Agenda item

To submit the report of the Cabinet Member for Finance  (attached).

The Cabinet Member for Finance submitted:

 

·         A report recommending a budget for the Council's approval for 2019/20;

·         The draft decision on the Council Tax based on the Cabinet's recommendation to the Council (based on an increase of 5.8%), along with tables showing the Council Tax level and the increase per community.

 

Further to the content of the report, the Cabinet Member for Finance noted that the Welsh Government's announcement on funding the £1.6m increase in employment contributions to the teachers' pension scheme was expected today.  The Head of Finance Department explained that it was anticipated that the Council would receive a grant sum close to fully funding the requirement, as the English Government had pledged to schools there.  The exact sum for Wales had not yet been confirmed, but according to advice given, it would be between 80% and 100% of the total.

 

During the ensuing discussion, some members noted that they could not support the recommendation to increase the tax by 5.8%, due to the impact of this on the residents of a poor county such as Gwynedd.  Many other members stated that, although they were utterly dissatisfied with the situation, they believed that the Council had no choice but to accept the budget given the circumstances.

 

The following matters were raised by individual members:

 

·         Concern was expressed regarding the impact of the tax increase on the people who were on low wages, but were slightly above the threshold for claiming Council Tax Reduction, and it was proposed that a group of members from every political party in the Council should go down to Cardiff to support the Leader in his efforts to lobby the Government for additional funding.

·         In response to an enquiry regarding funding three presumptions in the report, the Cabinet Member for Finance explained that:

Ø  That he was confident that the deficit between the grant expected from the Government and the employer’s contribution towards teachers’ pensions was attainable, and if not, that further discussions would take place with the schools.

Ø  That the £2.7m additional tax from the second homes and empty homes premium had been earmarked in a fund towards the Housing Strategy, and that the budget was balanced without diversifying the premium product.

Ø  In terms of funding any inflation as a result of Brexit, that the Council was on firm ground as it was building flexibility into its budget, and should the requirement go beyond this, using some of the balances could be considered.

·         It was noted that placing pressure on the county's residents, who were facing daily challenges was not desirable, but that the Council was facing its own increasing challenges as well, as a result of the brutal Welsh Government and Westminster Government policies.

·         With the Governments letting people down with insufficient grant to meet inflation, let alone the increase in demand for local authority services, safeguarding those services, especially Education and Social Care, was more important than ever.

·         The importance of ensuring that support was available for individuals who applied for support was emphasised. In response, the Cabinet Member for Finance gave his assurance that Finance officers would be very willing to help anyone who was struggling to pay the tax.

·         Disappointment was expressed that so many of the services now relied upon the voluntary sector, and it was believed that the only solution to this was to merge Councils.  In response, the Cabinet Member for Finance assured that significant disappointment had been expressed in discussions with Government Ministers at the way the settlement had been announced.  He also referred to work that was ongoing across Wales to show the impact of cuts on the bottom line, and it was hoped that a degree of influence could be placed on the new Minister for Finance.

·         Reference was made to the increasing practice of converting summer homes into businesses to avoid paying council tax, and steps already being taken to lobby the Government to end this inequality were noted.

·         In response to an observation that this Council had loaned £91m of taxpayers' money to other councils, the Head of Finance Department explained that the sum quoted in the press was the total of a number of smaller loans over three years.  No more than £12m had been loaned to other councils at any one time, and no more than £3m with one individual Council. He explained that the Councils were paying higher rates of interest than the banks and that the funds deposited there were also safer than in the banks, and credit assessments had been carried out for them.

·         It was suggested that the Council should use its reserve funds to give the young people of the county loans to enable them to buy their own houses. In response, the Head of Finance Department noted that the proposed Housing Strategy would include various schemes to help young people.

·         It was suggested that the free parking scheme over the Christmas period at Council car parks should be adjusted slightly in order to prevent workers from parking there all day.  In response, the Head of Finance Department explained that the Cabinet had asked the Environment Department to look into the free parking arrangements, and show some flexibility and imagination.

·         It was suggested that as the Council had collected 97.3% of the Council Tax, and therefore, £4,189m had not been collected, and that Gwynedd was the fifth lowest in Wales for collecting the money.  In response, the Head of Finance Department explained that the 97.3% referred to the sum collected within that financial year only.  For any year, around 99.5% was collected eventually, after collecting sensitively and giving some of Gwynedd’s needy residents an extended period, but that it was the percentage within the year that was compared in the national statistics.

·         It was noted that, although some Councils had a higher tax increase than Gwynedd, their baseline on Band D was lower than this Council, and Gwynedd was the sixth most expensive in Wales for taxes on Band D.  In response, the Head of Finance Department noted that 60% of Gwynedd housing were in Band C and lower.  He explained that the tax level in Gwynedd was higher due to the way the historic grant funding was allocated at the time of the local government restructuring in 1996 and the tax increase voted on since then was lower than the Wales average.

·         It was asked that the Council representatives on the Fire Authority and the Police Authority to challenge the increase in the precepts and levies of these authorities.

·         It was noted that the average 6.5% increase in the Community Council's precepts was understandable, as they were undertaking additional responsibilities such as youth clubs, public toilets, grass cutting and picking up litter on roadsides. 

·         It was noted that it was important to emphasise that this budget was not the one the Council would have wished to impose on the residents of Gwynedd, and that the Council recognised the implications and the frustration it caused for the residents of Gwynedd. 

·         It was noted that the Council was subject to decisions that were made far away from Gwynedd, and as everyone grew tired of seeing rounds upon rounds of cuts and constraints, it was important to remind people that the Council's hands were tied, and that this financial austerity had been imposed from London to Cardiff, and from Cardiff to us here in Gwynedd. 

·         It was noted that, during the past nine years, the value of the grants to the 22 Councils in Wales had been reduced by over £1b, which was a reduction of over 20% in real terms. In the midst of all this, it was appreciated that the Council continued to safeguard important services and kept the tax increase as low as possible.

·         It was noted that the Welsh Local Government Association needed to be challenged, as it had been ineffective in its efforts to lobby the Government on this matter.

·         Reference was made to the saving schemes that were part of the public consultation, but that the Cabinet had resolved not to implement (Appendix 3 of the report). It was noted that this was extremely positive news, and that the 5.8% Council Tax increase would continue to fund some valuable services.

·         It was noted that the report submitted to the Audit and Governance Committee referred to the 5.5% tax increase, rather than 5.8%.  The Cabinet Member for Finance confirmed that this was the figure submitted to the Committee, but that a Governance and Audit Committee had been held prior to the Cabinet's recommendation of the exact tax.  He added that the change from 5.5% to 5.8% was in order to address the matters that had been part of the public consultation, but which the Cabinet had resolved not to implement.

·         It was noted that the Council was in an impossible situation. Although people within the county relied upon food banks, the Council was increasing the tax by approximately £70 per house. In response, the Cabinet Member for Finance noted that all members had a duty to write to their Parliamentary and Assembly Members to pressure them for a better settlement for the Council.

·         Disappointment was expressed that so many questions had been asked at the Council meeting, despite the fact that everyone had received an opportunity to raise these questions at the series of member workshops on the budget.

·         It was asked whether the Government intended to bleed the county councils dry in order to get rid of them, and the Leader was encouraged to raise this question to the Welsh Local Government Association, on behalf of the Councillors.

 

RESOLVED:

1.       To approve the recommendations of the Cabinet, namely:-

(a)     A budget of £248,013,890 should be established for 2019/20, funded by a £176,551,790 Government Grant and £71,462,100 Council Tax income, that has been increased by 5.8%.

(b)     £18,316,130 should be added to the capital programme for spending in 2019/20 in order to establish a capital programme with a value of £34,991,250 by 2019/20 to be funded from the sources noted in Appendix 4 of the report.

2.       That it be noted that the Cabinet Member for Finance, in a decision notice dated 19 November 2018, approved the calculation of the following amounts for 2019/20 in accordance with Regulations made under Section 33 (5) of the Local Government Finance Act 1992 (“The Act”):

 

(a)      51,926.38 being the amount calculated as Gwynedd's Tax Base in accordance with the Local Authorities (Calculation of Council Tax Base) (Wales) Regulations 1995 as amended, as its Council Tax base for the year.

 

(b)      Part of the Council’s Area - Community Tax Base -

 

Aberdaron	553.03		Llanddeiniolen	1,836.69
Aberdyfi	977.73		Llandderfel	497.72
Abergwyngregyn	118.92		Llanegryn	159.72
Abermaw (Barmouth)	1,154.94		Llanelltyd	288.42
Arthog	617.35		Llanengan	2,119.89
Bala	774.71		Llanfair	309.59
Bangor	3,885.63		Llanfihangel-y-pennant	216.38
Beddgelert	316.54		Llanfrothen	221.28
Betws Garmon	138.73		Llangelynnin	409.42
Bethesda	1,674.96		Llangywer	137.30
Bontnewydd	432.27		Llanllechid	340.89
Botwnnog	447.42		Llanllyfni	1,411.04
Brithdir and Llanfachreth	424.51		Llannor	901.93
Bryncrug	341.95		Llanrug	1,135.80
Buan	228.88		Llanuwchllyn	312.51
Caernarfon	3,543.60		Llanwnda	783.86
Clynnog Fawr	447.08		Llanycil	200.54
Corris	303.66		Llanystumdwy	866.24
Cricieth	944.01		Maentwrog	280.90
Dolbenmaen	606.10		Mawddwy	350.59
Dolgellau	1,228.41		Nefyn	1,474.65
Dyffryn Ardudwy	812.10		Pennal	220.86
Y Felinheli	1,157.21		Penrhyndeudraeth	772.99
Ffestiniog	1,745.06		Pentir	1,188.82
Y Ganllwyd	86.50		Pistyll	252.01
Harlech	791.40		Porthmadog	2,014.59
Llanaelhaearn	443.57		Pwllheli	1,753.45
Llanbedr	322.90		Talsarnau	321.85
Llanbedrog	713.19		Trawsfynydd	507.98
Llanberis	759.06		Tudweiliog	461.40
Llandwrog	1,029.14		Tywyn	1,605.03
Llandygai	990.62		Waunfawr	560.86

 

namely the amounts calculated as the Council Tax Base amounts for the year for dwellings in those parts of its area to which one or more special items relate.

 

3.       That the following amounts now be calculated by the Council for the year 2019/20 in accordance with Sections 32 to 36 of the Act:

 

(a)    £380,182,830	Being the aggregate of the amounts which the Council estimates for the items set out in Section 32(2)(a) to (e) of the Act (gross expenditure).
(b)   £130,295,020	Being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (3)(a) to (c) of the Act (income).
(c)    £249,887,810	Being the sum that corresponds with the difference between the above aggregate 3 (a) and the above aggregate 3 (b) calculated by the Council, in accordance with Section 32(4) of the Act, as its budgetary requirements for the year (net budget).
(ch) £176,081,773	Being the aggregate of the sums which the Council estimates will be payable for the year into its fund in respect of redistributed Non-domestic Rates and Revenue Support Grant, less the estimated cost to the Council of discretionary Non-domestic rate relief granted.
(d)   £1,421.36	Being the amount in 3(c) above, less the sum in 3(ch) above, all divided by the sum noted in 2(a) above, that was calculated by the Council in accordance with 33(1) of the Act, which is the basic amount of Council Tax for the year (Gwynedd Council tax and the average community council tax).
(dd) £2,343,940	Being the aggregate amount of all special items referred to in Section 34 (1) of the Act (community council precepts).
(e)    £1,376.22	Being the sum in 3 (d) above, less the result of dividing the amount in 3(dd) above divided by the amount in 2(a) above, that was calculated by the Council in in accordance with Section 34 (2) of the Act, as the basic amount of its Council Tax for the year for dwellings in those parts of its area to which no special item relates (Band D for Gwynedd Council Tax only).

 

(f)              For parts of the Council’s area -

 

 

being the amounts given by adding the amounts of the item or special items relating to dwellings in those parts of the Council’s area mentioned above, to the sum given in 3(e) above, divided in each case by the amount of 2(b) above, calculated by the Council, in accordance with Section 34(3) of the Act, as the basic amounts of its Council Tax for the year for dwellings in those parts of its area to which one or more special items relate.

 

(ff)      In respect of part of the Council’s area, the figures noted in Appendix 1, being the amounts given by multiplying the sums specified in 3(f) above by the number which, in the proportion set out in Section 5 (1) of the Act, is applicable to dwellings listed in a particular valuation band divided by the number which in that proportion is applicable to dwellings listed in valuation band D, calculated by the Council, in accordance with Section 36 (1) of the Act, as the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands.

 

4.         That it be noted that for the year 2019/20 the North Wales Police and Crime Commissioner has stated the following amounts in a precept issued to the Council, in accordance with Section 40 of the Act, for each of the categories of dwellings shown below:

 

	Band A	Band B	Band C	Band D	Band E	Band F	Band G	Band H	Band  I
	185.40	216.30	247.20	278.10	339.90	401.70	463.50	556.20	648.90

 

5.         Having calculated the aggregate in each case of the amounts at 3 (ff) and 4 above, the Council, in accordance with Section 30 (2) of the Act, hereby sets the amounts noted in Appendix 2 as the amounts of Council Tax for the year 2019/20 for each of the categories of dwellings shown in the Appendix.