Cabinet discusses Medium Term Financial Strategy

Bridgend County Borough Council’s Medium Term Financial Strategy will soon be undergoing further scrutiny by cross party councillors ahead of it being presented to full council next month.

The strategy includes the 2021-22 annual budget and also covers a financial forecast up to 2025 with spending priorities of the council outlined as well as key investment objectives and budget areas targeted for necessary savings.

While the council’s net revenue budget is planned at £298.956 million for 2021-22, its overall expenditure far exceeds this.

Taking into account expenditure and services which are funded by specific grants or fees and charges, the council’s gross budget will be around £420 million in 2021-22.

Local authorities get the majority of their revenue funding from Welsh Government through the Revenue Support Grant and a share of Non Domestic Rates. It supplements this through council tax collection, other grants and fees and charges.

Over the coming year, Bridgend County Borough Council is proposing to spend £127 million on services delivered by the Education and Family Support Directorate. The majority of this money will be spent by the county borough’s 59 schools and one pupil referral unit.

In addition to the £103 million proposed budget to be delegated to schools in 2021-22, which mostly pays for the salaries of teaching and other school staff, and the running costs of the facilities, the council has already spent £21.6 million in building and refurbishing schools as part of its 21st Century School Modernisation Band A Programme and has provisionally committed to a further £19 million as part of the Band B Programme.                         

For 2021-22 the level of budget reductions required is not as great as had been feared. As a result, it has been possible to protect schools from a proposed 1 per cent annual efficiency target for one year.

After Education, the largest area of council spend is on social care. This includes social care for children and for adults with care and support needs.

In total, the council is proposing to spend £74 million on social care and wellbeing services over the coming year.

The council’s strategy over the next few years is to more effectively support independence and continue to remodel the way it works to help decrease dependency and enable people to maximise their independence.

On the public realm which includes work to maintain highways, parks and open spaces, clean streets, and collect and dispose of waste, the council has earmarked an overall net budget of around £21.8 million.

Council tax currently funds almost 30 per cent of the budget with more than £80 million being collected from around 65,000 households in the county borough.

Based on the proposed net budget of almost £300 million, the council tax increase for 2021-22 will be 3.9 per cent.

The council tax increase is lower than the 4.5 per cent proposed in the budget consultation and reflects the views of the majority of respondents who were in favour of only increasing council tax slightly or up to 4.5 per cent in order to protect the most important services. It also takes into account the better than anticipated settlement from Welsh Government but is mindful of the ongoing pressures still facing the council.

Over the last 10 years, the local authority has had to make £68 million of budget reductions due to national austerity measures and reduced resources. This represents almost 25 per cent of the council’s current budget.

Throughout the year the coronavirus pandemic has resulted in a number of additional cost pressures and loss of income. While Welsh Government has played a significant role in mitigating the majority of these losses through their various funding streams, most notably the Covid-19 Hardship Fund, the council now needs to consider the longer term impact of the pandemic and how it will shape the council as part of its recovery programme

The council’s deputy leader Hywel Williams said

Cllr Williams added: "Other pressures include legislative changes, demographic changes and an increase in the number of pupils at our schools. More recently, there’s also been a reduction in the amount of council tax being collected, due to the difficult economic circumstances that people find themselves in. This is coupled with an increase in council tax support as more people find themselves on low incomes or claiming benefits.

"While our provisional settlement from Welsh Government contains an increase of 4.3 per cent and is a significant improvement on our ‘most likely’ funding assumption, it does not recognise a number of new pressures that the council will have to meet, and the uncertainties still surrounding Covid-19 and Brexit, so should be viewed with a degree of caution.

"Going forward the scale of the financial challenge remains considerable. We will continue to seek alternative ways of delivering services if that can ensure greater sustainability and efficiency.

"For example, over recent months there has been a significant acceleration in the Community Asset Transfer (CAT) Programme and it is anticipated that a saving of £300,000 can be made next year by transferring responsibility for the management of assets, predominantly outdoor sports related playing fields and pavilions, to town and community councils or community clubs and groups.

"In addition the Covid-19 pandemic has shown how some council services can be delivered differently, and it is important that where appropriate that is something that endures and that investment is made to ensure that services can be maintained and delivered safely.

"We very much appreciate the role of the cross party Budget Research and Evaluation Panel which has already helped us with our deliberations – this draft strategy will now pass through the overview and scrutiny committees, we welcome the feedback from the scrutiny process."

Cabinet members discussed the Medium Term Financial Strategy at a cabinet meeting on Tuesday, January 19.