Agenda item

The Leader presented the report, informing Cabinet on the final Medium-Term Financial Plan and 2022/23 revenue budget report. This was one of the council’s most significant reports and needed to be considered carefully.

 

This report represented the culmination of six months hard work, from reviewing and agreeing budget assumptions to form the basis of our planning, to this final stage of allocation of funding to our key priorities. 

 

There were challenges to the budget process this year.  Not only was the Council going into the third year of working through the pandemic and all its associated issues, but the draft Welsh Government settlement, which funds 76% of the budget, was received very late on 21 December. This meant final and detailed budget work could not be finished within the customary timescale.

 

The settlement this year, however, included a multi-year funding settlement which brought a reasonable level of certainty. The inclusion of indicative values for the next two years supported our capacity for long term planning.

 

The settlement received from Welsh Government was much higher than that included within the planning assumptions, removing the need to identify any new budget savings.

 

A ‘balance in hand’ was reported to January Cabinet and this report summarised the investments that would support key priorities. The report also provided detailed feedback from the consultation process.

The Cabinet considered the results of the consultation, along with other key contextual matters and would set out our investment areas in the 2022/23 budget.

 

Council Tax only made up 24% of the Council’s revenue budget funding, but it was still an essential element of the Council’s overall funding.

 

Full Council made the final decision on the Council Tax level only. 

 

The Council’s Revenue Support Grant increased significantly, by nearly £25m, however, this was predicated on the Council covering several cost pressures and investments determined by external influences including, but not limited to:

·        additional costs of introducing the Real Living Wage for care workers from 1 April 2022

·        the costs associated with the teachers’ pay deal

·        increased National Insurance contribution for employers from April 2022

·        the management of the continued residual impacts of increased costs and reduced income from the Covid pandemic, in recognition of no continuation of the hardship fund beyond this financial year.

 

The Council consulted on a 3.7% Council Tax increase which added a further £2.7m to potential funding for next year’s budget. In total, funding in our draft budget increased by £27.5m. 

 

·        Some initial budget investments in draft budgets highlighted key priorities of:
prevention and early intervention

·        our city centre

·        our schools

 

The draft budget set out:

·        £3.2m in support of our care workers, ensuring they are paid the ‘Living Wage’

·        nearly £1m for supporting our most vulnerable adults with learning difficulties

·        nearly £900k to facilitate the increased take up of free school meals

·        nearly £400k for prevention and early intervention services within our Education and Social Care departments, building on a very significant increase in school funding, as well as specific funding to help those in our schools who require additional support 

 

Table one of the report showed £3.3m of available resources in hand at the draft budget stage, and further changes to investment profiles have resulted in the ‘balance in hand’ for resources to allocate increasing to nearly £3.9m.

 

	2022/23 £’000
Revised balance in hand	(£3,892k)
New investments:
SOCIAL CARE   Sustaining our vital care providers in social care is an area of considerable challenge.  In addition to ensuring that social care workers are paid the Real Living Wage. Therefore, an additional provision of £1.1m for the potential risk of higher on-going costs in our Social Care sector, following challenges coming out of both Covid and Brexit.  The creation of a permanent increased budget in this area would help in ensuring budgets are robust, help mitigate these risks and crucially, ensure we continue to fund the best care we can for our most vulnerable residents.   Demand in our social services and care was a real challenge emerging from the challenges of the last two years.  Further investment within social care would create additional capacity within teams to support our vulnerable residents - this £191k investment supports an additional 6 posts.  One of these posts would manage the community connector service, which was a key intervention and prevention service, sign posting individuals to services available within the community that meets their needs.   Additional investments in social care budgets demonstrated on-going commitment to this area as it dealt with continuing demand and challenges. Looking after the most vulnerable members of our communities was a priority, in particular with early interventions where needed and prevention in the first place wherever possible.	£1,110k                   £191k
CITY CENTRE   Cabinet wanted to invest further to create a positive impact both on the city centre and the businesses within it.  In particular, the promotion of the city, marketing, inward investment, coordination of activities and events, tourism, and the general environment in and around the city.   Therefore, an investment £377k in a number of key priority areas, included:   -         An additional £198k investment in cleansing for enhanced city centre cleaning -         £38k to create capacity to develop and implement a cultural strategy therefore strengthening Newport’s cultural offer -         £49k investment in a city centre manager role to enable better liaison of all of the Councils and partners work in the city centre, including with businesses -         £92k investment in destination management and ensure we are ‘marketing ‘ the city robustly and maximising its potential to businesses, visitors and residents   In addition to these, Cabinet would not be increasing the Councils fees and charges for city centre car parking and licensing venues for outdoor seating.	£377k
OTHER   The issues that made a difference over the last two years and issues which really mattered to our residents were:   -         Investment of £255k for the maintenance of our parks play areas and equipment. In conjunction with a significant one-off investment to get our stock of play areas back up to speed, this budget will provide capacity for on-going maintenance and replacement thereafter   -         We have made significant improvements in housing rough sleepers over the last two years and in dealing with general homelessness demands, helped by the WG Hardship Fund. Some specific funding will continue from WG and we will invest £34k to augment that which will enable us to continue with our current provision and support to vulnerable residents here   -         There is an urgent need for this Council to play its part and reduce its carbon footprint. We are already doing a lot and we propose to invest £153k and increase capacity to develop and implement future schemes to achieve our net zero ambition.   -         Our recycling record is already very good and can improve even further. We will invest £55k to provide capacity to support and encourage greater engagement from residents in flats and houses with multiple occupation to deal with waste issues and promote recycling                                                            In addition to increasing staff resources to add capacity in key areas already outlined, we will provide capacity in a small number of further areas at £466k to improve the monitoring of our capital programme, in our highways planning function, waste and refuse services, electoral registration service and environmental health.   In line with section 6 of the report here, we will also invest £500k to help manage the financial risks around the on- impact of Covid and no Hardship Fund from 2022/23. The fund has been essential and no doubts, impacts on the Council finances will continue in some form or shape. Alongside the other temporary measures, this will provide mitigation against this and in doing so, enable us to focus our one-off resources on priorities and new investments	£1,463k
COUNCIL TAX   Lastly, Council Tax. We consulted on a 3.7% increase in Council Tax. With this increase we would still have had one of the lowest rates in Wales, and indeed the UK. However, I have made clear my intention to listen to our residents and be mindful of the continued pressures on household finances. Therefore, Cabinet would reduce the proposed increase in council tax to 2.4% and this will cost £828k.    The investments outlined above totalling £3.969m will be offset by recently confirmed lower than anticipated inflationary increases on council levies of £77k and therefore balances the budget	£828k                 (£77k)
Total remaining to allocate	-

 

The Leader explained aspects of the budget:

 

To date, for businesses:

·        support with Covid related business grants,

·        administered rate relief, now in its second year, with a more limited scheme for 2022/23 in train also.

·        increased our business grants scheme here locally with a £250k one off investment from the 2020/21 underspend.

 

For communities:

·        supported them not only through our day-to-day services but also through specific one-off investments from the 2020/21 underspend for a number of initiatives, such as:

·        £500K for the Creation of a community Covid recovery fund

·        City Services, £500k for the refurbishment and cleansing of open spaces                                   

·        £170k for ‘Cariad’ Casnewydd                                                                                                            

·        £180K for community gardening schemes                                                                          

·        provision of permanent investment in the current year’s budget at over £150k to develop and implement plans and initiatives to further increase pride in our city, and to find ways to support and foster connections with and between the local communities within it.

 

This budget presented here today would build on these, as an example, Cabinet were focussing on green spaces, providing greater levels of investment in these important resources. The Covid-19 pandemic had a significant impact on people’s lives.  Being outdoors and spending time in green space has been shown to be highly beneficial to both mental and physical wellbeing.  It was the Cabinet’s intention that further investment in parks and outdoor spaces would encourage residents and families to use these spaces to connect further both with the natural environment and with their local communities.

 

In addition to the permanent revenue funding of £300k over two years to maintain our play areas and equipment, we intend to make a £2.5m one off investment in parks and open spaces. This would be funded through the revenue underspend at the end of the year.

 

Cabinet intended to develop and continue our support for our city centre, investing almost half a million pounds in our city centre over the next two years to promote the city, encourage tourism and improve the general environment in and around the city. An initiative on further support to city centre businesses would be provided in the March Council.

 

In addition, Investment in schools at over £8m, social care at over £6.5m, with a focus on prevention and early intervention services. As well as investment in housing and homelessness services and providing capacity to move towards our ambition of net zero carbon. 

 

These were the right priorities as we look beyond the challenges of the last two years. These priorities would guide our work, to deal with the new challenges, but also the new opportunities of the future.

 

Comments of Cabinet Members:

 

§  Councillor R Jeavons, advised that recycling was close to 70% thanks to Newport residents.  The additional £55K would help break through the 70% barrier and help with future recycling targets.  The Council have listened to its residents and would have taken into consideration future energy costs as well as Newport City Council still having one of the lowest council tax.

 

§  Councillor Truman referred to the increased cost of living, the budget was an investment in people including the vulnerable.  The budget also supported businesses and was a forward-thinking budget.  Since the pandemic, two years ago, this was widely consulted this year and people had shown interest by engaging in the consultation.

 

§  Councillor Davies supported colleagues’ comments and added that these were difficult times, with the rise in the cost of living and fuel crisis.  The commendable additional investment to raise the standard of living was right for the residents’ needs.  As the Cabinet Member for Education and Skills it was right to invest £8.8M into education services and recognise the vulnerability of the children of Newport as a result of the pandemic.  Schools were central to local community, providing food parcels and clothing.  The funding would also support Additional Learning Needs (ALN) as well as the provision of school meals, which saw an uptake of 118% in recent years.

 

§  Councillor Mayer thanked the Leader for her presentation and the hard work put into this.  This years budget had started as soon as the previous budget was agreed.  The Council had consulted widely with trade union representatives as well as Newport residents.

 

§  Councillor Hughes was proud to be part of a Cabinet that focussed on the people it served and enhancing the city.  The budget favoured all members of the city and supported the most vulnerable.

 

§  Councillor Harvey was also proud of budget and pleased that investment on parks and spaces had been incorporated.

 

§  Councillor Cockeram echoed comments and congratulated Leader on the presentation of the budget.

 

Decision:

That Cabinet agreed to the following:

 

Budget proposals and medium-term plan (section 3-5)

§  To note the formal consultation on the budget as outlined in section 4 and the feedback received, shown in appendices 1 to 4.

 

§  To note the Fairness and Equalities Impact Assessment (FEIA) on the budget proposals, shown in appendix 9.

 

§  To review and confirm budget proposals (appendix 5 - 6), as currently summarised within the medium term financial plan (appendix 7) and allocate the financial flexibility shown in table 4.

 

§  In doing so, to provide a minimum of £500k from the current financial flexibility for on-going Covid / no Hardship Fund risk and agree to temporarily re-classify the budgets outlined in para. 6.8 and the reserves for the same, noting that the risk would need on-going monitoring as the year progresses.   

 

§  To agree the 2022/23 fees and charges of the council shown in appendix 11.

 

§  To note the budget investment in schools of up to £8,003k is based on an assumed teachers/ NJC pay increase of 4% from September 2022 in addition to the cost of new/ expanding school provision as noted in paragraph 3.8 – 3.13.

 

§  Cabinet were asked to approve that the pay provision was retained in ‘contingency’ within the overall ISB and distributed to individual school budgets from there once the agreed pay award was known, with the intention of fully funding the agreed pay award up to the budget provision available.

 

Overall revenue budget and resulting council tax 22/23 (section 6 and 7)

§  To note 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 £1.4million.

 

§  To note the current level of council tax for Newport City Council and the monetary value of various percentage increases and how this compares to levels of council tax at other councils as shown in table 5.

 

§  To recommend 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 will be presented to Council on 1 March.

 

§  To recommend an overall net budget and resulting council tax increase of 2.4% to full Council, noting that a formal resolution including the Police and Crime Commissioner for Gwent and Community Councils’ precepts will be presented to Council on 1 March.

 

§  To approve expenditure and use of reserves in line with the summary shown in appendix 10b, noting they are based on detailed proposals reviewed by Cabinet in their January 2022 meeting.