To consider a report by County Councillor Aled Davies, Portfolio Holder for Finance, Countryside and Transport. Comments from the Finance Scrutiny Panel will follow.
Minutes:
Cabinet considered the budget for 2019 - 2020, the medium term financial strategy for 2019 – 2024 and the capital programme for 2019 – 2024 (copy filed with the signed minutes).
The Portfolio Holder for Finance advised that the budget attempted to protect the services valued by residents and prioritised the council’s Vision 2025. It maintained the funding for developing key priorities within Vision 2025 such as the mid-Wales Growth Deal, building 250 extra homes and using the council’s spend to support county businesses with greater use of the Powys pound. An additional £1m would be passed on to schools delegated budgets and the budget also protected the investment made in Children’s and Adults services. It was recognised that the council of the past was no longer affordable and significant changes were being made by transformational changes to the council’s operating model. The budget did not rely on reserves or one-off sources of funding. The level of reserves was assessed as being at an acceptable level and in line with the Council’s policy of maintaining a 3% minimum general fund reserves. The Portfolio Holder for Finance referred to the CIPFA independent assessment which found that the council had appropriate procedures in place to set a robust budget but which had noted risks, particularly the achievement of savings.
County Councillor John Morris presented the findings of the Finance Scrutiny Panel. The Panel viewed the proposed budget as the highest risk they had looked at and had concerns over its deliverability. The Panel was concerned that the role of the Improvement and Assurance Board and its focus on social care had led to enormous budget pressures on other services. The Panel considered that a lack of pace of transformation was a risk and that not enough use had been made of capital receipts to fund transformation. The Panel welcomed the new schools funding formula but regarded schools deficits as a major risk and questioned whether the current mix of schools was affordable.
In response, Cabinet was advised that a small number of schools was skewing the overall position. The Portfolio Holder for Learning and Welsh Language did not regard the new funding formula as a replacement for transformation. It was acknowledged that there were significant risks in the budget but all Welsh councils were facing similar challenges. An additional £2.5m was being put into reserves to meet potential challenges next year. There were tight rules on the use of capital receipts which could only be used for existing budgets. Transformation had started and the Council would be significantly smaller as a result.
RECOMMENDED to Council |
Reason for Recommendation: |
1. That the Medium Term Financial Strategy for 2019 to 2024 as set out in Appendix 1 to the report be agreed in principle. |
To aid business planning and development of the budget over a three year period |
2. That the proposed Revenue Budget for 2019/20 shown in the Financial Resource Model in Appendix 2 is accepted and recommended to full Council on the 21st February 2019. |
Statutory Requirement |
3. That the Fees and Charges proposed within the Fees and Charges Register are accepted and recommended to Full Council on the 21st February 2019. (Appendix 4 and 5) |
To comply with Powys County Council Income Policy |
4. The proposed Capital Strategy for 2019/20 shown in Appendix 6 including the revised Capital Receipts Policy is accepted and recommended to Full Council on 21st February 2019. |
Statutory Requirement |
5. That a Council Tax increase of 9.5% is included in the budget that goes to full council on the 21st February 2019. |
There is a Statutory Requirement to set Council Tax but the level is a matter for local determination. |
6. The authorised borrowing limit for 2019/20 as required under section 3(1) of the Local Government Act 2003 be approved at £497m as set out in section 11.6 of the report. |
Statutory Requirement |
7. The Prudential Indicators for 2019/20 are approved as set out in section 10 of the report and Appendix 7. |
Statutory Requirement |
Supporting documents: