This item will be accompanied by a Presentation from the Head of Finance and Section 151 Officer.

The Head of Finance and S151 Officer presented a report, the purpose of which, was to provide the Forum with an update on progress of the Council’s Budget (ie Medium Term Financial Strategy (MTFS)).

 

By way of background he advised that the Council had a four year MTFS which includes a 1 year Budget. This was updated annually through the Scrutiny and Cabinet process prior to being approved by Council, most recently on 1 March 2017. The Strategy identified the resources to support the delivery of the improvement priorities, as well as those required to support ‘business as usual’ activities. He reminded those present that the MTFS covered the period 2018-19 to 2021-22.

 

The Head of Finance and S151 Officer confirmed that over the last 4 years, BCBC like other Authorities, had experienced a period of unprecedented financial challenge. During this time, the Council has had to identify and deliver approximately £36m of recurrent budget reductions.

 

With regard to the more present and future situation, on top of these reductions, the Council currently forecasted a further funding shortfall of approximately £35m between 2018-19 and 2021-22.

 

The Head of Finance and S151 Officer stated that in addition to reducing financial settlements from Welsh Government each year, the Council faced additional and increasing financial pressure in future years as a result of:-

 

• Any future unfunded legislative pressures
• Upward pressure on staff pay costs as pay restraint becomes relaxed
• Structural pay issues driven by compliance with the national living wage
• Rising price inflation impacting external supply contracts

Although local authorities received their draft Welsh Government settlement just recently, the Head of Finance and S151 Officer confirmed that the full impact of any changes would not be fully clear until sometime yet to come, and as the picture emerges on specific grant allocations.

 

The MTFS proposals would then emerge from this and the Budget would then be shaped and shared with the Council’s Overview and Scrutiny Committees, prior to being agreed by the Executive (ie Cabinet) and finally approved by Council.

 

Paragraph 4.5 of the report then outlined that the Council’s MTFS assumed an increase of 4.2% to Council Tax in 2018-19, and 4.5% annually for each year after. This section of the report also gave details of the wider budget timetable, and specific dates relating to Council Tax considerations.

 

The Head of Finance and S151 Officer confirmed that the MTFS allocated resources for the delivery of the Authority’s Corporate Plan, which provided the general direction for service delivery. The final Budget proposals is intended to cover a wide range of services, and it was inevitable that the necessary budget reductions in developing these proposals will impact on the local population in different ways.

 

Finally, he then referred to the report’s financial implications which confirmed that the Council’s priorities and Corporate Plan are sufficiently supported by its MTFS. The MTFS covering the period 2018-2022 was in the process of development, and it was intended to hold a joint public consultation on the financial priorities and emerging MTFS proposals during October – November 2017.

 

The Head of Finance and S151 Officer supported his report with a Power Point Presentation which outlined the history associated with the MTFS concentrating upon the following areas:-

 

1.     Reductions in Welsh Government funding;

2.    Budget pressures (including School protection);

3.    Pay price and inflation;

4.    Transfers and new responsibilities

 

The financial challenge as a result of the above.

 

The Head of Finance and S151 Officer also referred to Council Tax income and Budget reductions in recent years, and the Total Mitigation in respect of these pressures.

 

He further explained that the Local Government Settlement for 2017-18 was an average of -0.5% for Welsh local authorities (0.6% for BCBC), though specific information with regard to grant funding had not as yet been made available.

 

Moving forward to 2019 onwards, he advised that BCBC were facing a -1.5% indicative settlement for 2019-20, with the risks identified still in being with a further added pressure as alluded to earlier, in respect of the implementation of the National Living Wage.

 

The Head of Finance and S151 Officer advised that engagement could continue with Town and Community Councils (T&CC’s) on areas where possible collaboration could take place, and/or where T&CC’s could fund things themselves through their precept. These could for example include Public Conveniences, Reduced Street Cleaning, Transfer of Community Centres (to Voluntary Organisations) and subsidised bus travel, etc.

 

To conclude his Presentation, the Head of Finance and S151 Officer referred to some timelines and key dates in terms of the Budget Strategy, which were Tax bases communicated to T&CC’s (late November); report to Council to formally set Tax Base (28 November), T&CC’s submission deadline for precept (early January), and report to Council to approve Council tax and precepts (28 February).

 

The Chairperson advised that the extent of savings ie which total £49m, could not be made without shrinking the workforce, as well as a further reduction in services, as it was too big an ask to continue to make the savings that needed to be made, through efficiency savings alone. The Council would continue the good work that had been made to date he added, by doing things more effectively through more innovative methods and by combining  with other providers, in order to provide services collaboratively where this was possible. BCBC would also look wherever it was possible, to reduce management and administrative costs, and to make what would be a significant saving by improving methods in of early prevention and intervention in Children’s and Adult Services.

 

A Member asked if dates were yet known for consultation exercises to take place with constituents of the County Borough, both in local communities and through avenues of Social Media.

 

The Head of Finance and S151 Officer confirmed that consultation on the MTFS was currently live, though it would officially be launched this coming Wednesday. The different elements of the consultation process would be open and transparent, and the Council would be actively seeking to obtain the views of its residents on where they feel the Budget should be spent, as opposed to where it was felt savings could be realistically achieved. The exercise would look to build upon that undertaken in recent years since this exercise had begun. He wished to point out that of all the local authorities that engaged with the public on its Budget, BCBC had the best response rate in terms of two way engagement with them.

 

The Member hoped that the ‘On-line Calculation method’ would be used again this coming year as it had previously, as this spelt out to constituents the extent of savings the Council had to make, as he felt that a large contingency of these were not aware of the level of savings that was required to be made.

 

The Head of Finance and S151 Officer confirmed to Members that the On-Line Calculation would be used once more for the up and coming Budget consultation process.

 

The Chairperson asked if there could be increased effort in this year’s Budget Consultation exercise with a view to engaging with children and young people, to include encouraging input from the Youth Council, as well as linking in more with Schools and the younger generation through local Community Groups. He asked those Members who were also School Governors, to link in with their schools and local community groups in this regard so as to expand the consultation process.

 

A Member referred to the report, and where reference was made to a report being submitted to Cabinet in July 2017, stating that in the current MTFS period it was assumed that there would be an increase of 4.2% to Council Tax in 2018-19, and 4.5% annually for each year after. He asked if this included Town/Community Council’s precept sum, to which the Head of Finance and S151 Officer replied no.

 

A Member noted that the Communities Directorate had been subject to some significant budget cuts since the recession had taken place, and he wondered whether or not there was any merit in combining this Directorate with another.

The Head of Finance and S151 Officer confirmed that this Directorate still covered a large service area, that provided a wide range of public facing services. He added that the Council overall also still had a funding allocation of £258m, though in the coming year this would be reduced by £6m. Services were still being provided by BCBC as a public body, it was just that these services had been reduced in line with the recurring budget cuts that were being imposed.

 

A Member asked how much in monetary terms the Authority would take-in in on the basis of there being a Council Tax rate of 4.2%.

 

The Head of Finance and S151 Officer that this amounted to approximately £3m.

 

A Member made an observation, that the Communities Directorate were still providing a wide range of services for the public, and he felt that these type of services could be assisted upon or even delivered by some Town and Community Councils.

 

The Chairperson advised that there were a lot of services that the Council had to provide that were costly, ie £40m in Social Services. There were also significant resources unseen by the public that the Council had to provide for, for example the costs for Looked After Children (LAC) and Out of County placements. There were over 380 LAC, and 750 plus families, who though not under our direct care, we still had to provide some funding for. There were also a number of older people being cared for in Home Care that the Council had to provide for, and if these individuals had no assets, then the Council paid wholly for the care of these persons and this amounted to £450 per person per week. These examples were financial pressures that existed year on year.

 

A Member felt that through the MTFS consultation process, the public should be made more aware of the essential services that the Council were obliged to provide such as those referred to above, that were to a degree out of the Authorities control and had a continual drain on its financial resources. They should also be made aware of areas where cuts were being proposed (as opposed to other areas) and the reasons for this.

 

The Chairperson agreed with this, adding that information sharing such as this would allow constituents to have a better understanding of how the Council had to manage its budget in these difficult times. This he added could include the amount of budget allocation aligned to each service area of each of the Council’s Directorates to include areas where savings were being proposed, and those areas that required protecting.

 

A Member felt that all welsh local authorities should as one lobby Welsh Government and also Central Government if necessary, with a view to obtaining more funding in order to more adequately provide services for the public, or if this as he suspected failed, then ask Welsh Government to be the responsible Authority for the provision of Children’s and Social Services. He added that if there were no Town/Community Councils in place to provide some level of support to local authorities, then the current situation would be worse still.

 

The Chairperson advised the First Minister had visited BCBC last Friday, and that he was questioned along the lines raised above. The Council were also a Member of the WLGA and representatives of this body met regularly with the Finance Secretary for Local Government when continued cuts local authorities were facing, were constantly the subject of debate. The financial situation was not getting any better either due to certain grant funding allocations being cut, reduced or having too many restrictions attached to them.

 

A Member pointed out to the Forum, that at a recent meeting of Council a Motion had been passed to lobby Welsh Government for extra funding to be allocated to local authorities.

 

The Chairperson concluded debate on this item, by confirming that  a Workshop would be held on 26 October next in order to consider, in its early stages, the forthcoming budget proposals 

 

RESOLVED:                That Members noted the report.