Agenda item

To recommend to the Council (at its meeting on 2 March 2023) to:

 

1.     Set a budget of £317,880,310 for 2023/24, to be funded by £227,842,930 of Government Grant and £90,037,380 Council Tax income (which is an increase of 4.95% on the tax of individual dwellings).

 

2.     To set a capital programme of £67,780,150 in 2023/24, to be funded from the sources noted in Appendix 4 of the report.

The report was submitted by Cllr Ioan Thomas 

 

DECISION 

 

To recommend to the Council (at its meeting on 2 March 2023) to:  

 

1.    Set a budget of £317,880,310 for 2023/24, to be funded by £227,842,930 of Government Grant and £90,037,380 Council Tax income (which is an increase of 4.95% on the tax of individual dwellings). 

 

2.    To set a capital programme of £67,780,150 in 2023/24, to be funded from the sources noted in Appendix 4 of the report.  

 

DISCUSSION 

 

The report was presented and the decision sought was noted. It was noted that the recommendation to increase council tax in a period of increasing costs of living was not an easy recommendation to make given the impact on the residents of Gwynedd. Reference was made to the financial challenges facing Local Authorities across Wales, particularly given recent inflation levels which were currently over 10%.  

 

It was noted that Cyngor Gwynedd had received a grant increase of 7% for 2023/24 which was a significant improvement on the indicative settlement and was equivalent to an increase to the value of £14.6 million in external funding. However, it was stressed that this amount was not sufficient to meet inflation and additional pressures on services. 

 

Reference was made to the provision fo salary inflation which was £14.2 million. It was explained that salary inflation in the 2023/24 budget included  an element to correct the 2022/23 deficit as the final agreement was higher that what had been budgeted for, as well as consider notional inflation for 2023/24. It was also mentioned that there was provision for other inflation of £11.1 million which included £3.3 million of inflation on electricity prices and £3 million in the care field.  

 

It was recommended that bids to the value of £2.75 million for additional permanent resources submitted by the Council's Departments to meet unavoidable pressures on services should be approved. It was believed that these bids were necessary and were in additional to the £3 million extra added to the Homelessness budget funded from the Council Tax Premium. 

 

It was explained that all bids submitted had been challenged thoroughly by the Leadership Team as well as considered in the Budget Seminar with all members held on 26 January 2023. 

 

To summarise, it was noted that the Council's spending needs (before taking out savings) for 2023/24 was £323.1 million as noted in part 3 of the report. It had been noted in part 2 that the grant from Welsh Government would be £227.8 million. This meant that there was a residual deficit of £95.2 million to be filled. It was recommended to meet the remaining deficit through Council Tax as well as using the savings; using the savings that had already been approved for 2023/24 and the new ones would create a total of £5.2 million which would be used to reduce the financial deficit. Increasing the Council Tax by 4.95% would generate a little over £90 million in income, which would be sufficient to full the financial deficit.  

 

Attention was drawn to Appendix 4 which reflected the capital requirement, as well as funding, in order to establish an entire programme worth £67 million in 2023/24. It was noted that the Head of Finance would note the observations received from members of the Governance and Audit Committee held on 9 February 2023. 

 

The Head of Finance added that there were no specific points by the Governance and Audit Committee for the Cabinet to consider but that he would refer to the observations received. A question had been received about the use of balances with the Head of Finance explaining why it was not use made by the Council; this response had been accepted by the Committee. A comment had been received on inflation costs on teachers' salaries as there had been mention from Welsh Government that there would by a further increase to teachers' salaries. It had been asked whether the budget would have to be adapted to address this. The Head of Finance had noted that not enough details had been received to date about this proposal but he would expect that the Welsh Government would fund the increase through an additional grant. He added that not enough information had been recieved to adapt the budget. 

 

A further question had been asked about the Corporate Joint Committee and its increasing levy. It had been explained that the Corporate Joint Committee's responsibilities continued to grow through the regional Planning and Transportation Sub-committees which were in the process of being established. It had been noted that decisions needed to be made and reference had been made to the discussions about the intention to combine the CJC's governance responsibilities with that of the Economic Ambition Board. Assurance had been given that the Finance Officers had been doing their best to keep costs down in relation to the regional work. 

 

As well as the above, the Governance and Audit Committee had asked whether the 2024/25 financial year would be even more difficult. It had been explained that plans had been made to fill the financial deficit for the next two years but that it was difficult to anticipate what inflation levels would be by then and what the settlement would be. It was added that Committee Members had been pleased to support the bids.  

 

Finally, a question had been asked about the use of the Premium for Homelessness purposes to deal with further expenditure but reference had been made to the specific sum of £3 million which had already been earmarked for 2023/24 for this purpose. 

 

Observations arising from the discussion 

·                  It was asked if the Council had not agreed to increase the Premium form 100% to 150% back in December 2022, how much more would have to be earmarked to deal with the deficit in Homelessness. 

·                  In response, the Head of Finance noted that the deficit would be equivalent to increasing the Council Tax by 3% - 4%.  

·                  A question was asked about the impact of increasing the Council Tax. The opportunity was taken to talk about the work of the benefits team and the assistance offered by the Council. The Council Tax Reduction Scheme was referred to, and the residents of Gwynedd were encouraged to apply for it, and it was noted that further information was available on the Council website. It was added that some would not be eligible for the Scheme as there were strict rules imposed by the Government but that further assistance was available by the Council from various Departments such as tackling poerty to try to fill the gap. It was recognised that officers used to encourage applications for benefits and that this gap may be one that would need to be addressed in the future.  

·                  It was recommended that anyone having difficulty paying the Council Tax should contact the Department, not only those receiving benefits, assistance would be available for all.  

·                  It was noted that the report referred to some very positive aspects and showed the Council's ability to deal with risks. It was added that one of the Council's main risks over the year was its inability to provide enough care due to a shortage of carers. It was noted now that the Council, when setting the budget, had been able to meet this pressure by increasing carers' salaries to a competitive level which reflected their duties. It was hoped that this would allow the Council to attract more carers to do this necessary work which was a positive step.