Agenda item

To provide Members with information in respect of the 2024/2025 Provisional Local Government Settlement.

The Deputy Chief Executive & Group Director - Finance, Digital And Frontline Services provided Members with information in respect of the 2024/25 Provisional Local Government Settlement, and initial comments on its likely implications for the delivery of Council services.

Ø  Members were advised of the “headlines” of the Provisional 2024/25 Settlement which were set out in the report as:

Ø  The overall increase in Revenue Support Grant (RSG) and Non-Domestic Rates (NDR) funding for 2024/25 (of unhypothecated funding) at an all Wales level, after adjusting for transfers is 3.1% (+£169.8M).

Ø  The settlement for Rhondda Cynon Taf, amounts to an increase of 2.8% which is below the average all Wales increase. Settlement figures across Wales range from 2.0% to 4.7%.

Ø  A funding ‘floor’ protection has been included for 2024/25 so that no Council receives a settlement below 2.0%.

Ø  There are no transfers into / out of the Settlement for 2024/25.

Ø  The Settlement provides no indication of future year settlement levels.

Ø  Provisional figures and indicative estimates for 2024/25 are also included for specific grants, at an all Wales level. The Social Care Workforce Grant will reduce from £45M to £35M (all Wales level), a reduction of £0.815M for this Council. This funds our core base budget.

Ø  The Council’s General Capital Funding allocation is reduced by £0.086M  to £13.800M

The Deputy Chief Executive & Group Director - Finance, Digital And Frontline Services commented that the combined effects of the means the Council has a budget gap of £36.654m which in preparing for the settlement officers have agreed to budget reduction measures in the region of £10.74m leaving a remaining budget gap of £25.911m. Members were informed that it will now be for the Cabinet to consider the implications of the above scenario in the preparation of its draft budget strategy. As part of this, consideration will be given to the outcome of the first phase of the budget consultation process

In summing up The Deputy Chief Executive & Group Director - Finance, Digital and Frontline Services concluded that Council Reserves ensure the long term sustainability and are set aside for specific purposes and financial risks. He continued that the Council has an excellent record of using these sensibly and proportionately and should not be used to deal with underlying base budget revenue issues.

The Leader thanked officers for the comprehensive report. He commented that the forthcoming year will be extremely challenging and will continue to be challenging year on year as the council faces ongoing pressures. He continued that no officer or Member wants to cut or reduce services knowing that our communities need investment but with the Local Government settlement at 2.8% tough decisions need to be taken to set a balanced budget. The Leader commented that whilst the Council will need to use reserves to close the budget gap, it is important that they are carefully considered before a decision on their use is taken as these are used year on year for long lasting investment into our Capital Programme. The Leader made clear, that while the reserves are classified as usable, the Council still has commitments in the Capital Programme such as building Extra Care facilities, new Special Schools, purchasing properties for Children’s Care Homes and Infrastructure Projects which are all itemised in the Councils published accounts.

The Cabinet Member for Climate Change and Corporate Services thanked officers for the robust report and commented that the Council will continue to invest in communities for our resident’s future.

The Leader of the Opposition asked what the levies Council’s pay for the South Wales Fire and Rescue cover. Since the independent report published on the 3rd January which was commissioned at the request of the Deputy Minister for Social Partnership and by the Chair of the South Wales Fire and Rescue Authority which relates to the failure in office management and would be unfair to expect Councillors to be aware of every failure in management practice but the LA is nonetheless the employer and statutory body.  She asked if the levy this year will include the cost of the review and how much the review cost the public purse and if the costs of the review will be clawed back.

The Deputy Chief Executive & Group Director - Finance, Digital And Frontline Services replied that he was not in a position to confirm what the levy would seek to recover which are matters for the Fire Authority and the Council has been consulted on a level of levy for the forthcoming year which enables the Fire Service to set a legal budget.

Another Member sought clarity on what the proposed increase of 3.9% meant in real terms for the average Band D property and if any of the costs identified are negated by the higher premiums that the Council are set to receive from Long Term Empty Properties and second home ownership.

The Deputy Chief Executive & Group Director - Finance, Digital And Frontline Services confirmed that the additional premiums from second homes and long term empty properties had been factored into the figures. He also confirmed that the Band D property currently pays £1614 per annum with a proposed increase of 3.9%, this equates to £1.20 per week.

Another Member referred to the Budget Strategy which lists perimeters for setting the Budget and asked when the list was drawn up and agreed and if the perimeters are the same as those used for 23/24, and is it known if the public agree to the use of the perimeters. The Member also referred to the efficiency savings that had been delivered early and asked what those referred to

The Deputy Chief Executive & Group Director - Finance, Digital And Frontline Services replied that the perimeters are the same used as in previous years and are included in Budget Strategy Reports that are used for Public Consultations. He also confirmed that the early efficiency savings were set out in the Cabinet report in November 2023

Another Member commented on other reports of other Council’s throughout the UK facing financial difficulties and stated that he was confident that RCTCBC’s Leader and Officers will put the residents of RCT first. He asked that the Leader reach out to Town and Community Council’s and ask them to help with Services. He commented in his capacity of the Leader of Pontyclun Town Council that they are all there to help and support and all want to put residents first. He stated that they would like to work together to explore any possibilities that the Community Councils can take on services that the Council are having to cut.

The Leader welcomed the comments and advised that he will take up the offer to meet with them.

The Leader of the RCT Independent Group asked how many long term empty properties are in RCT compared to recent years and also asked if the recent new rollout of the 20mph speed limit was funded in part by the Council.

The Deputy Chief Executive & Group Director - Finance, Digital And Frontline Services advised that the Council has committed to take a review at end of first year of rollout of the Long Term Empty Properties so this will take place at the end of this financial year. He also confirmed that the 20mph rollout was fully funded by Welsh Government

Following consideration and conclusion of the report it was RESOLVED to:

1.     Note the Provisional 2024/25 Local Government Settlement, announced by the Minister for Finance and Local Government on the 20th December 2023;

2.     Note that the Final 2024/25 Local Government Settlement is expected during early March 2024; and

3.     Note the approach to budget consultation for 2024/25 as already determined.