Agenda item

To submit the report of the Head of Finance.

Submitted – a report by the Head of Finance Department detailing the Council’s Financial Strategy for the next four years. It was reported that the Welsh Government would publish its draft budget on 8 December and the provisional settlement to fund local government on 9 December.

Attention was drawn to a table which detailed potential scenarios in terms of the settlement the Council could receive from the Welsh Government which had been created by the Finance Department in collaboration with the Research and Analysis Unit. It was noted that grant cuts were expected and that the Council had demonstrated a responsible approach when undertaking the Gwynedd Challenge consultation on potential service cuts. 

It was reported that the Cabinet had considered the report on 24 November 2015, the following decisions were submitted for the attention of the committee to scrutinise -

“To accept the update and the summary of the 2016/17 – 2019/2020 Financial Strategy and continue with the current response plan, ‘Gwynedd Challenge’, for 2016/17 – 2017/18, while stating -

a)    That Gwynedd Council Cabinet opposes the cuts in its grant allocation enforced on the Council by the Westminster and Welsh Governments.

b)    That Gwynedd Council Cabinet will deliver on its statutory responsibility to agree on a balanced budget in order that it does not, ultimately, run out of money and fail to pay its employees and suppliers.

The Cabinet Member for Resources noted that approximately 75% of Council revenue depended on grants. He highlighted that the Welsh Government intended to provide a settlement per year, with no indicative figures in respect of subsequent years, which would make it unpractical for the Council to implement a financial strategy over 4 years.

During the ensuing discussion, officers responded to members’ enquiries as follows:

·        Should there be a review of the Barnett formula, there would be uncertainty in terms of its outcome;

·        Chancellor George Osborne’s announcement on 25 November would set the bar for the Barnett formula, and would mean that funding allocated for the Welsh Government would be approximately the same as what had been currently allocated;

·        The Full Council at its meeting on 3 March 2016 would set the Council Tax for 2016/17. It was noted that a question had been included in the Gwynedd Challenge consultation to gather the opinion of Gwynedd residents on increasing the Council Tax;

·        That closing date of the Gwynedd Challenge consultation had been extended until 4 December 2015 and members were requested to encourage their electors to participate;

·        Over 2,000 responses to the consultation had been received thus far and that the response was among the highest in terms of public consultations held by the Council;

·       Should the Council not undertake cuts, an increase of approximately 12% would be required in the 2016/17 Council Tax to address the financial position. This would not be permitted;

·        Discussions would be held with relevant Departments in terms of their income targets for 2016/17 and changes to fees would be a consideration when establishing budgets.

The Chairman expressed his gratitude for all the work undertaken by the officers on the Council's Financial Strategy.

RESOLVED to note the situation and the relevant risks in the context of the Council’s Financial Strategy.