Agenda item

Context:

To highlight the context within which the Medium Term Financial Plan (MTFP) will be developed for 2018/19 to 2021/22.

To agree the assumptions to be used to update the MTFP, and provide an early indication of the level of budget savings still to be found.

To update Members with the implications arising out of the provisional settlement announcement of Welsh Government.

To consider the 2018/19 budget within the context of the 4 year Medium Term Financial Plan (MTFP) to be incorporated within the emergent Corporate Plan

To provide detailed draft proposals on the budget savings required to meet the gap between available resources and need to spend in 2018/19, for consultation purposes.

Key Issues:

Members will know that we have faced and will continue to face significant financial challenges. Over the last four years, the Council has had to manage £19.1 million of savings from its service budgets, whilst additionally also taking advantage of the cashflow savings effect of revising its capital finance arrangements of circa £3.3million. Funding from Welsh Government has reduced over the period and austerity looks set to continue for the foreseeable future. At the same time pressures on the budget have been increasing

in terms of demographic growth, demand and expectations in children’s services, contract price inflation and redundancy costs.

Whilst setting the budget annually within the context of a MTFP, the development of multiyear budget proposals has been a challenge. An ongoing forecast resource gap is being predicted however with the absence of future year’s indicative settlements from Welsh government, planning for the future is challenging.

The Future Monmouthshire work programme recognizes that the challenges faced by the County and Council are not limited to financial pressures, but these should be seen in the round with other significant challenges. Taking a holistic approach to this work will ensure that the needs of our communities that we serve are put first within the financial constraints that we operate.

The year end position for 2016/17 and the current year monitoring continues to demonstrate the tightening of our financial position. The reports also assess the delivery of the savings we have previously identified. Overall the outturn position for 2016/17 delivered a small surplus, and meant that there was a minor opportunity to replenish some of our reserves.

A review of the earmarked reserves position was undertaken in June 2016 and agreed by Cabinet on 6th July 2016. The report highlighted that as reserves have been used extensively and there is less opportunity to replenish reserve balances as budgets get tighter, ear marked reserves need to work harder to help the Authority through the financial challenges and risks it faces. Reserves should not be used to plug the funding gap and fund on going expenditure, they are needed to help with one off costs to invest and transform services so that they can operate within a reduced financial envelop. Having clearer protocols and responsibility assigned can help to ensure the return from the use of reserves in the future is maximised.

Member Scrutiny:

It was asked if we offer advice to local community councils when setting their precept.

The fact that town and community councils are not capped was raised as an issue by a Member.

A Member voiced frustrations that public perception is that Monmouthshire County Council is ‘rolling in money’ and asked that figures and examples are readily available to members of the public to raise awareness.

A Member said that local councils could and should take on more responsibilities.

The Cabinet Member for Resources joined the meeting at this point to speak on the budget setting and advised there will be a joint select committee meeting to allow scrutiny.