Invitees:

Mark Shephard – Chief Executive

Kelly Watson – Chief Officer – Legal, HR & Regulatory Services

Martin Morgans – Head of Performance and Partnership Services

Councillor Huw David – Leader

Councillor Hywel Williams – Deputy Leader

Councillor Dhanisha Patel – Cabinet Member Future Generations and Wellbeing
Gill Lewis – Interim Head of Finance and S151 Officer

Christopher Morris – Finance Manager – Budget Management: Social Services and Wellbeing / Chief Executives

The Interim Head of Finance presented a report to the Committee with the draft Medium Term Financial Strategy 2020-21 to 2023-24, which set out the spending priorities of the Council, key investment objectives and budget areas targeted for necessary savings. The strategy included a financial forecast for 2020-2024 and a detailed draft revenue budget for 2020-21.

She provided the Corporate Plan-Policy Context and Budget Narrative as detailed in section 3 of the report.

The Interim Head of Finance provided the Corporate Financial Overview which showed that the last 10 years, the Council has made £68 million of budget reductions. The graph and 3.3.2 of the report gives a visual representation of reductions year by year.

The Interim Head of Finance explained that the settlement was better than expected with it being at 4.7%, an increase of £8.878 million. She advised, however, that this would be hit by the teachers’ pay award.

The Interim Head of Finance provided details the current year (2019-20) Financial Performance. Table 1 of the report provided the comparison of budget against projected outturn at 30 September 2019.

She advised that the overall projected position at 30 September 2019 was a net underspend of £575,000, comprising £659,000 net overspend on directorates and £4.808 million underspend on corporate budgets, offset by net appropriation to earmarked reserves of £3.574 million.

The Interim Head of Finance explained that Table 2 of the report showed the MTFS proposals supported by MTFS Budget Reduction Contingency Reserve in 2019-20. The level of this review would be kept under review by the Section 151 officer in light of forecast difficulties in delivering specific future budget reduction proposals.

The Interim Head of Finance explained that Table 3 of the report showed the MTFS Scenarios percentage change in AEF. Table 4 showed the Councils potential net budget reduction requirement based on the forecast resource envelope, inescapable spending assumptions and assumed Council Tax increases.

The Interim Head of Finance explained that Table 5 of the report outlined the current position in respect of addressing the most likely forecast budget reduction requirement of £39.332 million. She advised that the Council still needed to develop proposals to the value of £21.1 million and a range of options were under consideration including:

• Digital transformation of wider Council services
• Income generation opportunities
• Further reductions in employee numbers
• Working with partners to asset transfer and protect community facilities
• Further implementation of the Corporate Landlord Model.

The Interim Head of Finance explained that Table 6 showed the budget reduction proposals and their categorisation, with almost two thirds of the proposed savings coming from Smarter Use of Resources. Table 8 showed the Draft Revenue Budget 2020-21 and the breakdown of Service directorate budgets.

The Interim Head of Finance explained the details on Pay, Prices and Demographics. She stated that the National Join Council (NJC) negotiating body had submitted a pay claim for non-teaching staff for 2020-21 and discussions were ongoing. She advised that depending on the outcome of the negotiations, there could be additional budget pressures that the Council had to meet. She added that any additional teachers pay award to be implemented from September 2020 would provide additional pressures. Further details of budget pressures were listed at section 4 of the report.

The Chairperson thanked the Interim Head of Finance for the report and said that the settlement being better than expected was a sigh of relief.

A Member stated that there were cuts in all areas other than schools. Members of the public had shown interest in protecting sports pitches so why were there cuts here and not in schools. The Leader responded stating that schools had already taken big cuts in the past with teachers and managers being made redundant which has had an impact on education outcomes in some schools. He stated that the public consultations always outlined the public’s view that they wish to protect schools and social services.

A Member stated that she felt schools were a very important area to protect as education is important in helping children be the best they can be. She was concerned that the local authority was not ensuring that all schools were equipped to manage their budgets appropriately due to the numerous deficits.

A Member stated that trade unions have indicated a possible 10% pay rise and asked how the negotiations are going. The Leader said that they are still ongoing as it was on a national level rather than a local level. He said that any pay award would need to be fully funded to ensure that it did not come at a cost in services or jobs.

The Interim Head of Finance explained that the timetable for the pay award had been prolonged and that it will likely be later into the year before we receive confirmation on it. She added that a 2% increase was deemed likely and the amount necessary to cover this was set aside.

A Member stated that on page 7 of the report it outlines that in the public consultation, the lowest level of council tax increase was 2% higher than what was actually chosen and asked for clarification on why this was the case.

The Interim Head of Finance stated that the reason the rise was lower than the options given in the consultation was solely because of the settlement received being higher than expected. The Consultation ended before we received the settlement and the figures were based on what we expected to get, not what we actually had.

The Chairperson suggested that a disclaimer be placed at the bottom of the tables stating that the figures were subject to change if the settlement changes.

A Member explained that the relationship with Town and Community Councils needed improvement and the Community Asset Transfer (CAT) was crucial.  He believed that the CAT officer was hard working but was not getting the support he needed.

The Chief Executive stated that it had been recognised that CAT process needed more work and was working on a business case to present to CMB.

He agreed that more work is needed between Town and Community Councils too and that the Town and Community Council Forum was in need of a review so that official outcomes can come from it.

A Member stated that locally, police officers do not see it as a priority to protect buildings and that we need to reinforce our relationship with South Wales Police and ensure that there was enough citizen and community focus.

The Chief Executive stated that South Wales Police would be invited to Council so that Members would be able to ask them questions and raise concerns.

A Member asked for clarification on the proposed cuts to Member training. The Cabinet Member for Wellbeing and Future Generations explained that Member training was never used to its full potential and that the cuts in that budget bring it down to the level that it was currently being used at. 

A Member asked what affect would the proposal at CEX1 – may require restructure - have on the Shared Regulatory Service. The Cabinet Member for Wellbeing and Future Generations explained that this was due to the difficulty in recruiting into the SRS. This was a one time reduction and would not form part of the savings next year.

RESOLVED: That the Committee:

1. Considered the information contained in the report and attached appendices
2. Made comments and recommendations for consolidation and inclusion in their report to Cabinet as detailed below:

“The committee welcomes the improved budget settlement, which has been directed to where it is favourable.”

“In relation to the consultation ‘Shaping Bridgend’s Future’, Members suggested that future Budget Consultation's should include a caveat at the bottom stating that 'should the settlement be more generous, this could be subject to change’ or similar.”