An oral presentation will be given by the Head of Finance in the meeting.
Submitted by the Cabinet Member for Finance, and the Head of Finance Department.
It was noted that the presentation of the Budget would be submitted to the Full Council, after being submitted to the Scrutiny Committee and the Cabinet. It was explained that there had been a series of seminars and presentations throughout January to discuss and explain the procedure with the budget to members. Attention was drawn to the fact that there would be constant updates on the budget if there were any changes or adjustments to the figures and the timetable.
It was shared that the normal settlement of Government grants was 9.4% on average in Wales, while it was 8.8% for us in Gwynedd which bodes well. It was explained that the likely reason that Gwynedd received less than the average was that the County's population was lower compared with other counties in Wales. It was noted that it was a significantly larger amount than next year's sum, i.e. 3.5%, with 2.4% the following year. It was explained that inflation currently stood at 5%, but there was concern that it would increase to 7% by April. It was highlighted that these inflations would lead to higher costs.
We were reminded that we had received £16 million in financial support towards Covid from the Welsh Government by the end of this financial year. It was explained that calculations needed to be made to protect us for the future following receiving this financial support, bearing in mind that this financial support would not be distributed next year.
A message of thanks was expressed on behalf of the former Head of Finance to the members of the Forum for all the collaboration over the decades.
It was explained that the equation to obtain a balanced budget was that net expenditure was less than the savings equal to the total government grants and Council tax. It was noted that they had created sensible assumptions about the inflation to come when speculating about the budget in the coming year. It was added that these assumptions included inflation calculations in wages and supplies, the impact of Covid and grant settlements. It was noted that one of the inflations in salaries was the increase in teachers' salaries of 1.75% in the remaining five months of the academic year. There was speculation of a further increase for the new academic period from September to the end of this economic year. It was also explained that consideration was given to the increase in national insurance input of 1.25%. It was noted that there was a calculation of inflation of £2.6 million in all across the Council, including energy and fuel costs, residential care, etc.
It was noted that further adjustments had been made to Schools' Demography to reflect the current situation. It was noted that there was a reduction in the number of pupils in the Primary, but an increase in the number of Secondary pupils. It was explained that net expenditure had received a reduction of £57 thousand as a result of these changes. It was reminded that there had also been a similar impact in the numbers last year.
It was explained that all of this had resulted in further expenditure of £13.2 thousand to respond to the demands of inflation, in addition to extra expenditure of £8.1 thousand on service pressure.
It was noted that the Council had received a budget to support Covid costs until the next financial year, but that this meant the need to provide a budget ourselves to support the impact that would carry to the next financial year.
It was expressed that there was pressure to increase Council tax to justify these additional costs. Attention was drawn to the fact that this could be problematic as there were fewer buildings eligible to pay Council tax this year, mainly due to the numbers of residences that had been converted into holiday units and where no dwellings were coming in to replace them.
It was explained when closing the 2020/21 accounts that an opportunity had come to open Gwynedd's Covid recovery fund, which had now accumulated around £1.4 to deal with Covid requirements. It was noted that the financial strategy fund was also available if it became obligatory for us.
A new procedure was adopted when responding to loss of income applications due to the crisis and now they were arranged according to priority as it was not possible for the Council to respond to the customary £14.5 million cost that had been the case.
It was noted that they had succeeded in Realising Savings, it was explained that more than £32.8 had been saved by the Council since 2015/16. It was explained that as a result of the better than usual settlement this year the Council had succeeded in delaying savings that had been intended to be realised in the 2022/23 financial year. It was further noted that a figure of £1.3 million had managed to be slipped to the year 2023/24 or later, and that two savings plans had been completely deleted from the savings plans which reduced the number of savings to be achieved by half a million. It was further stated that Covid continued to disrupt the savings plans but that this had been facilitated as a result of the settlement they currently had. It was added that there were no new savings for schools nor for the Education Department in the 2022/23 financial year.
£0.5 million per year was allocated in capital bids to be distributed regularly, in addition to any bids that were offered each year. It was explained that these bids were used for any case that arose and needed to be resolved in the coming financial year, for example, £118 thousand was distributed towards the Community Pitch at Ysgol Syr Hugh Owen. It was noted that One-off Bids had supported a one-off fund of £6.1 million in the year 2022/23. It was explained that this budget supported the employment of a Free School Meals Promotion Officer for the year 2022/23. It was noted that almost half the One-off budget also supported many projects related to climate change in the coming year.
It was noted that there was £6.7 million in Permanent Revenue Bids, which was a budget that would appear permanently within the budget, and £449,539 of this was given to the Education Department. It was explained that a large proportion of this money went towards ensuring that post-16 pupils would not have to pay for their travel ticket, for school taxi and train transport, and on employing a Secondary Sector Education Officer.
It was explained that inflation and necessary adjustments had created costs of £12 million which forced a tax increase of 2.9%. It continued to be explained that there would have to be an increase of 1.5% to keep on top of inflation this year, and the rest of the percentage would avoid an excessive impact on the services. It was explained that the effect of this inflation on an individual paying Council tax on band D, would be an 84 pence increase on weekly tax with total tax amounting to £29.37.
RESOLVED - To accept the updates and the report.