Agenda item

To recommend to the Council (at its meeting on 3 March 2022):

1.    To set a budget of £295,232,820 for 2022/23, to be funded by £213,210,400 of Government Grant and £82,022,420 of Council Tax income, with an increase of 2.95%.

2.    To establish a capital programme of £59,074,980 in 2022/23, to be funded from the sources noted in Appendix 4 of the report.

The item was presented by Cllr Ioan Thomas

RESOLVED

To recommend to the Council (at its meeting on 3 March 2022):

1.    To set a budget of £295,232,820 for 2022/23, to be funded by £213,210,400 of Government Grant and £82,022,420 of Council Tax income, with an increase of 2.95%.

2.     To establish a capital programme of £59,074,980 in 2022/23, to be funded from the sources noted in Appendix 4 of the report.

DISCUSSION

The report was presented and the decision was noted. It was explained that Welsh Government would announce the final grant settlement for local authorities on 2 March. It was noted that the Council had received a draft grant increase for 2022/23 which was a significant increase on what had been received in previous years. It was noted that the grant increase was of 8.8%, equivalent to an £18.1m.

It was noted that, despite this year's reasonable settlement, there were a number of factors that would create additional spending pressures on services in 2022/23. It was explained that, as well as addressing inflation rate, there was an opportunity to deal with wider expenditure pressures, including getting to grips with continued costs stemming from Covid-19 and cancelling or delaying savings schemes that it was not practicable to realise in 2022/23. It was noted that additional expenditure requirements considered totalled £20.2m and attention was drawn particularly to four headings of increases.

The first was salary inflation of £8.5m, and it was noted that the budget set aside an estimated increase of 4% in the 2022/23 pay agreement for the whole workforce and it was noted that an increase of 1.25% in National Insurance contributions would become effective in April 2022. Secondly was Other Inflation, and it was explained that the amount included provision for the impact of the 'living wage' on costs and fees payable to private suppliers together with inflationary increases on fuel and energy budgets and prices following re-tendering.

The third was Pressure on Services, and it was recommended that bids worth £6.7m for additional permanent resources submitted by Council departments to meet inevitable pressures on their services were approved. In addition to the permanent bids, it was also recommended that 'one-off' bids worth £6.2m to be funded from the Transformation Fund were approved. The fourth was Covid-19 pressures of £1.4m. It was stated that, since April 2020, the Government had compensated local authorities for the additional costs of the pandemic from the Hardship Fund. However, the Government had stated unequivocally that this support would cease at the end of March 2022 and local authorities would be expected to fund any additional costs or loss of income due to the pandemic thereafter. It was not anticipated that the £1.4m would be sufficient in itself but other funds were available within the Council to assist, such as the Covid Recovery Fund established when closing the accounts in 2020/21. 

It was stated in relation to savings schemes, that the Council had realised £32.8m of savings schemes since 2015/16.  As a result of the flexibility that this year's settlement had offered, savings worth £1.8m, originally planned to be realised in 2022/23, would no longer contribute to closing the budgetary gap. It was noted that savings schemes worth £595,000 remained in the programme to be taken out of the 2022/23 budget rather than £2.4m.

It was noted that the Council's expenditure requirements before taking out the savings for 2022/23 was £295.8m, and it was noted that the grant from the Government would be £213.2m. After taking account of the savings of £0.6m, there was a residual gap of £82m, and it was recommended that the gap be addressed through Council Tax, which meant and increase of 2.95%.

Looking to the future, it was noted that Welsh Government, when announcing the draft settlement, had confirmed that Local Authorities would receive +3.5% in 2023/24 and then +2.4% in 2024/25. It was noted that the increase would be substantially lower than that received in 2022/23. It was noted that in taking account of inflation rates, savings schemes would have to be revisited when planning for these years.

The Head of Finance added that the settlement was a good one, but that there was a need to monitor the settlement for the subsequent two years in order to be able to deal with the additional pressures on services.

Observations arising from the discussion

¾    The budget was supported and pride was expressed that funds could be committed through bids to the care field, as well as climate change, of £3m. Attention was drawn to expenditure of £330 on computer licences and it was noted that the figure was high for software. It was explained that a team was looking at information technology software across the Council, but that costs would continue for the time being to ensure service continuation.

¾    Support was expressed to removing the Post-16 travel pass costs, which would offer more opportunities for young people and was a scheme that would really make a difference.

¾    It was noted that the situation was good compared to some previous years when there were regular discussions about cuts. Attention was drawn to a billion pounds which had now been lost from European funds across Wales, and that there were no additional funds from the Westminster Government.

¾    It was stressed that it would have been easy not to raise the Council Tax, particularly in an election year, but it was explained that this was the responsible decision to make.