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Have your say

We need your help to set our Budget for 2020-21

We need your help to set our Budget for 2020-21     

 

SO WHAT’S BEEN GOING ON WITH COUNCIL BUDGETS?

 Over the past six years, all Councils across Wales have had to make substantial cost reductions and efficiency savings in order to balance their budgets. The following have all contributed to sizeable annual funding gaps (the difference between Councils funding and the amount of money Councils need to spend on providing existing levels of service). This has been because of:

Reductions in government grants. There have been substantial cuts (or cuts in real terms) to the amount of grant that Councils in Wales receive from Welsh Government 

Increases in workforce costs. There have been increases in national minimum and living wages, and significant increases in pay awards and employers contributions to pensions

Increases in non-workforce costs. Inflation had peaked about the Bank of England’s target rate of 2% (although it is now under). This means that costs for things like fuel and utilities have been going up. Those who operate contracts on behalf of Councils have also been putting prices up

An increase in the number of people needing help. The number of older people in the population is increasing, which is increasing demand on our adult social services

Pembrokeshire County Council’s budget has been further squeezed because:

For many years Pembrokeshire has had the lowest Council Tax (Band D) in Wales and continues to do so. When calculating the amount of grant to give to each Council in Wales, Welsh Government assumes we all generate Council Tax at the same average level. In Pembrokeshire we haven’t been doing this. This has meant our total funding to finance the budget (Welsh Government grant + Council Tax) has been considerably smaller in comparison with other Councils in Wales, including neighbouring Councils in Carmarthenshire and Ceredigion (in relative terms).

Over the past six years, we have bridged a funding gap of £90.0m. The main way we have achieved this has been from making substantial cost reductions and efficiencies, which has accounted for £68.7m. Smaller, but still significant contributions, have come from increased Council Tax income (£20.0m including base changes), a contribution from the Council Tax second homes income (£0.6m) and a one off contribution from reserves (£0.7m).

 

WHAT’S CHANGING FOR THE 2020-21 BUDGET?

Welsh Government has given a strong indication that we will receive an increase of 4.9% in grant (Aggregate External Finance – AEF) from them for 2020-21 (when adjusted for transfers into the settlement). This would be the third largest increase for a Council in Wales.

There are a number of reasons for this such as Welsh Government receiving more money from UK Government and because we have increased the income we generate from Council Tax.

There is a projected funding gap of £6.2m for the 2020-21 budget (net revenue expenditure). This is considerably less than the £21.4m funding gap the Council faced for the 2019-20 budget.

While the increase in grant (AEF) received from Welsh Government will certainly help the Council budget for 2020-21, other pressures on our budget remain.

 

CABINET’S 2020-21 BUDGET STRATEGY


The Council’s Cabinet has outlined the following plan to tackle the projected funding gap:

1). It is proposed that individual service budgets are flat-lined for 2020-21.

Individual services are things like schools, education, social services, environmental services, highways and central support services.

This means that individual services would not receive any increase in their net expenditure budgets for 2020-21.

All inflationary, demographic and legislative pressures for 2020-21 would have to be contained by the individual services through cost reductions and / or efficiency savings.

Table 1, Column A gives estimated figures for the impact of flat-lined individual services budgets.

2). It is proposed that a number of services are given additional funding to offset these inflationary, demographic and legislative pressures and / or to tackle particular issues they are facing.

Table 1, Column B provides details of these proposals.

3). It is proposed that Council Tax is increased to help meet the cost of proposals to offset inflationary, demographic and legislative pressures and / or to tackle particular issues faced by services.

Table 2, outlines Council Tax increase options.

TABLE 1

 

 

 

 

Service Area

COLUMN A

 

A flat line net expenditure budget for 2020-21 would represent a projected funding gap of

COLUMN B

 

 

Cabinet’s Proposals

Education – Individual School Budgets

£5,222,000

£3.0 million to meet the pay and pension pressures on Individual School Budgets (some funding for the remainder of this year will be coming via grant).

 

£2.0 million increase for Individual School Budgets on top of the pay and pensions (this should mean no requirement for redundancies).

 

Education – Other

£2,531,000

£2.0 million increase for the Education – Other budget, which includes Inclusion Services and Youth Services.

 

£50,000 for Haverfordwest Youth Service provision.

 

£1.0 million to tackle under-performance at Key Stage 4 (funded from Reserve).

Social Care – Children

£894,000

£1.0 million to fund pressures on children’s out of county care.

 

£800,000 to recruit and retain new social workers (nb: this would be for both Children’s and Adult’s Services below).

 

Social Care – Adults

£4,599,000

£1.2 million to fund pay pressures for our adult social care staff.

 

£2.0 million to fund pay pressures for our contracted adult social care staff.

 

Housing Fund General

£33,000

£50,000 for extra homelessness provision.

 

Highways & Transportation

£665,000

£1.0 million for road safety schemes (funded from Reserve).

 

£600,000 to fund highways cost pressures.

 

£500,000 for fixing potholes and poor road surfaces (funded from Reserve).

 

£70,000 for major events.

 

The cost of changing street-lighting to LED bulbs will come from an alternative invest to save Reserve (this will also assist with our climate change agenda).

Culture & Related Services

£599,000

£200,000 for Leisure Services to enable them to achieve their ten year cost reduction plan.

 

 

Planning & Development Services

£240,000

£235,000 for Planning which is facing serious challenges - subject to a full business process review.

 

£200,000 for regeneration, for 2 years (funded from Reserve).

 

£120,000 for repairs to historic buildings (this is to try and prevent the huge capital costs we are now facing on historic buildings).

 

Environmental Services

£840,000

£300,000 for Environmental Services cost pressures.

 

£100,000 for public toilets, to prevent any further closures (other than where due to vandalism).

 

£100,000 for fly tipping.

 

Holding Accounts (including Central Support Services)

£1,360,000

£500,000 for Holding Account pressures.

 

£500,000 for IT as many services require new systems/system development and support.

 

£50,000 for an extra post in Internal Audit.

Contingency

-

£500,000 to increase the contingency.

 

Options for Council Tax 2020-21


TABLE 2: OPTIONS FOR COUNCIL TAX 2020-21

 

Option

Proposed Council Tax Increase and income generated

Cost Reductions / Efficiencies Required

Total

Option 1

2.5% to generate £1.5 million

£4.7 million

£6.2 million

Option 2

5% to generate £3.0 million

£3.2 million

£6.2 million

Option 3

7.5% to generate £4.5 million

£1.7 million

£6.2 million

Option 4

10% to generate £6.0 million

£0.2 million

£6.2 million

 

Your Views

To give your views please complete our short online survey 

Alternatively, please print out a hard copy response form.

Once complete, please scan in and email to surveys@pembrokeshire.gov.uk or post to: Pembrokeshire County Council, Policy, 2D County Hall, Haverfordwest, SA61 1TP

The closing date for responses is Monday 27th January 2020.

Your responses will be compiled into a report and used to inform an integrated impact assessment. These documents will be made available to Council for consideration in its final decision making. A final decision will made at the Council meeting on Thursday 27th February 2020.

ID: 5895, revised 27/01/2020