Agenda item

To submit the report of the Head of Finance.

Submitted – the report of the Cabinet Member for Resources on the budget, providing an opportunity for the Audit Committee to scrutinise the financial propriety and associated risks of the information prior to the report being submitted to the Cabinet on 14 February.

          The Cabinet Member for Resources set out the background and context of the report. He referred to the four budget seminars held during January/February to obtain members' input, and noted his disappointment at the number that didn’t attend. He noted that it was difficult to predict the future but that the Council had made future projections and the financial arrangements implemented by the Council had been approved by the Wales Audit Office.

          The Head of Finance Department elaborated on the content of the report and noted that the Council would receive an increase of 1.1% to its grant, which compared with a Wales average of 0.3%. It was noted that officers from Gwynedd had taken a leading role in providing the evidence to justify changing the distribution formula to reflect the true cost of care in rural areas. Attention was drawn to Appendix 1 of the report submitted to the Cabinet, which detailed the unavoidable bids to respond to the pressures on services.

          It was noted, in general, that there was support in the finance seminars for a 2.8% increase in Council Tax. It was explained that a comprehensive review of the Council's assets would be conducted under the guidance of the Chief Executive, and an Assets Strategy would be drawn up and enforced from 2018/19 for a period of 10 years.

Members were given an opportunity to ask questions and make observations. During the discussion, the following main points were highlighted:-

·         What would the people of Gwynedd gain from the apprenticeship levy?

·         There was a substantial rise in the North Wales Fire and Rescue Service Levy. What was the Council's input to the process?

·         In relation to further efficiency savings, there was concern that the Full Council did not partake in decisions which impacted the people of Gwynedd.

·         Doubtful that it would be possible to find further efficiency savings.

·         That the finance seminars held were beneficial. The recommendation was balanced and thorough.

·         Should the Westminster Government and Welsh Government be persuaded to adopt the English form of business taxes in Wales in order to allow the Council to make use of business rates?

·         The Council collected funds on behalf of the Fire Service and the Snowdonia National Park through the Council Tax arrangement. Would it be possible to present a more detailed breakdown on the Council Tax form?

·         It would be better to include a more detailed breakdown on the Council Tax form rather than in Newyddion Gwynedd.

·         The level of small business tax relief scheme was lower in Wales than in England. What was the impact?

A response was given to the questions and observations as follows:-

·         The apprenticeship levy was almost the equivalent of a 1% increase to Council Tax. The levy was a plan by the Westminster Government to boost the number of apprentices, most of the funds generated in Wales would not be spent in Wales. It was noted that the Cabinet Member for Resources had sent correspondence to the Cabinet Secretary in the Welsh Government about opportunities for the region and the possibility of using the funds for training schemes rather than on employment costs. This would not take place this year, but future opportunities would be sought.

·         It was the Council that financed the Fire Service levy, but it was the Fire Service's independent decision to set the levy. The Council’s representatives on the Fire Authority were entrusted.

·         Further efficiency savings plans had been submitted to Cabinet for approval. Each savings plan was likely to affect someone somewhere, but an attempt was made to mitigate that impact by delivering services for the people of Gwynedd by alternative means. The other option was cuts which would mean abolishing some services entirely. Members were reminded of the Calling In Procedure where a decision made by the Cabinet could be called in for scrutiny.

·         Further savings opportunities would be sought rather than imposing a further increase in Council Tax or further cuts which would have a direct impact on the people of Gwynedd. It was a difficult task to deliver on behalf of the people of Gwynedd given the financial situation, and sympathy was extended to members.

·         Under the current business rates arrangements in England, the grant received from the Government was amended when regions received the business tax. If the arrangement were to be adopted in Wales, It would likely lead to a cut in grant money and a higher financial risk for the Council.

·         The Council Tax bill was statutory with a separate leaflet listing expenditure. Newyddion Gwynedd would be distributed in the near future and it would be verified whether it would be possible to mention the situation therein.

·         As a source of information, Newyddion Gwynedd had been ranked higher than a number of other sources by the people of Gwynedd in a survey held in 2009.

·         Extending the tax relief plan for small businesses would help businesses, and the Gwynedd economy, and the Council would support the Welsh Government should it choose to extend it.

RESOLVED to note and accept the report and the associated risks, and recommend that the Cabinet:

(i)    recommend that the Council (at its meeting on 2 March 2017):

1.     set a budget of £231,299,720 for 2017/18 to be funded by £168,963,540 of Government Grants and £62,336,180 of Council Tax income, which will have been increased by 2.8% (or an amended combination of figures after the Cabinet has considered the options).

2.     Establish a capital programme of £12.015m in 2017/18 and £6.410m in 2018/19 to be funded from sources noted in clause 9.3 of the report.

(ii)   note the Medium Term Financial Plan in Appendix 4, and adopt the strategy in part 15-17 of the Plan.