Agenda item

It was agreed to recommend the following to the Full Council on 4 March:

1.    Establish a budget of £271,751,360 for 2021/22 to be funded through a
Government Grant of £194,793,140 and £76,958,220 of Council Tax income with
an increase of 3.7%.

2.    Establish a capital programme of £47,085,960 in 2021/22, to be funded from the sources noted in Appendix 4 of the report.

It was noted that the figures in recommendation 1 above would change in line with the figures in Appendix 5 of the report should the Full Council increase the Council Tax Premium from 50% to 100%.

The report was submitted by Cllr Ioan Thomas 

DECISION

It was agreed to recommend the following to the Full Council on 4 March:

1.    Establish a budget of £271,751,360 for 2021/22 to be funded through a
Government Grant of £194,793,140 and £76,958,220 of Council Tax income with
an increase of 3.7%.

2.    Establish a capital programme of £47,085,960 in 2021/22, to be funded from the sources noted in Appendix 4 of the report.

It was noted that the figures in recommendation 1 above would change in line with the figures in Appendix 6 of the report should the Full Council increase the Council Tax Premium from 50% to 100%.

DISCUSSION

The report was submitted noting that the Council this year had received a grant increase, which met inflation and was a fairer settlement than those in the years before 2020/21. Nevertheless, as unavoidable increases in the cost of some core services needed to be funded, it was noted that the Tax would have to be increased by 3.7%. It was emphasised that increasing the tax was necessary in order to protect essential services for the people of Gwynedd, as it would be impractical to implement additional savings schemes this year.

Attention was drawn to the fact that most Council members had attended a series of consultation workshops, and a positive discussion had been held at the Audit and Governance Committee. By 2021/22, it was noted that expenditure would need to increase by £10.6m in order to stand still, including £3.6m to meet pressures on the services’ budgets. In order to address the financial gap, it was explained that £725k could be harvested in 2021/22 from the savings schemes already planned, but Council Tax would have to be increased by 3.7%.

It was added that the Welsh Government’s official figures showed that the Council would receive a grant increase of £6.4m by next year, which was an increase of 3.4%. It was explained that Welsh Government would announce the final grant settlement on 2 March, along with the Welsh Government's final budget. The Cabinet was guided through the revenue expenditure highlighting that the estimated salary inflation was £3.5m. Despite the UK Government Chancellor’s desire for a pay freeze, it was noted that there would be a pay increase of £250 pro rata to staff on salaries of £24,000 or less, together with prudent provision for all Council staff. It was also highlighted that there would be a 3.1% salary increase for Gwynedd’s school teachers for the period April – August 2021.

It was noted that other inflation was £2.6m, which included provision for the effect of the ‘living wage’, along with an increase in inflation on fuel and energy budgets and an increase in re-tendering prices. It was emphasised that there were pressures on services and it was recommended to approve applications worth £3.59m that had been submitted by the departments for additional permanent resources. It was noted that total Government support in light of the Covid-19 crisis was expected to be in the region of £20m by the end of 2020/21 and it was anticipated that the Government would continue to compensate for additional costs and loss of income in the next financial year.

Attention was drawn to decisions made by the Cabinet on 26 January 2021 to defer or eliminate unrealisable historic savings, highlighting that a net total of £725k in savings could be used to reduce the 2020/21 budget funding gap.

In order to set up the budget, it was noted that a gap of £77m would need to be met by increasing the Council Tax by 3.7%. It was emphasised that the choice between maintaining services and taxing was a difficult one, but it was noted that the average tax increase of the other local authorities across Wales was likely to be around 4.1%.

Observations arising from the discussion

¾     It was highlighted that there was an Education bid as a result of new legislation, and that the Government had noted that it would be a neutral cost, but it was highlighted that there were risks as a result of the legislation that needed to be funded.

¾     It was noted that nobody liked to increase taxes but there was a need for the money to be available to support residents. It was noted that the Finance Department sympathised with residents and referred them for support via benefits or allowed them time to pay.

¾     The officers were thanked for their work and the members for their input.