The Interim Section 151 Officer submitted a report, the purpose of which, was to present Cabinet with the draft Medium Term Financial Strategy 2019-20 to 2011-23, which sets out the spending priorities of the Council, key investment objectives and budget areas targeted for necessary savings. The Strategy also included a financial forecast for 2019-2023, and a detailed draft Revenue Budget for 2019-20.

She introduced her submission, by advising that the MTFS had been guided by the Council’s three priorities as contained in its Corporate Plan.

The next sections of the report contained a budget narrative, which aimed to articulate the continued and significant investment in public services that the Council will make. It also set out how the Council aims to change particular areas of service delivery and the financial consequences of this.

The report then gave a financial overview, following which the Interim Section 151 Officer gave a resume of how much budget is allocated to each of its key service areas of follows:-

·         Education

·         Social Care and Early Help

·         Public Realm

·         Supporting the Economy

·         Other Services

The Interim Section 151 Officer confirmed that the Council’s MTFS was set within the context of UK economic and public expenditure plans, Welsh Government’s priorities and legislative programme.

She explained about the Welsh Government’s draft budget announced by the Finance Secretary on 2 October 2018, and how this affected local authorities in Wales including BCBC. Since then Central Government in its Autumn budget on 29 October, which confirmed that Welsh Government will receive an £550m over the years 2018-19 to 2020-21.

The next section of the report, advised what the above settlements meant for this Authority, which reflected for 2019-20 an overall reduction of £1.616m or -0.84%. Welsh Government also indicated that the settlement contained an additional £20m to ease pressures on Social Services. If this was also taken into account, the real position for Bridgend was a reduction of -1.3% or £2.5m. The settlement also included £2.5m floor funding to ensure that no Authority has to manage with a reduction of greater than 1% to its Revenue Support Grant next year.

Overall the provisional settlement was in line with the -1.5% “most likely” assumption that is contained within the Council’s original MTFS 2019-20, but it did not recognise a number of new pressures that the Council will have to meet.

The next section of the report outlined reasons why there was a need to combat financial pressures the Council have to face in the coming year, by having to consider an increase of 5.4% in Council Tax.

Paragraph 4.11 of the report then showed in Table 1, a comparison of budget against projected outturn at 30 September 2019, that reflected a net underspend of 2,551m.

Table 2 in paragraph 4.17 of the report, showed detail of an MTFS proposal supported by Budget Reductions Contingency Reserve in 2018-19, which was in the sum of £200k for MREC.

The report then gave an outline of the MTFS forecast for the next 4 years showing that the Council would still be likely to achieve a budget reduction overall in each of these years of around -1.5%. This in real terms meant that over this period it would have to find a total of £33,645m on a ‘best case scenario’ or £44,648 on a ‘worse case.’

Table 5 of the report reflected the current position in addressing the most likely forecast budget reduction requirement of £36,439m. This showed that despite savings made thus far, the Council were still required to develop proposals in order to achieve a further £21.3m in reductions (not yet accounted for).

The Interim Section 151 Officer then made reference to the Budget Reduction Proposals identified in the current MTFS (Table 6 in the report) and the Draft Revenue Budget as it presently stood (Table 7).

A full breakdown of budget pressures was shown in Appendix A to the report.

She confirmed that budget reduction proposals of £8,836m had been identified from service and corporate budgets to achieve a balanced budget. These were outlined in Appendix B to the report.

Table 9 in paragraph 4.39 of the report gave a summary of Usable Earmarked Reserves, whilst Table 10 showed Annual Allocations of Capital Funding.

The Interim Section 151 Officer then concluded her submission by referring to the Well-Being of Future Generations (Wales) Act 2015 Assessment as were detailed in Appendix c to the report.

The Deputy Leader advised that the draft budget featured £115m for Education and Family Support, plus capital investment of £21.5m for Band A and £23m for Band B of its school modernisation programme.

It anticipated spending £67m on Social Care and Wellbeing services, and £23.5m on Public Realm services including £9m on the collection and disposal of waste.

The proposals included a suggested Council Tax increase of 5.4%, which is the equivalent of an extra £1.45 a week for an average Band D property.

Setting a multi-million pound budget was never easy the Deputy Leader added, but this was especially the case under the current financial climate where the Council had been forced to cover huge shortfalls in funding.

He proceeded by confirming that the suggested Council tax increase reflected the need to mitigate against unfunded and unavoidable pressures, but it in no way covered the entire cost of this.

As well as reductions in the amount of funding the Authority received, it faced additional pressures such as new regulations and legislative changes, increased pupil numbers, increased dependency upon Council services from an ageing population, and more.

He added that whilst the local authorities awaited the results of the public consultation, the Council was sharing the draft proposals in order that the scrutiny process could get underway.

The Deputy Leader advised that he was looking forward to receiving the public consultation feedback at the next meeting of Cabinet, so Members could consider proposals in context, prior to moving on to the next stage of proceedings.

He concluded his submission by confirming that future years would be very challenging with savings required of between £30 - £40m. The report indicates that in future years and in order to protect vital services that the Council have to provide to its 140,000 residents, Council Tax may have to increase to 10% in future years to fill the financial void the Council is yet to face.

Cabinet Members in turn, echoed the sentiments of the Deputy Leader.

The Leader concluded debate on this item, by urging the public that there was still time for them to write in with their proposals on the MTFS moving forward. He added that Cabinet were working closely with Overview and Scrutiny, in order to make the best of the settlement. He hoped that there would be added funding from Welsh Government via Central Government, in order that the Authority could be financially supplemented, as every little helped in this regard.

RESOLVED:                    That Cabinet submitted for consultation the 2019-20 annual budget and development of the MTFS 2019-20 to 2022-23.