To receive declarations of personal and prejudicial interest (if any) from Members/Officers in accordance with the provisions of the Members’ Code of Conduct adopted by Council from 1 September 2008.

Councillor JP Blundell declared a personal interest in the Capital Strategy report, as he had an interest in one of the items mentioned therein.

To receive for approval the Minutes of 17/01/2023

RESOLVED:                                   That the Minutes of a meeting of the Cabinet dated 17 January 2023, be approved as a true and accurate record.

The Chief Executive presented a report, the purpose of which, was to provide an update on the Council’s Corporate Plan and seek endorsement from Cabinet for the Corporate Plan 2023-28, attached at Appendix 1 to the report, prior to submission to Council for approval on 1 March 2023.

He explained that the Council’s Medium Term Financial Strategy (MTFS) 2023-2027 is being presented to Council for approval on 1 March 2023 alongside the updated Corporate Plan 2023-28. The two documents are aligned to each other, enabling the reader to make explicit links between the Council’s well-being objectives and the resources directed to support them. 

The Wellbeing of Future Generations (Wales) Act 2015 (“the Act”) states that public bodies, including local authorities, must work to improve the economic, social, environmental and cultural well-being of Wales, with certain actions needing to be taken in order to achieve this.

Paragraph 3.3 of the report confirmed that there are 7 wellbeing goals for Wales, set out in the above Act and the Council were required to demonstrate its contribution to each of these goals. These wellbeing goals were listed in the report.

The Chief Executive confirmed that the Corporate Plan was the Council’s main vehicle for demonstrating and communicating the priorities to local people and businesses. It was also an important part of the assurance framework for its regulators. Audit Wales intend to test approaches to developing the Corporate Plan (especially the well-being objectives) across Wales over the next 6 months, hence the importance of the Plan.

Research and early engagement feedback undertaken, had combined a set of draft principles and wellbeing objectives, which formed part of the annual budget consultation and the staff survey, and these were discussed with Cabinet Members, and political groups. 

These principles and wellbeing objectives had been brought together in the draft Corporate Plan attached at Appendix 1 to the report.

The Chief Executive advised, that the draft Corporate Plan, was brief and accessible with simple language, wide use of infographics (although these will be developed by the designers following Council approval) and a focus on principles / ways of working as well as the well-being objectives. There is a focus throughout the report on the financial situation and need for change, putting residents first and improving responsiveness and communications as well as personal / community responsibility alongside Council services. In short, the Plan was better laid out; concise yet informative and was therefore easier to read and take in, than had been previous versions.

Detail of the objectives and performance indicators (or key results) arising from the Corporate Plan, would form part of the Corporate Plan Delivery Plan, to be developed alongside the Corporate Overview and Scrutiny Committee in March and April 2023.

The Chief Executive stated that since initial engagement with the Corporate Overview and Scrutiny Committee, significant changes have been made to the Corporate Plan to reflect the Committee’s views, and the views of staff and residents. These were detailed in paragraph 4.6 of the report.

Cabinet  ...  view the full minutes text for item 141.

The Chief Officer – Finance, Performance and Change submitted a report, in order to present to Cabinet the Medium Term Financial Strategy for the period 2023-24 to 2026-27. This included:

•           A financial forecast for 2023 to 2027;

•           A detailed revenue budget for the coming financial year; and

•           the capital programme for the period 2022-2023 to 2032 – 2033

The Corporate Plan and Medium Term Financial Strategy identify the Council’s service and resource priorities for the next four financial years, with particular focus on 2023-2024.

The MTFS outlined the principles and detailed assumptions which drive the Councils budget and spending decisions, it outlines the financial context within which the council is operating and attempts to mitigate any financial risks and pressures going forward whilst at the same time taking advantage of any opportunities arising.

The strategy focuses on how the council intends to respond to the increasing pressures on public sector services, which were exacerbated during the COVID-19 pandemic, and immediately following that, by the current cost of living crisis. It sets out the approaches and principles the council will follow to ensure it remains financially sustainable and delivers on the corporate well-being objectives

The Chief Officer – Finance, Performance and Change quarterly reports to Cabinet during this financial year on the projected revenue position for 2022/2023, outlined in detail the impact on the budget of the additional cost pressures faced by the Council throughout the year as a result of the worsening economic climate, rising inflation and interest rates. These have been reflected in rising prices, higher than anticipated pay increases and significant tender price increases for goods and services.

The final financial settlement for local government in Wales was not due to be announced until the end of this month. As a result, this budget is being proposed on the basis of the provisional settlement received in December 2022. Whilst we do not anticipate any significant change in funding between the provisional and final settlement, any changes will be reported back to Council at a later date.

The budget had been prepared following consultation with elected members, the school budget forum and service managers. Subject to the risks identified, the MTFS provided a firm basis for managing the Council's resources for the financial year 2023 / 2024 and beyond.

Annex 3 of the report contained the detailed Medium Term Financial Strategy.

Section one of the MTFS included a financial overview of the Council. The Chief Officer – Finance, Performance and Change, confirmed that Members will be aware that the Council has had to make budget reductions in previous years and Chart 1 in this part of the report, indicated that budget reductions of £73 million have been found since 2010 – 2011. These   represented almost 23% of the Council’s net budget in the current year.

The Council received the majority of its revenue funding from Welsh Government through the revenue support grant and a share of the non- domestic rates. It was important to note that  ...  view the full minutes text for item 142.

The Chief Officer – Finance, Performance and Change presented a report, that presented Cabinet with the Treasury Management Strategy 2023-24 (at Appendix A of the report), which included the Prudential Indicators, and the Annual Minimum Revenue Provision Statement 2023-24 (Section 7 of Appendix A), before submitting to Council for approval.

By way of background, she confirmed that local authorities are required to determine a Capital Strategy which demonstrates that the authority takes capital expenditure and investment decisions in line with service objectives and properly takes account of stewardship, value for money, prudence, sustainability and affordability when making these decisions.

The Strategy sets out the Council's plan for capital expenditure, and how that is to be funded, over the coming 10 years. In developing long term investment decisions, it is crucial that decisions are based on clear information, including a long term plan of management plans. Where capital investment is needed to deliver the council's priorities, the Strategy is the framework that the Council can rely on to develop a clear, consistent and informed process in undertaking capital investment decisions.

The document is an integral part of the Council's budget and policy framework and linked with the Corporate Plan, Treasury Management Strategy, the Medium Term Financial Strategy and the Council's Asset Management Plan

There were 13 principles which drive the budget and spending decisions of this Council, three of which refer specifically to the Capital Programme.

These were :

•           capital investment decisions are in alignment with the council's capital strategy and mitigate any statutory risks taking account of return on investment and sound options appraisals;

•           prudential borrowing is only used to support the capital programme where it is affordable and sustainable within the councils overall borrowing limits and the revenue budget over the long term;

•           decisions on the treatment of surplus assets are based on an assessment of the potential contribution to the revenue budget and the capital programme.

The Capital Strategy was also based on the following principles, added the Chief Officer – Finance, Performance and Change :

•           capital investment is focused on the delivery of the Councils well being objectives and priorities.

•           ensure strong governance over decision making.

•           ensure capital plans are affordable, sustainable and prudent

•           maximise and promote the best use of available funds.

The Plan detailed how any proposed investments in land and buildings will require the completion of a full feasibility study to evaluate the practicality of the capital project, and to assess its deliverability before the Council invests time and money into that project.

The Strategy noted that there are a number of significant areas that will need financing going forward, including economic recovery, decarbonisation and homelessness, digitalisation and coastal defences.  As reported to Council throughout this year there are also other financial pressures arising as a result of the pandemic and Brexit, which are being seen in existing schemes, and it is anticipated this will continue for some time going forward. The pressures include supply chain difficulties  ...  view the full minutes text for item 143.

The Chief Officer – Finance, Performance and Change presented a report, the purpose of which, was to present to Cabinet the Treasury Management Strategy 2023-24 (Appendix A to the report), which included the Treasury Management Indicators, before submitting these to Council for approval.

She explained that the Treasury Management functions of the Council are regulated by the Local Government Act 2003. This provided authorities with the powers to borrow and invest as well as providing controls and limits on this activity.

In accordance with the Chartered Institute of Public Finance’s Prudential Code for Capital Finance the Council must approve a Treasury Management Strategy before the start of each financial year, which sets out both its and the Chief Financial Officer’s responsibilities, delegation and reporting arrangements.

The proposed Strategy for the coming financial year was attached at Appendix A to the report. The Council undertook its treasury management activities in accordance with the Chartered Institute of Public Finance’s prudential code, which has been updated to reflect changes in an increasingly complex environment and to complement changes to regulations. The code required that formal and comprehensive objectives, policies and practices, strategies and reporting arrangements are in place for the effective management and control of treasury management activities and that the effective management and control of ‘risk’ are the prime objectives of these activities.

The Chief Officer – Finance, Performance and Change added that, the Council has an integrated Treasury Management Strategy where borrowing and investments are managed in accordance with best professional practise. The Council will look to borrow money if needed to either meet short term cash flow needs, or to fund capital schemes approved within the capital programme. Therefore, any actual loans taken were not generally associated with particular items of expenditure or assets.

The Council was exposed to financial risks including the potential loss of invested funds and the revenue effect of changing interest rates. The successful identification, monitoring and control of risk, is therefore central to our Treasury Management Strategy. Should anything change significantly, a revised Strategy would be presented to Council for approval.

The ongoing impact on the UK of the war in Ukraine, together with higher inflation, higher interest rates, uncertain government policy and a deteriorating economic outlook, will be major influences on the Council's Treasury Management Strategy for 2023-2024.

As at the 31st of December 2022, the Council held £99.8 million of borrowing and £94.05 million of investments. The external debt and investment position was shown in Table 1 within the Treasury Management Strategy.

The Strategy highlighted that it is anticipated that the Council may need to borrow during the next three years. However, this position can change should capital schemes not progress as anticipated, or conversely further schemes are added to the Capital Programme that are not fully funded by grant or revenue contributions, or new schemes added which require additional debt financing.

The requirement to borrow will need to be monitored on an ongoing basis and any new borrowing will be considered alongside  ...  view the full minutes text for item 144.

To consider any items of business that by reason of special circumstances the chairperson is of the opinion should be considered at the meeting as a matter of urgency in accordance with paragraph 2.4 (e) of the Cabinet Procedure Rules within the Constitution.

None.