Agenda item

To receive a verbal report by the Head of Finance.

(a)        A verbal update was presented by the Head of Finance regarding the 2016/17 budget and he noted that over the four year period from April 2014 to March 2018 plans were made on the grounds that: 

·         The grant from the Welsh Government to the Council would be reduced by £21m, and

·        inflation and an increase in the demand for services would  add              £29m to the costs, and could create a

·        Financial gap of £50m which had to be found.

 

Over the same four year period (2014 - 2018), it was planned to increase Council Tax by 3.5% per annum (a little higher in 2015/16) which meant a reduction of £9m in the gap, leaving  £41m to be found.

 

Efficiency savings to the value of £26m had been identified and implemented by some Council central departments facing a reduction of 30%.

 

The schools’ £4.3m was part of the £26m ‘efficiency savings’.

 

Of course it may be argued that the difference between “efficiency savings” and “cuts”, was rather vauge, but in the strategy the schools’ £4.3m was ‘efficiency savings’.

 

In addition to the ‘efficieny savings’ of  £26m, it was planned to undertake a further £8m efficiency savings, without requesting more from schools during the four year period up to 2018. .

 

Unfortunately, this would not be sufficient to address the gap of £41m.

 

With the gap remaining, it was identified that the Council would need to realise £7m in cuts, the subject of the Gwynedd Challenge consultation.

 

Following the local government conditional grant settlement, and further work on 2016/16 expenditure requirements, cuts of around £5m were sought over the next two years rather than the £7m that had been planned.

 

This would not mean avoiding any part of the £34m 'efficiency savings'.  Therefore, there would be no change in £4.3m contribution from schools.

 

It was explained that the 2016/17 local government conditional settlement showed a reduction of 1.4% on average to local authorities in Wales, with a reduction of 1.7% for Gwynedd, which was close to what Gwynedd had predicted, namely a reduction of 2%.

 

Regarding safeguarding some of the school budgets, it was noted that there were conditions attached to the accounting exercise, these included -

•              financial impact of any increase or reduction in the number of pupils,

•              increase or reduction in devolvement,

•              contribution of  £2m in 2016/17 from the  £4.3m efficiency savings,

•              specific grant transfers to the settlement, and

•        borrowing costs to invest in school property (linked to the 21^st century schools programme and school organisation) .

Of course, the Council will as usual provide an additional budget for -

•              pay agreements,

•              minimum living wage,

•              increase in teachers’ pension cost contributions,

•              substantial increase in national insurance costs etc.    

(b)  In response to comments made, the Head of Education noted the following points:

·         it would not be required for schools to contribute towards the cuts of £5m between now and 2018 and the contribution from the schools would be £4.3m

·         that a focus would be required on joint-organisation following 2018 and the forecast following this date appeared to be disastrous.

 

Resolved:       To accept and note the above.