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The Director of Finance & Digital
Services presented a verbal update in respect of the
provisional Local Government Settlement 2023/24 (following
publication by the Welsh Government on the 14th December
2022) with the aid of a Power Point presentation under the
following headings:
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Medium Term Financial Plan and Review of Budget
Requirement
Ø
Provisional Local Government Settlement
2023/24
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Resources available at Provisional
Settlement
Ø
Revised Budget Gap at Provisional
Settlement
Ø
Budget Strategy Considerations/Building
Blocks
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Outline Draft Timetable
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Conclusion
The Director reminded Members that at
the meeting of Full Council held on the 28th September 2022 and
through the Medium-Term Financial Plan, details of the
council’s financial gap were confirmed as £36.475m. At
that time the Director indicated that the Council was assuming a
3.5% settlement from Welsh Government which was in line with the
indicative settlement that Welsh Government provided to Council
alongside its current year’s budget settlement.
The Director advised that the budget requirement
has been continually reviewed but a number of further updates have
led to a net increase in the Council’s budget requirement.
The updates include provisional notification that the South Wales
Fire Service levy will increase by 8.07% for RCT (an additional
£530,000 budget requirement), a reassessment of base budget
requirements for special school numbers, capital charges,
Additional Learning Needs (ALN) funding, demand led social care and
revised estimated insurance requirements and additional
£1.454m budget requirements.
The Director advised that the Council has also
incorporated the cost of the real living wage increase to
£10.90, following the real living wage foundation
announcement, with the commitment to provide the care sector with
the real living wage at a cost to the council of £3.6m. The
Council has also reflected on its pay award assumptions and has
updated to reflect the pension revaluation (net increase of
£6.76m). The Council’s energy costs will also see a
significant rise from £6m to approximately £20m for the
next financial year (further budget requirement of £7m). The
Director confirmed that the net impact of these updates to its
budget requirements will increase the budget gap from £36m to
£52m.
The Director provided the headlines
from the Provisional Local Government Settlement, namely
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An all-Wales average increase in
Resources of 7.9%
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An increase for RCT of 6.6% (as
compared to the indicative 3.5% provided alongside current year
settlement)
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Range of settlement levels 6.5% to
9.3%
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Indicative increase for 2024/25 at 3.1%
(all Wales)
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Capital Funding – Increase
£30M all Wales as announced last year (+£2.287M for RCT
following £2.165M reduction this year)
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Specific Grants of £1.3bn Revenue
and £925M Capital (all Wales level only)
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Additional Funding of £13.89m was
now available to the Council.
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The final settlement expected in early
March 2023.
The combined impact of the provisional
settlement and the updates to the council’s base budget
requirements meant a revised budget gap of £38.3m.
In order to provide some context, the
Director of Finance & Digital Services compared the figures
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