Medium Term Financial Strategy and Council Budget 2019/20
Decision Maker: Cabinet, Council
Decision status: For Determination
Is Key decision?: Yes
Is subject to call in?: Yes
Update on MTFS and preparation for 2019/20 Budget
Councillor Phil Davies, Leader of the Council, said:
“We have a responsibility to set a fair, sustainable and balanced budget. This is a challenge which gets more difficult every year, as austerity policies continue to bite.
Once again, this year, we are facing an almost unimaginable financial challenge. Continued reductions in our support from Central Government, combined with growing demand for our services, mean we must find ways to reduce our spending – or raising our income – by £45 million just next year.
This is on top of the more than £200 million in cuts we have been forced into delivering since austerity began. This means we must make ever more difficult decisions, but we will never shirk our responsibilities to Wirral residents. We will always find ways to use our diminishing resources to improve our borough and the quality of life our residents can enjoy.
We will invest public resources where it will deliver the most impact – in creating jobs, in improving the local environment, and in protecting our most vulnerable children, adults and families.
We will deliver on all of our promises to Wirral residents. Our medium-term financial strategy provides a budget for next year, which delivers on our priorities for Wirral and meets our principles as an Administration – it protects our most vulnerable, it shields the services our residents rely on most from the worst of the cuts, and it safeguards our workforce.
Even in these most challenging circumstances, it is a budget we can be proud of and a budget I believe Wirral residents will support.”
Councillor Phil Davies introduced a report which was part of the Council’s formal budget process as set out in its Constitution and in line with the legal requirements to set a balanced and sustainable budget for 2019/20. The report presented an update on the Medium Term Financial Strategy (MTFS) agreed earlier in the year including details of the preparations for the following financial years. The Cabinet was required to initiate and propose financial options to set the budget for next year. The purpose of the report was to approve a set of proposals.
The Cabinet considered the following financial matters:
· The approach to the preparation of the Council’s 2019/20 Budget. It was anticipated that the Council would set a balanced budget in 2019/20 via increased income including that received from Council Tax, the implementation of a number of financial proposals that were included in Appendix 1 to the report and the use of one-off funding that would close the budget gap.
· an update on the progress of the MTFS, a renewed version would be considered by the Cabinet in February 2019.
· Details of the main financial challenges and changes that would occur in the next financial year. The Council continued to face a funding gap projected at £45 million as a result of financial pressures and, in part, the planned reduction in Government grant.
This was a key decision which affected all Wards within the Borough.
The Cabinet was aware that the Council had a legal requirement to set a balanced Budget each March for the following financial year. The report detailed proposals and initiatives that increased income or reduced expenditure and assisted in decisions regarding setting the Budget. The Cabinet could choose alternative approaches to the delivering of a balanced budget.
Councillor Phil Davies made reference to the Government statement that the period of austerity was at an end. He had reservations about that in the light of the £45m the Council had to save in 2018/19 and the £22m it had to save in the following two years. He reminded the Cabinet that the Council would not receive any revenue support grant after 2021. Councillor Davies was adamant that the Council would balance its budget and that it would not be allowed to go bankrupt.
Councillor Phil Davies welcomed specific items detailed in the report that the Chancellor had announced in his Budget on 29 October 2018 that would benefit local government. However, he considered that they appeared to be one offs. He was particularly concerned that the Government had not yet provided solutions to the social care crisis. Councillor Davies informed that he hoped the Government would come up with a set of solutions as there was still uncertainty about local government funding post 2021. There was a need to sustain good quality public services going forward. The Council had huge budget pressures and there was a need to be more focused on early intervention.
Councillor Phil Davies also referred to the levies around Merseytravel and Waste which were unknown at present. He informed that the Council had to start the process of how to close the £45m budget gap for next year. It needed to identify opportunities to generate additional income and to transform services by finding new innovative ways to deliver them. The Council needed to introduce interventions around social care and find ways to get people back into employment. This would reduce the pressures on health and demands for social care. Councillor Davies hoped that once the Brexit debate was settled the Government would focus on local government funding and the social care crisis.
Councillor Phil Davies drew the Cabinet’s attention to the proposed engagement and consultation arrangements contained in the report and informed that any suggestions to raise income and save money that were not set out in Appendix 1 would be gratefully received and would be considered by the Cabinet in the New Year.
Councillor Stuart Whittingham informed that the Council was delivering good quality services for the people of Wirral despite austerity. He asked Cabinet Members to imagine what they could deliver if the Council was funded properly. He informed that he found the way that the Government had treated Wirral and other areas in the north appalling.
Councillor Bernie Mooney informed that it was almost perverse that social credit was not working and was pushing people into debt. This had implications for social care. The Government needed to put funding in place for early intervention. It was heart breaking how the Council had to budget. The Cabinet wanted the people of Wirral to have their say through this consultation exercise and come forward with any ideas they may have.
Councillor Anita Leech highlighted that although the Council did not know the levy for waste, the tonnage had increased and this could possibly be an added pressure on the budget.
Councillor Janette Williamson was of the view that the Government’s austerity agenda showed that it did not care. She hoped that Wirral residents would take part in the consultation exercise. She also informed that she was pleased with the innovative decision to set up the Growth Company to bring new expertise, new ideas and new investment to Wirral.
(1) the financial proposals for 2019/20 that will be the subject to consultation and further consideration by the Cabinet in February 2019 as set out at Appendix 1 to the report be approved;
(2) the financial challenges facing the Council in setting a sustainable and balanced budget for MTFS 2019/20 - 2022/23 be noted;
(3) the approach the Council is taking to close the budget gap over the four year budget planning horizon to deliver a sustainable budget be noted;
(4) the approaches the Council is pursuing to ensure future budget sustainability be noted; and
(5) an updated Budget Report and MTFS be presented to the Cabinet at its meeting scheduled for 18 February 2019.
Publication date: 29/11/2018
Date of decision: 26/11/2018
Decided at meeting: 26/11/2018 - Cabinet
Effective from: 07/12/2018