To receive a verbal report by the Head of Finance.
Minutes:
(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
21st 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.