with relative high deprivation levels. We could not allow this to slip back even further as that was not sustainable nor responsible. The level here provided for a ‘balanced’ position.


This is a good budget which focussed on a responsible recovery as we looked forward and put the Council at the heart in supporting our city as we moved ahead from the challenges of the last 12 months.


Cllr Jeavons seconded the report.


Comments from Councillors:


Councillor Jeavons thanked everyone for their hard work and contribution toward the budget. Along with the removal of car parking charges for certain sites within the city which were removed by the cabinet earlier in the budget cycle, removal of savings proposal STR2122/02 - Charges for non-household waste accounting to £20K was welcomed.


The saving of non-domestic waste for users of the HWRC site (which received over 60,000 visits since the booking system was introduced) was showing again that we had listened to the budget responses.


This along with the increase in waste enforcement within this budget, would help in the illegal action of fly-tipping.


Councillor Jeavons urged all litter picking groups to adhere to safe working practices in conjunction with the councils booking policy, and asked that the public check when having items removed from their property, that the people removing the waste had the correct paperwork/licenses in place.


Councillor Jeavons was very pleased to see an increase in the winter maintenance budget helping to keep amongst others, safety levels on our highways to a premium. Each grit run costed a lot of money, and were very rarely seen by the public whilst indoors during the inclement weather.


Councillor M Evans referred the increase in cost of Band D council tax from 2009/10 to 2021 £1,242 which saw an increase of £500.  It was felt that previous savings suggestions put forward  had been and that council tax should not have been increased under the current financial climate.  He also mentioned that £6M was given towards the Welsh Budget with a settlement of 5.6%   Councillor M Evans did however welcome some of the proposals, such as parking charges and addressing fly tipping.  Due to Covid and the reduction in provision of services such as the closure of the Information Station, the budget was not therefore supported by his conservative colleagues.


Councillor Truman considered that this was a difficult budget which officers and members spent a long time producing.  The challenges had also been addressed coming out of Covid. Councillor Truman therefore supported the report.


Councillor Davies Council supported the report and advised that there was financial protection for residents to support them if they were not able to afford council tax. The Welsh Government also supported the council and residents.


Councillor Harvey highlighted savings within various service areas and added that officers had gone above and beyond to prepare the report, supporting schools and grant funding for businesses. Councillor Harvey supported the budget going forward.


Councillor Whitehead considered that there were a lot of good actions that came from the budget report.  He did however oppose the rise in council tax on behalf of residents and had considered moving an amended budget with a reduced council tax increase, but he had decided against this.


Councillor Rahman highlighted the investments, such as for small business, schools, green recovery within Newport when facing cuts in the previous years.  In addition to this, the proposed new Leisure Centre.  Councillor Rahman also understood that there were many families struggling and advised that support was available, from the Council and urged residents to get in touch.


Councillor Routley opposed the council tax increase and considered it would affect those struggling.  He also mentioned that there was no additional revenue for the Bridge Achievement centre.


Councillor C Townsend observed that there were good elements within the budget but felt it did not go far enough with street cleaning and fly tipping.  The planning process also needed strengthening through enforcement and the appeals process.


Councillor Cockeram considered that this was one of the best budgets in recent years in light of continuous cuts being made year on year, he also echoed comments regarding the regeneration of the city centre. 


Councillor C Evans mentioned that the budget was considered at Performance Scrutiny Committee and suggestions were put forward in relation to the tax increase.  He also mentioned that a neighbouring council’s budget had made quite severe cuts.  Councillor Evans advised that the Income Collection Manager had information for residents furloughed during lockdown regarding payment protection and advised that residents reach out to Newport City Council if they had financial difficulties to discuss how they could be given support.


Councillor Hourahine suggested that all colleagues take part in the consultation process and give an alternative budget if they would prefer a different outcome.


Councillor J Watkins agreed that there were good points in the budget, such as increased funding in social services and apprenticeships for younger people.  Voluntary groups would also benefit from the budget.  Councillor Watkins however opposed the council tax increase in light of Covid.


Councillor Morris requested a closure motion however the Leader asked the Mayor if she was able to conclude the discussion.


The Leader therefore concluded that it was a good budget with plenty of debate.  The budget prioritised people and invested in place and set out the foundation for a green recovery and with a lower council tax which was important at this time.


It was noted that Councillors Williams and Mogford were unable to rejoin the meeting to cast their vote at this time.



That Council -


Revenue budget and council tax 21/22 (section 2-8)


1.     Noted that an extensive consultation exercise has been completed on the 2021/22 budget proposals.  .


2.     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, 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 £1.5million.


3.     Approve a council tax increase for Newport City Council of 3.7%, a Band D tax of £1,242.20; and resulting overall revenue budget shown in appendix 1.


4.     Approved the formal council tax resolution, included in appendix 3 which incorporates The Police and Crime Commissioner for Gwent and Community Council precepts.


Medium term financial plan (section 5)


1.       Noted the MTFP and the financial uncertainty facing Local Government over the medium term.


2.       Noted Cabinets approval of the implementation of the four-year plan, including all budget investments and saving options, as summarised within the medium term financial plan (appendix 4).  In light of point 5 above it should be noted that financial projections are subject to on-going review and updating.


Noted and approved the councils reserves strategy and invest to save protocol.  Estimated reserve balances as at 31 March can be found within appendix 5a.

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