Agenda item

Budget Scrutiny: Scrutiny of the budget proposals for 2021/22.

Please use this link to access the papers for this item - available as part of the

20th January 2021 Cabinet agenda.



Jonathan Davies and Dave Loder delivered the presentation and answered the members’ questions, with Frances O’Brien.


Given the previous discussion about pay freezes and service delivery, and pressures next year, is it realistic to say that we are going to continue delivering our full suite of services?

That’s a valid question because we are going to have to consider if some of the services will be sustainable long-term, or whether they can be delivered in a different way. We will need to continue reviewing them over the medium-term financial plan and strategy. We’ve been very fortunate not to have to significantly close or change any services, but we have to continually monitor the situation and prioritise, in terms of what non-statutory services are there that we would look to adapt and change. Those are very difficult considerations to make. 

One of the cost pressures not budgeted for is MonLife investment considerations. Can we have more detail on this?

We don’t have detailed information for this meeting. The team is considering whether to postpone some of those investments for the immediate future while we understand what the Covid recovery situation is. The presentation slide was in relation to the capital commitments going forward, and those pressures and investments sitting outside the current budget. There’s a list of potential MonLife investments that they would seek to make over the medium term, which is available in the pack of papers that went to Cabinet and is linked on today’s agenda.

The Welsh Government settlement has been more generous than ever this year. What are the reasons for this? Are there lessons to learn from other councils?

The settlement itself is made up of quite a complicated calculation around many factors, of which some have higher impacts than others. A couple of the indicators where we’ve benefitted this time are concerning population and ‘equalisation of resources’: this looks at the ability of authorities to raise their funding from council tax, and applies a ratio to adjust for that across Welsh authorities. It is very difficult to explain. Welsh Government are working now to make that indicator a lot clearer for authorities. It’s been a big factor this time; the reasons for that are probably statistical, and we don’t understand the full picture of that yet.

Does our input affect the amount that we get?

The inputs are set at a statutory level so the returns we make, in terms of those statistical returns to Welsh Government, go towards producing that data for them to put into their model. We don’t have the ability to change those but there are varying amounts of what goes in: pupil numbers, population estimates, benefits data, and the demands on our services and populations that we give information back on. We therefore have very limited scope to change or influence those factors – it is very much reliant on those statutory indicators that we have to report back.

What have the discussions been around medium-term plan and deficit recovery? What are our expectations?

It’s a very difficult picture to play through in relation to the medium term. We’re continuing to focus on the areas that we can control, and look to influence Welsh Government to give more clarity on the position going forward. When we have a one-year settlement there is very limited scope to plan past the end of 2021-22. We will always aim to maintain and sustain services – we don’t want services to fall away. Many of them are going to transform and develop as we recover from the pandemic e.g. how town centres look, how residents travel, working from home, etc. Various working groups have been established to look at these things. The key point is to put pressure at a political level back on Welsh Government to provide clarity over how our funding will come through in the longer-term settlement.

Has our Section 151 Officer (Peter Davies) raised any concerns about the drawdown of reserves?

Our officer has had to consider that as we develop these proposals. A lot of the reserves and council fund balances are limited. We have benefitted from the 2019-20 outturn position – we were able to bolster the council fund by £1.8m. This gave us some flexibility to deal with the Covid and non-Covid pressures coming in the current financial year. It’s important to note that even though that was increased by £1.8m it still brought us to a middling level on the council fund reserve, compared to across the Welsh authorities. We’re proposing to use £750k from that council fund, which is very much a one-off use. When we say it’s not sustainable to maintain that, if we use it and we don’t then top up that reserve at year-end, it’s a continual cycle in the reduction in those balances, and gives us limited opportunities to support the budget when our only other viable options of funding those priorities are council tax and Welsh Government settlement. Per head, we are still right at the bottom of that funding.

Chair’s Summary:

We have covered the impact on income, which has had a significant income on budget planning. The various levels of uncertainty in relation to central government is a challenge for us to map out what the next few years will look like, financially. There are no particular recommendations but we can give overall feedback, as a committee. Cabinet Member Phil Murphy will pick up the points and questions raised by members today.


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