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Agenda item
Draft Budget Proposals for 2022/23.
Minutes:
The Cabinet Member for Performance, Economy and
Enterprise presented the report, which provided details
of the Draft Budget Proposals for the 2022/23 financial year and had been
considered at a special meeting of Cabinet on 19th January 2022.
Members were
advised that the 8.5% uplift in the Provisional Financial Settlement, along
with the proposed 2.5% increase in Council Tax meant there would be no new
savings required for the 2022/23 financial year. Although the significant increase in the
Provisional Financial Settlement is very welcome during these challenging
times, Members were asked to note that circa £17.3m of the increase will be
needed to fund inescapable inflationary pressures. However, this increased
uplift, combined with the proposed Council Tax increase of 2.5%, will provide
circa £10m available for investment in key service areas as the Authority
recovers from the Covid-19 pandemic.
Key areas of investment in Council services include £6.2m for Social
Services to meet the commitment to pay the Real Living Wage for care workers,
addressing increases in demand in both Adult and Children’s Services, and to
provide funding to assist with additional costs that may continue to arise as a
consequence of the ongoing pandemic.
The Draft Budget Proposals will ensure the protection of budgets for
schools and provide £250k to support a new apprenticeship scheme across the
Council. Significant investment is also
proposed in Public Protection Services to increase capacity in key teams such
as Trading Standards, Enforcement and Environmental Health. There will also be additional investment in
the Community Safety Wardens Service, Flood Prevention Team, and in the
Business Enterprise and Renewal Team to lever in external funding and to
promote the development of town centres.
Members were advised that the proposed Council Tax increase of 2.5% for
2022/23 is well below inflation and is the lowest increase for a number of
years. This will increase Caerphilly’s
Band D precept from £1,230.57 to £1,261.33, which equate to an annual increase
of £30.76 or weekly increase of £0.59.
The Scrutiny
Committee were reminded that Welsh Government has provided substantial grant
funding to Local Authorities in both the 2020/21 and 2021/22 financial years
through the Covid-19 Hardship Fund to meet additional costs and income losses
arising from the pandemic. The Hardship
Fund will cease on 31st March 2022 and Local Authorities will be required to
meet ongoing financial pressures linked to the pandemic from the funding
provided in the Provisional Financial Settlement. Due to the ongoing financial uncertainty
linked to the pandemic, it is proposed to top up the Council’s Covid-19
Earmarked Reserve to £5m by transferring uncommitted balances on other
previously approved reserves.
Members were
advised that as we exit the pandemic, the financial challenges faced by local
authorities are unknown and Caerphilly Council must ensure that they are well
placed to deal with these challenges as they arise. Members were referred to the updated Medium
Term Financial Plan (MTFP) as set out in the report that shows a potential
savings requirement of £9.753m for the two-year period 2023/24 to 2024/25. Detailed work will be undertaken in the
coming months to further refine the MTFP and the Council’s Transformation
Programme and associated Corporate Reviews will be key components in addressing
the projected financial gap.
The Joint
Scrutiny Committee were asked to consider and comment on the draft budget
proposals, prior to Final Budget Proposals being presented to Cabinet and
Council in February 2022, and questions were invited for the Cabinet Member and
Officers.
A number of
Members voiced their support for the proposals and welcomed the proposed
budget. They were particularly pleased
to note the lack of cuts to Council services for 2022/23 and investment in key
services, particularly after many years of austerity measures. They were also pleased to see the protection
of the Education budget, investment in the Apprenticeship Scheme and Business
and Enterprise Renewal Team, and proposals to invest in the Community Safety
Team to create additional resources.
Other Members also emphasised the importance of protecting the budget and
delivering a balanced budget.
Mr Steve Harris (Head of Financial
Services and S151 Officer) responded to a Member’s queries around the purpose
of the balances held in reserves and the rationale for the proposed Covid
reserve top-up. It was noted that an Update on Reserves is prepared annually and
presented to the Policy and Resources Scrutiny Committee in February 2022,
which sets out details of all the balances that are currently earmarked
and the reasons why these are held in
reserve. He explained that the proposed
top-up of the Covid reserve will utilise balances which have been identified as
uncommitted in other area, with 2.5 million presently uncommitted, which
is why it is recommended that these be used to top up the COVID reserve.
Mr Harris also provided clarification on the Revenue Support Grant (RSG)
and Redistributed Non-Domestic Rates (business rates) used by WG to calculate
the Financial Settlement and how this is redistributed amongst local
authorities. Later in the meeting, Mr
Harris also responded to queries from the Member around the funding received
from WG in relation to Covid-19, and provided clarification around the WG
Hardship Fund and the Covid-19 Earmarked Reserve that had been established to
meet any additional costs that may not have been funded through this Hardship
Fund.
The Scrutiny Committee discussed the proposed increase in Council Tax
and queries were received around the number of households benefiting from the
Council Tax Reduction Scheme. It was
confirmed that 16,300 households receive a reduction and of these, 20% receive
a 100% reduction, which equates to 9034 households across the county borough. Officers provided clarification on the Band D
rate compared with other authorities across Wales and it was also confirmed
that Caerphilly Council is ranked second lowest in the
list of Council Tax rates across Wales at this present time. A Member asked if the Authority had
considered alternative levels of Council Tax increase when preparing the draft
budget, ranging from zero increase to an increase greater than 2.5%. The Cabinet Member for Performance, Economy
and Enterprise confirmed that the Authority had looked at both lower and higher
increases but had proposed an increase of 2.5% in order to facilitate the £10m
investment in essential services
One Member stated that the proposed 2.5% increase in Council Tax within the draft proposals was causing
confusion from some residents who believe this increase to be set in
stone. The Cabinet Member gave
assurances that nothing has been pre-determined and that all consultation
responses from the public on the Draft Budget Proposals, including the proposed
Council Tax increase, will be taken on board in the preparation of the Final
Budget Proposals to be presented to Cabinet and Council. However, she emphasised that if the Council
were to significantly deviate from the proposed level of increase, savings
would be needed elsewhere in order to deliver a balanced budget for 2022/23.
Members discussed
the proposed level of investment in staffing and the costs attached to
particular posts relating to a new Senior
Relationship Manager post and additional capacity in the FOI Team. Officers explained that these costs include
salary on-costs and that further details of the Senior Relationship Manager
role will be reported back to Members once the job description and salary are
confirmed. Clarification was provided on
the rationale for the Senior Relationship Manager post and it was also noted that
the two new Freedom of Information Officer posts will help to improve and
exceed targets around FOI requests. In
response to a further query on the need for a Senior Relationship Manager, it
was explained that the Authority are looking to recruit to the post to act as a
strategic conduit across the Council’s service areas, establish a direction of
travel, and build relationships across separate management teams.
During
the course of the meeting, Mrs Lianne Dallimore (UNISON) was invited to deliver
the Trade Union position on the Draft Budget Proposals. Mrs Dallimore stated that overall the
proposals were very positive and better than anticipated, particularly after 12
years of budget cuts and austerity.
However, she emphasised the increasing financial pressures already faced
by residents as a result of inflation and increasing costs, and asked the
Committee to bear these in mind. Mrs
Dallimore also made reference to those Council employees working from home and
highlighted the costs around working from home in terms of increased lighting, heating and a general increase in
energy costs. She therefore asked the
Council, as part of its budget proposals, to consider offering a home working
allowance to these staff, and expressed the need for the Council to address
this cost in order to sustain an agile workforce.
Mrs
Dallimore thanked Mr Steve Harris, finance staff and Heads of Service for their
work in preparing the report. She also
made a request for trade unions to be consulted
earlier in the process moving forward, and for them to have sight of the
proposals before they are made public.
The Leader of
Council thanked Mrs Dallimore for her comments around the budget and made
reference to the Council’s proposed investment in key roles. In regards to the comments made around agile
working, the Leader placed on record her reassurance that no member of staff
should suffer financial detriment when working from home. She confirmed that the Council would meet
with the Trade Unions to discuss the issues that arise from working from home
and address the financial pressures that staff are facing.
A Member sought
clarification on the reason for the proposed growth of £6.166m for Social
Services being held corporately in the first instance, rather than being
released directly into the Social Services budget. Officers explained that the Council needs to carry
out some work around the Real Living Wage and passport that funding through to
independent sector providers. This will
be a detailed piece of work and the Council will need to work with a large
number of providers on this matter. Once
the work is completed and the Council have the evidence base to pass this
funding on, the funding will then be released into the Social Services
budget. In addition, there are
underlying increases in demand across both Adult Services and Children’s
Services, and so the Council want to firstly gain a better understanding of
this as they move into the next financial year in order to establish the impact
on the Social Services budget.
It was also
explained that the issues around the Real Living Wage are particularly complex,
and although the Hardship Fund was used to meet some of these costs, this
funding is now at an end and the costs may have to come from the WG Financial
Settlement instead. Colleagues across
Social Services and Finance are working together to gain a better understanding
of these costs and once the position is better established, the funding will be
called down from the corporate balances into the Social Services core
budget. In response to a query around
whether any underspend across the proposed growth would be reported rather than
be assimilated into the corporate budget, Officers confirmed that if there is
any surplus funding once the Real Living Wage exercise has been completed, then
this will be made available for investment in other service areas. They added that an update on the Real Living
Wage position would also be reported when the report on the updated Medium Term
Financial Plan (MTFP) is reported to Cabinet at the mid-year point.
A
Member sought clarification regarding the £235k investment in flood prevention
scheme development and implementation.
Officers confirmed that this will consist of general investment in staff
resources in order to increase capacity across the department, with it noted
that the Drainage Team is currently under-resourced and so this will be used to
strengthen capacity and enable the Council to push more schemes forward.
Clarification
was sought on the reasons for the APT&C pay award for 2021/22 not yet being
finalised. Officers explained that it is
currently assumed that the 2021/22 pay award will be 1.75% with a further
increase of 3% from April 2022. The 3% uplift will be held corporately in the
first instance and released to school budgets once the actual pay award has
been determined. However, this is a
national issue and trade unions are currently out to ballot on the pay award,
so a decision has not yet been made and will come very late in the day before
negotiations begin on the next round of the pay award for 2022/23. It was also confirmed that any pay award to
staff would be backdated.
Queries
were received on a number of individual items in the report, including National
Insurance contributions, the 4% uplift in non-pay inflation, free school meals
costs, and costs listed across Miscellaneous Finance. Officers provided clarification on each of
these items in turn. In response to a
Member’s query around the publicization of the consultation on social media, it
was confirmed that a link to the draft budget consultation had been posted on
social media channels in order for residents to click on the link and respond
to the consultation.
A
Member sought further detail on the investment for the establishment of the new
apprenticeship opportunities across the Council. Officers highlighted the value of
apprenticeships to the organisation and it was noted under previous schemes,
many apprentices have gone on to be successfully employed into full-time
Officer posts. It was explained that the
£250k investment will recur on a yearly basis, which will have huge benefits
for the Council regarding future recruitment of staff, and that there will be
opportunities for apprenticeships across the whole of the organisation. It was confirmed that a list of potential
service areas offering apprenticeships would be circulated to Members following
the meeting.
Mrs
Christina Harrhy (Chief Executive) addressed the Joint Scrutiny Committee, and
in referring to comments made by Members on the investment in Officer posts, sought
to provide context around the rationale and background to these particular
budget proposals. It was emphasised to
Members that since 2019/20, the Council has seen a reduction of 237 members of
staff which means that the Authority has been delivering more work with less
resources over a significant period of time.
However, this position is unsustainable in the long term, and in taking
into account the concerns of Elected Members and Trade Unions, and in order to
continue with the current pace and take the organisation from a good to
excellent level, the Council has proposed these much-needed resources and
investment in staff in order to sustain service delivery across all areas.
The Leader of Council reminded all Members
that these budget proposals were currently at the draft stage, emphasised the
importance of consultation and gathering views in preparing final budget
proposals, and gave assurances that all comments around the draft proposals
will be taken on board. The Leader also
highlighted the importance of the investments being proposed at this time,
together with the need to ensure finance resilience in future years, in order
to develop the Council and deliver the best possible services for residents of
the county borough.
The Chair thanked Members and Officers for their
contributions and confirmed that the comments of the Joint Scrutiny Committee
would be reported to Cabinet and Council as part of the consultation process and
be included in the Final Budget Proposals report being presented to Cabinet and
Council in February 2022.
Members
placed on record their thanks to Mr Steve Harris and to all staff involved for
their hard work in the preparation of the detailed report.
The
meeting closed at 6.14 p.m.
Supporting documents:
- Draft Budget Proposals for 2022/23., item 4. PDF 187 KB
- Appendix, item 4. PDF 339 KB
- Appendix - Appendix 1, item 4. PDF 89 KB
- Appendix - Appendix 2, item 4. PDF 17 KB