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Agenda item

Revenue Draft Budget and Medium Term Financial Plan (MTFP): Final Proposals 2022/23

Minutes:

The Leader presented the report to Cabinet Member colleagues.  The report highlighted the key issues affecting the development of the Council’s 2022/23 budget and Medium-Term Financial Plan.   Cabinet were therefore asked to agree the proposals to enable the commencement of the 2022/23 budget consultation process. 

 

It was noted by the Leader that there were no new budget savings for consultation and no requirement for new or additional savings for us to balance the overall budget for next year.  This was an exceptional position that in which the Council found itself in comparison to previous years, this was thanks to the favourable draft settlement received from Welsh Government at the end of last year.

 

There was currently a balance in hand for the 2022/23 financial year, this is unavoidable due to the late settlement.  There remained, however, further work to identify appropriate investment as set out within its key priorities.

 

Overall, the draft budget included investment of almost £26m in 2022/23 and £47m over the medium term. This included pay and pricing inflation, however the Leader took the opportunity to specifically mention the areas of investment that herself and Cabinet colleagues believed were the areas in need as well as areas which saw further investment following the better-than-expected settlement:

This budget proposed investment in schools of up to £8m in 22/23, which represented a 7.3% growth in schools’ budget, and up to £17.5m over the next three years.  The 22/23 investment represented an additional £2m over and above pay and pricing inflationary increases with the costs associated with new and growing schools.  This would increase the per pupil funding amount and all schools would experience the benefit of this.  The Leader gave her personal thanks and that of Cabinet, for the professionalism and commitment shown by schools-based staff over the last two years.  Staff worked tirelessly since the start of the pandemic to adapt to changes in teaching and learning and should be commended for their efforts.

 

The Leader mentioned further investment proposals for early intervention and prevention to alleviate the pressures that Councils continued to face within both education and social care settings.  This included investment to create additional capacity within the safeguarding hub to support families, providing additional resource and to support a proactive approach into assessing and supporting vulnerable pupils.

 

Consideration was also given to other targeted investments which might impact on support given to vulnerable families and individuals, as the Council continued to manage the impact of the pandemic. These would be announced in the final budget.

 

Consideration was also being given to investments which would impact on the city centre and the businesses within it. In particular, promotion of the city, marketing, inward investment, co-ordination of activities and events, tourism, and the general environment in and around the city centre.  These would also be announced in the final budget

 

The Council was currently planning to invest around £9.5m in the draft budget over and above an allowance for pay and pricing inflation and the details of these could be found within appendix 1 of the report.  Some of the key items included:

 

§  £3.2m for Real Living Wage for care workers and the increase in National insurance contributions

§  £1.4m for increasing demand in both children and adult services

§  Almost £900k additional funding for free school meals provision.

 

Over £700k provision to support Welsh Governments directive to ensure that there were no rough sleepers in Newport.  The Council had delivered a huge amount of support to rough sleepers and found accommodation to many individuals and families who found themselves in a difficult place.  This investment would enable the Council to provide continued support. 

 

Further detailed investments would be agreed at the final budget in the Cabinet’s February meeting feedback from consultation would be considered. Cabinet was interested to hear views on its three key priority areas of schools, early intervention and the city, as well as feedback on specific budget investments.  In addition, as well as the on-going investment in the revenue budget which the final budget would confirm, the Cabinet would also identify one-off investments in these and other key areas, funded from the current year’s underspend.   This would also include provision for covid risk in terms of the likely impact from the pandemic once the Welsh Government Hardship Fund came to an end in March 2022 as this would also require appropriate mitigation.

             

Finally, a 3.7% council tax increase was proposed for consultation. This was a weekly increase of £0.59 - £0.79 for properties in Band A to C, which were the most common bands in Newport.

 

The settlement received had allowed the Council to invest and increase funding in key services and more information would be announced in the final budget, but Council Tax was an important factor in that also.

 

Newport continued to have one of the lowest tax rates in Wales and across the UK as it continued to increase across most Councils.

 

Comments of Cabinet Members:

 

§  Councillor Davies supported the Leader’s comments regarding the hard work and professionalism of staff see in schools across Newport, in ensuring that children were kept safe.  The Cabinet Member was mindful that the hardship grant would end in March and was uncertain of the legacy that Covid would have on children, although they had suffered because of the impact.  Isolation and depravation meant that children were struggling and this would not change due to the high cost of living taking its toll.  Schools were the hub of the community, making sure that children were being supported through learning and being clothed and fed at home.  The need therefore for £8M in the budget for Education was welcomed.

 

§  Councillor Cockeram echoed the Cabinet Members comments regarding the impact on mental health in children during lock down.  The £9.5M investment in safeguarding hubs which were improving with partnerships in place. The Cabinet Member also invited the Leader to visit the hub to see how the hub operated at some point in the future, when it was safe to do so.  The Leader would be delighted to join the Cabinet Member in visiting the site as it was critical to support the residents of Newport.

 

§  Councillor Hughes passed on his sympathy to family of Councillor Peter Clark from Monmouthshire on behalf of Newport City Council and Cabinet. The Cabinet Member and also a social worker welcomed the commitment to a living wage during these challenging times.  It showed that the Council was listening and contributing to key services as well as supporting the residents of Newport.

 

§  Councillor Jeavons referred to the months of schooling missed by children came at a price to parents and carers too and welcomed the proposals outlined in the budget to support this.

 

§  Councillor Harvey considered that full Council would see that this was a good budget and thanked school staff and pupils who had been affected during this very difficult time and therefore supported the budget moving forward.

 

The Leader added that there were still decisions to be made but that these would be made with the feedback from members of the public.  There were no proposed increases in licenses for Taxi drivers, catering business or for groups that used sporting facilities.  This budget was based on the support for all our families in Newport.

 

Decision:

 

1.         Cabinet agreed the following draft proposals for public consultation:

i)                  A council tax increase of 3.7%, a weekly increase of £0.59 - £0.79 for properties in Band A to C, the most common bands in Newport, as set out in paragraphs 3.21.

 

ii)                 Proposed fees and charges in appendix 4.

 

iii)                The budget investments shown in appendix 1.

 

iv)               The budget investment provision in schools of up to £8,003k, noting this would fully fund the planning assumption on teacher’s pay at 4% from September 2022 plus the cost of new/expanding school provision as noted in paragraph 3.11 – 3.18.  Specifically on the teacher’s pay, given the uncertainty surrounding teachers’ pay from September 2022 provision of up to 4% was proposed and would be held centrally until confirmation of the pay award was received.  Cabinet agreed to confirm and finalise this when there was certainty with the intention of retaining the objective described above in fully funding the September pay increase, within the funding provision available.

 

2.         Cabinet noted:

v)                 The position on developing a balanced budget for 2022/23 and considering the late announcement of the 2022/23 RSG funding, acknowledge that the position would be subject to ongoing review and updates between now and the February Cabinet when the final budget was agreed.

 

vi)               The medium-term financial projections, assumptions contained within and those projections contained investment required to finalise the implementation the Corporate Plan promises.

 

vii)              The need to prioritise the development of a ‘strategic change programme’ to develop a long-term sustainable financial footing for services.

 

Further work was required to specifically review and manage the financial impacts of some key risks in 2022/23, such as Covid related costs and income losses.

Supporting documents: