Agenda item

To receive a report from the Director of Financial & Digital Services

Through his report, the Director of Finance and Digital Services provided information in respect of the 2022/2023 Provisional Local Government Settlement, announced on the 21^st December 2021 and initial comments on its likely implications for the delivery of Council services.

The Director provided Members with the headline data from the settlement as set out at section 4 advising of an all Wales increase of 9.4% (+£437M) with this Council’s resources set to increase by 8.4% Provisional indicative settlement levels are also included for the following 2 years at 3.5% and 2.4% respectively, which points to more challenging times ahead. A number of transfers into the settlement are also set out at section 4 and a reduction in the Council’s capital funding of £2.165 m

The settlement is more positive than that modelled in the Council’s latest medium term financial plan and it is also reflective of the Council’s significantly increasing cost base and service pressures. Welsh Government have also brought the Hardship Fund to an end which reimburses local government for costs and income losses as a direct result of the pandemic. The projection for the level of support for this year from the fund is £30m, some of which will be key financial risks to be managed into next financial year and beyond.

The increased budget requirements are set out which includes funding to cover increases in a number of areas such as to employer NI contributions linked to the UK Govt Health & SC Levy, payment of the Foundation Living Wage to social care providers across RCT which has increased from £9.50 to £9.90 per hour, additional costs associated with the ALNET ACT, council wide inflationary and supply chain pressures including employee costs, ongoing pandemic related costs e.g waste services and specialist placement costs within social care, all of which are set out at table 2 within the report amounting to a net increased budget requirement of £11.7M for next year.

The Director advised that the combined impact of the provisional settlement and the updated base budget requirements are set out at table 3, against a budget gap of £9.2M at the medium-term financial planning stage, assuming a 4% settlement, the additional budget requirement when offset against the additional resources provided at the provisional settlement results in a remaining budget gap of £229,000.

Following his summary, the Director reported that Cabinet will consider its draft budget strategy for next year to include any efficiencies, Council Tax levels, resources for schools and other council services. The Council’s medium term financial planning arrangements will continue to be as important as ever going forward.

In conclusion, the Director advised that the final settlement is due to be released in early March and it will be for Council to agree its final proposals and Council Tax levels for next year.

Members welcomed the Provisional 2022/23 Local Government Settlement, announced by Welsh Government and following discussion the Director responded to a number of queries such as the provision of a specific grant for Free School Meals to Primary Learners agreed as part of the Plaid Corporation Agreement, £40M for 2022/23, £70m for 2023/24 and £90m for 2024/25. 

RESOLVED to:

1. Note the Provisional 2022/23 Local Government Settlement, announced

    by the Minister for Finance and Local Government on the 21^st December 2021;

2. Note that the Final 2022/23 Local Government Settlement is expected during

    early March 2022; and

3. Note the approach to budget consultation for 2022/23 as already determined.

(Note: County Borough Councillor L Walker declared the following personal interest– “I declare an interest in that I am a member of Llantwit Fardre Community Council”