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Councillor Marshall.
None received.
Item 4 September Revenue and Budget Monitor Report: Councillor Davies referred to a point of accuracy. Comment to be changed from no spending reserves in Newport Schools to there had been an overspend of reserves by £5.4M. The Minutes were therefore accepted subject to the above.
The Leader presented the first report to Cabinet colleagues that dealt with the 2024/25 Council budget and draft budget proposals. The report outlined the key planning assumptions for the proposed budget, investments and the savings that were required to produce a balanced annual budget, and which also delivered sustainable future finances to ensure the Council continued to deliver services to residents in Newport and met its priorities. The report also covered the consultation arrangements and the timetable to agree final budget proposals to be considered at full Council at the end of February. The budget consultation was started later than usual to ensure certainty on the Council’s core ‘revenue support grant settlement’ and considered the budget gap. Further work is required before agreeing the final budget proposals, concerning aspects of the settlement itself. Whilst the Council budget has a budget gap for 2024/25, the Leader was pleased to confirm that it was lower than this time last year and previous years. The report considered confirmed a budget gap before savings of £3.8m due to funding increasing at a lower rate than cost increases. The Leader provided more detail on key parts of the draft budget to the Cabinet. The Councils budget remains subject to significant price and inflationary increases on pay and social care contracts, driven mainly by the significant increase in the UK minimum wage and, more specifically in Newport, the ‘real living wage’ rates. The increase was smaller than anticipated back in February 2023, because of significantly reduced energy costs and some of that decrease has been kept back to invest into a new match funding budget against Welsh Government grants for carbon reduction projects. Demand on services continued to be the biggest challenge. Continued increases impact on children’s social care and homelessness provision with legacy issues of Covid and the current cost of living challenges. These represent the biggest risks to the Council’s future financial sustainability and work to stabilise these to the greatest extent possible continues. Newport received the highest percentage increase in its core funding settlement from the Welsh Government, driven by demographic factors such as an increasing population. Funding increased by 4.7%, which is a further £13.5m of funding. The Council is consulting on an 8.5% increase in Council Tax; o The starting point is lower than nearly all other Councils in Wales and the UK. In cash terms, the increase is much lower than the percentage might suggest. The report showed that this would be £1.50 to £2.01 per week for those houses in Newport’s most common bandings and remains one of the lowest Council Tax rates in Wales and the UK. o The Council supports those eligible for financial assistance with their Council Tax bill. Households suffering financial challenges would not pay this increase as the Council Tax Reduction Scheme still supports them. o Therefore, those who could not afford this increase would continue to receive help with paying their Council Tax. o The Leader advised residents to look beyond the headline percentage change as it could be misleading. Those who required help with their bill continued to receive support. The increase also protects essential services to the most vulnerable. Because of the increased core settlement funding and to a lesser extent, Council Tax funding increases, some services are protected and developed. These are: o Protection of the school budget, with no savings requirements from school budgets next year. An investment of £9.5m into budgets next year and £24m over the Medium-Term Financial Plan (MTFP) period in teachers cost increases and growth in pupil numbers and schools. o Continued funding of social care commissioning budgets to pay at least the ‘living wage’ to employees. This provides support to this sector, ensuring the most vulnerable are supported. o Investment in a new budget to accelerate the Council’s carbon reduction by creating match funding to use alongside Welsh Government funding for these projects. o Continued investment in support for those with the greatest need in the community. Investment of nearly £400k for additional learning needs provision, £600k for homelessness provision and over £3m in children and adult social care budgets to increased provision. There is still a budget gap to resolve, and the report set out these savings. The vast majority would not impact on service provision and are delegated for implementation by Heads of Service and Directors. Lastly, the medium-term funding outlook is uncertain and likely to be challenging. Welsh Government could not forecast receiving a sufficient increase in its own budgets and was therefore unable to pass that on to Local Government, the NHS, and other vital public services here in Wales. § Councillor Davies highlighted to colleagues that the report showed a far better position than this time last year. The financial pressures of inflation, increasing staffing costs, labour shortages and increasing demand for services continued and accounted for almost £56m or 76% of total investment which would be required over the next three years. In education, additional funding amounting to £9.5m to cover pay awards and the costs of managing the increasing pupil number is necessary, with this amounting to £24m over the next three years. Councillor Davies supported the proposed budget savings and welcomed the consultation due to be launched. § Councillor Clarke reflected that Cabinet Members and Councillors were also residents and had to make the right decisions for all. The views of Newport residents are important, and Councillor Clarke urged residents to get involved in the consultation. Councillor Clarke supported the report as it is essential that a balanced budget is met. § Councillor Forsey referred to adults having aging carers that could not support them and reflected that the Council was there to help people in these difficult situations. § The Leader thanked all service areas for their support in providing a balanced budget as well as the finance team for their hard work in preparing the report and budget. Decision: 1. Cabinet agreed the following draft proposals for public consultation: i) Budget savings proposals in Appendix 2 (summary table) and Appendix 10 (detailed proposals). ii) A Council Tax increase of 8.5%, a weekly increase of £1.50 - £2.01 for properties in Band A to C, the most common bands in Newport, as set out in paragraph 3.8. iii) Proposed fees and charges in Appendix 5. iv) The budget investments shown in Appendix 1, including those for schools. 2. Cabinet approved: v) Implementation of the delegated decisions in Appendix 3 (summary table) and Appendix 11 (detailed proposals) by Heads of Service with immediate effect, following the usual Council decision-making processes. 3. Cabinet noted: vi) The position on developing a balanced budget for 2024/25, noting that the position was subject to ongoing review and updates between now and February Cabinet, when the final budget was agreed. vii) The current position in the development of a ‘Transformation Plan’ for the Council and the Head of Finance comments on the importance of that in relation to the medium/long term budget challenge and contributing to sustainable financial footing for services. viii) Further work is required to specifically review and manage the financial impacts of some key risks coming out of the draft settlement for 2024/25.
The Leader presented the report, which explained the current forecast position on the Council’s revenue budget and the financial risks and opportunities that presented themselves within the November update. This was the third revenue monitor presented to Cabinet this financial year and reflected an underspend of £2.523m, which is a £1m reduction on the September figures. The change is mainly due to increased costs in relation to homelessness and temporary accommodation. This position considered the contingency budget and the anticipated in-year underspend against capital financing budgets. Whilst an overall underspend is projected, it should be noted that service areas are collectively forecast to overspend by £4.7m, excluding schools. This update provided confirmation that some of the known risks, as at the start of the year, had materialised and were causing significant overspend, especially within Children’s Services and Housing. As anticipated, however, it was currently proving possible to offset service area overspends with the general contingency and underspends within capital financing. The key variances contained within the overall position included: (i) Increased demand across key social care areas including children’s out of area and emergency placements. These two areas alone contributed an overspend of almost £3.9m to the overall service position. (ii) Increased demand within adults residential and non-residential service also contributed £1.5m to the overall service position. This, however, was offset by the overachievement of community care income as a result of an increased number of users contributing to their care. (iii) Significant pressures were evident within Housing and Communities, in relation to homelessness. Despite the Council allocating a significant budget increase for 2023/24, to address the ongoing impact of the overspend incurred last year, costs further increased and an overspend of £2.4m is projected. This area saw a significant increase in costs over the last two years, following the Welsh Government’s policy aim to dramatically reduce homelessness. This policy led to an unprecedented upturn in demand for temporary accommodation, for which the costs were not fully covered by service user contributions or housing benefit, leaving the Council to incur the net cost. The Leader noted that the Chancellor for the UK Government made an announcement in his Autumn Statement regarding financial support in terms of Local Housing Allowance. Demand for housing and homelessness services are at unprecedented levels due to the cost-of-living crisis, continued austerity, the expansion of statutory homelessness duties and, most recently, the Home Office Streamlined Asylum Process. High demand, coupled with low supply of accommodation in the social and private rented sector, meant that the Council was reliant on expensive forms of temporary accommodation such as bed and breakfasts, high street hotels and specialist temporary accommodation providers. In context, the shortfall for a family with a two-bed need in a hotel was £65 per night or the equivalent of c.£23k per year. Further to this, the Council was required to employ additional staff to meet its expanded statutory duties and currently runs accommodation with security for people with complex needs due to the lack of supported housing in the city. (iv) There were forecasted underspends against non-service budgets, specifically the general contingency and capital financing. Savings in these areas, as set out within the report, were more than offsetting the net service area overspends, resulting in an overall underspend for the whole Council. (v) There was an anticipated shortfall against the delivery of 2023/24 and prior year savings of over £1.1m. The two services responsible for the majority of the shortfall were Adult Services and Housing and Communities. Within Housing and Communities, it has not been possible to evidence achievement of this saving, especially given the overall overspend in this area. Within Adult Services, whilst some proposals are proving difficult to currently achieve, it was hoped that ultimately it would be possible to deliver these in full. As school variances are managed through individual schools’ balances, the overall underspend of £2.5m does not include the schools’ position. Schools are collectively forecasting an overspend against budget of £4.6m which would see balances reduce from £14.4m to £9.8m by the end of the financial year. Considering the significant level of savings that schools need to deliver during 2023/24 and the level of recurring expenditure included within the £4.6m overspend (which amounted to circa £2.3m), officers continued to closely monitor school balances over the medium term as part of the Council’s deficit avoidance and prevention strategy. Whilst the financial year is in its final quarter, the risk that the position could worsen between now and March remains. These risks mainly relate to demand-led services, which are volatile in nature and could result in costs increasing very rapidly, as evidenced by the recent increase in the Housing overspend. Considering the risk that this position could change, efforts continued to be made to mitigate overspending within service areas to bring the service area position back towards a balanced position by the end of the year. Part of the reason for ensuring an underspend was achieved is because of the current constraints upon capital resources and the Transformation Fund. A revenue budget underspend is one way of assisting with this challenge. § Councillor Davies referred to the overspend in school reserves which reduced to £4.6m. There was a risk that certain schools might set a deficit budget, support was being provided to ensure this did not happen. Many schools where reserves are depleted are at risk of setting a deficit budget in coming financial years. § Councillor Batrouni mentioned that the report and the previous item showed that people wanted to work and live in Newport, with growing pressures on schools, adult services, and housing reflecting that demand. Decision: That Cabinet · Noted the overall budget forecast position outlined within this report, which was comprised of service area overspending, offset by underspends against non-service budgets. · Noted the risks identified throughout the report and in the Head of Finance comments, such as in relation to demand issues being faced. · Noted the overall shortfall in the delivery of savings accepted as part of the 2023/24 revenue budget. · Noted the forecasted movements in reserves. · Noted the overall position in relation to schools’ budgets, acknowledging the risk that some individual deficit positions could emerge by the end of the financial year.
The Leader presented to Cabinet colleagues the Capital Programme monitoring and additions report for November 2023. This was the third monitoring report of the year on capital activity and provided an overview of the updated capital programme, alongside the projected outturn position as of November of this year. The report provided an update on the level of available capital headroom, detailed the additions to the programme that were identified and sought Cabinet’s approval for these additions. The first section outlined the movement in the capital budget since the last report was presented to Cabinet in September. The net value of additions and amendments to the current capital programme in 2023/24 since then was £3m, and a breakdown of these additions was given in Appendix A. The majority of the new additions were being funded via external grants. As a result of these additions as of November 2023, the current budget for 2023/24 was now £93.2m, which is substantial and challenging to deliver in full. The report also outlined the level of slippage being forecast against the revised £93.2m budget. A variance of circa £9.6m was being projected, the majority of which related to slippage, with the balance relating to net underspends. The slippage being forecasted was largely down to issues encountered in relation to a handful of large schemes, with the full breakdown of slippage available in Appendix B. The report noted that these figures were subject to continual review and may change between now and the end of the financial year. At this stage of the year, Cabinet was asked to note the level of slippage, with approval only being sought at the end of the year as part of the outturn report. The report also detailed the level of capital headroom currently available, which could be used to support new schemes and emerging priorities. This now stood at £8.259m, and there were no changes to the headroom since September’s monitoring report. Whilst the level of available headroom is higher than it was a year ago, it was noted that if a few significant issues arose then this would be consumed. The Council is able to respond to critical issues, as and when they emerged. This required tight control and the clear prioritisation of only the most pressing and urgent issues. Any opportunity to further increase the headroom should be taken, to make it possible to ensure sufficient funding exists to respond to any issues that arose. Regular update reports include information on the Council’s compliance with its prudential and treasury management indicators. Appendix D illustrates that the Council complied with all of its indicators, as of 30 November 2023. § Councillor Davies noted the reference to the Additional Learning Needs (ALN) grant funding received from Welsh Government. Monies were allocated to a number of schools to improve provision, with £510,000 being allocated to Maes Ebbw to replace and upgrade the outdoor play and learning facilities and upgrading some of the toilets. As Cabinet Member for Education and Early Years, Councillor Davies saw the necessity in making these improvements and was pleased with this funding allocation which would have a positive impact on learning and well-being within the school. £100,000 was allocated to Ysgol Bryn Derw for the Kimberley Nursery School site and a proportion of which would improve outdoor play facilities. § Councillor Batrouni thanked Councillor Davies as a governor of Maes Ebbw School For listening to head teachers, teachers, parents, and children. § The Leader thanked the finance team for their work regarding the reports prepared for Cabinet. Decision: That Cabinet 1. Noted the predicated capital expenditure outturn position for 2023/24 2. Noted the amendments to the capital programme 3. Noted the available remaining capital resources (‘headroom’) and the earmarked usage of that resourcing. 4. Noted the inclusion of the Treasury Management prudential indicators, included within the report.
The Leader presented the Council Tax Premium report which deals with long-term empty and second homes in Newport and the possibility of introducing Council Tax premiums on these properties. The other reports considered by the Cabinet today highlighted the consequences of the increasing demand for housing and the shortage of available housing stock. The impacts are both ‘financial’ on the costs the Council incur in short-term homelessness accommodation, and also ‘societal’ for the individuals and families affected. In addition to a general lack of available housing, Newport had a large number of unoccupied properties that remained persistently high: Council Tax premiums, if introduced, would encourage owners to take steps to bring their properties back into use. In November Cabinet was asked to agree that a public consultation exercise be undertaken on introducing Council Tax premiums and this report provided the results of that consultation. There were 470 responses to the consultation and the findings show that more than 75% of respondents agreed that Newport City Council should take steps to encourage owners to bring properties back into use: nearly 60% agreed with the introduction of a ‘premium’ to achieve this. Although second homes are fewer in number, a consistent approach should be taken for these underused properties. Therefore, the report includes recommendations to adopt Council Tax premiums in Newport, for both second homes and long-term empty properties. The legislation provided some exceptions that prevented a premium being charged in some circumstances. Following feedback from the consultation and to address stakeholders’ concerns, some additional limited ‘local’ exceptions were also recommended. If the recommendations of this report were agreed, the matter would be taken forward to Council for a final decision to be made. If agreed there, they would be implemented on 1 April of this year. § Councillor Clarke thanked those who took part in the consultation process and referred to the housing crisis throughout the UK, the Council Tax premiums would therefore help. The Consultation set out what the premium should be with a 100% premium receiving the most positive response. § Councillor Davies mentioned that there was a housing crisis, with over nine thousand residents on the housing register in Newport alone. There was a disconnect when considering there were 2565 empty properties within Newport boundaries. Councillor Davies supported this proposal being taken to full Council and, if adopted, it would be part of a tool kit used by Newport City Council to increase the availability of housing stock in the city. § Councillor Harvey stated that officers worked hard seeking accommodation for residents and families that needed emergency accommodation. Councillor Harvey supported the report. § Councillor Hughes referred to similar issues in North Wales and considered that Newport came to a sensible settlement with a premium figure at the lower end to encourage landlords to do something to improve these properties to put back into use when they were most needed. Decision: Cabinet considered the results of the consultation and recommended the introduction of Council Tax premiums to Council in line with the preferred option shown within the report.
The Leader provided an update on the performance of service areas against their 2023/24 service plans. Last year, Newport City Council launched its Corporate Plan 2022-27. Each service area developed their service plan outlining their contribution towards the delivery of the Corporate Plan and the Council’s strategic priorities. This report is a self-reflection and summary of their performance for the first six months of this financial year (1 April to 30 September 2023). Each service area presented their updates to the Council’s Performance Scrutiny Committees (People Performance Scrutiny Committee and Place and Corporate Scrutiny Committee). The feedback and recommendations of the Performance Scrutiny Committees was included in the report for Cabinet and the Council’s senior leadership team to consider. Overall, the service areas reported positive progress against 37 out of 43 objectives with only six objectives reporting an ‘Amber’ requiring improvement update. 61 (53%) of performance measures were achieving or succeeding against their targets. 14 (12%) performance measures were reported as being short of achieving their target and 9 (8%) measures were reported as Red and underperforming. Cabinet remained committed to supporting service areas to improve on the areas of underperforming but also to celebrate and recognise the achievements of service areas considering the pressures faced by many services. The report also included examples of where services were making a difference for residents and the case studies reflected the dedication and hard work of staff to support some of the most vulnerable and disadvantaged people in Newport and continued to improve the city. § Councillor Davies thanked the Performance Scrutiny Committee – People and officers for the work undertaken to effectively review the mid-year education service plan and mentioned the highlights which were worthwhile noting and celebrating. No schools in Newport were in special measures and Estyn highlighted a good number which excelled and were asked to write best practice reports. Newport completed the universal roll out of Free School Meals for all primary school children, ahead of most local authorities in Wales. Since September, all children in junior and foundation phases were able to access a hot meal whilst in school. Councillor Davies thanked head teachers and staff for these outstanding achievements, along with officers and the staff in Chartwells who worked hard to make this happen. Decision: Cabinet agreed the Mid-year assessment report of service area performance.
The Leader introduced the Council’s new People Plan for 2023/2028 to Cabinet. Following the development of the Corporate Plan in 2022, a number of critical plans were developed, such as the Digital Strategy and next year, the new Strategic Equality Plan. The People Plan would help to attract, develop, and retain the workforce needed to deliver on aspirations. The workforce remains the Council’s most valuable asset, and this plan aims to set out people priorities. The development of the People Plan themes commenced in mid-2023 with engagement with staff, managers, and trade unions. Four strategic themes emerged through extensive engagement with stakeholders, which were: o Representation and Transformation - ensuring workforce was more representative of the city, whilst enabling a transformational and forward-thinking workforce. o Employee Wellbeing – supporting the wellbeing of staff contributing to creating a positive working environment. o Employee Engagement – developing staff engagement, creating commitment and high performance, embedding values and a willingness to deliver for citizens. o Employee Experience - developing as an employer of choice and supporting recruitment and retention. The People Plan document included within the report outlines these four themes and a plan for the workforce over its lifecycle. The plan also provides insight into the positive actions supporting the delivery, and noting the work with employees to develop new staff values which would be launched alongside the plan. The Leader paid her own personal tribute to the Chief Executive for her contribution to the transformation of the Council and noted she was an outstanding leader with regard to transformation. The Leader also thanked the team involved. It was important to the organisational culture and to the work experience of all employees across the whole organisation. The Leader also took the opportunity to thank Councillor Batrouni, as Cabinet Member for Organisational Transformation. § Councillor Batrouni echoed the thanks of the Leader and reflected that staff were critical to the success of the city and do a sterling job. There are difficult times ahead and this document is part of the journey to give staff the right skill sets to deliver to residents now and in the future. § Councillor Davies was pleased to support the adoption of the People Plan as a supportive document where health and wellbeing were clearly prioritised. It was vital that not only did Newport City Council attract highly motivated and skilled individuals who wanted to work for Newport City Council, but importantly that the Council retained them. Going forward it was important that the plan achieved these objectives, and it was reassuring to see there was already a clear action plan in place. § Councillor Hughes mentioned that retention of staff in social services was a difficult area and wanted to reassure staff that their wellbeing was taken very seriously, and their hard work was appreciated. Decision: Cabinet reviewed the People Plan and agreed its adoption.
The Leader presented an update on the Council’s Corporate Risk Register for the end of Quarter 2 (1 June to 30 September 2023). The Risk Management Policy and Corporate Risk Register enabled the administration and officers to effectively identify, manage and monitor those risks which could prevent the achievement of strategic priorities and undertake statutory duties as a local authority. The Quarter 2 risk report was presented to the Council’s Governance and Audit Committee in November 2023 and there were no recommendations or feedback required for Cabinet to consider. At the end of Quarter 2, the Council had 43 risks recorded across the Council’s eleven service areas. Those risks that were deemed to pose the most significant risk in the delivery of the Council’s Corporate Plan and its services were escalated to the Council’s Corporate Risk Register for monitoring. At the end of Quarter 2, 15 risks were recorded in the Corporate Risk Register. · 9 Severe Risks (15 to 25). · 6 Major Risks (7 to 14). In comparison to the Quarter 1 corporate risk register, one risk (Newport Council’s Property Estate) increased risk score from 16 to 20, and one risk score, Stability of Social Services providers, improved with the risk score reducing from 20 to 16. The remaining 14 risks were reported with the same risk score as quarter one. § Councillor Hughes highlighted the improvements with regard to the vulnerabilities in the external provider sector, which was being hit hard by the cost-of-living crisis and services. Teams recruited new managers and were redesigning their structures and strengthening their resilience to continue to deliver a high level of service to vulnerable residents. Decision: Cabinet considered the contents of the quarter 2 update of the Corporate Risk Register.
The last report presented by the Leader provided an update on the external pressures facing the Council. Moving into 2024, the impact of the cost-of-living crisis and the pressures on housing and homelessness services continued to be felt. This monthly update is important to discuss issues arising from external pressures and highlighted opportunities for residents. Collaboration with partners and communities during these challenging times remained vital in supporting those in need. Working with the Institute of Health Equity as a Marmot region, Cabinet was aware that the impact of poverty was wide-ranging. Helping school communities better understand poverty, its impact on learning and how they can be reduced or removed is a key part of the Education Services Poverty Strategy. In Newport, the lead reason for homelessness continues to be due to loss of rented accommodation and rising rent costs had the potential to further increase the demand on housing and homelessness services. The increase of the Local Housing Allowance cap to the thirtieth percentile from April 2024 was welcomed but with the wider pressures on the Private Rented Sector in Newport, the impact of these changes remained to be seen. The Leader took the opportunity to urge residents experiencing difficulties to contact the Council for information with signposting on the advice and support available, in person, by phone or by visiting support and advice pages on the Council’s website. It was encouraging to see the newly appointed Cost of Living Advisors collaborating with internal officers, including education colleagues, and partner agencies to provide advice, guidance, and support to residents across the city, with events and road shows already planned for 2024. To support some of the more vulnerable citizens during the winter months, the Council collaborated with partners and established a network of temporary spaces which could be used under the Severe Weather Emergency Protocol (SWEP), providing shelter for people sleeping rough. The Leader of the Council and Chair of OneNewport, continued to advocate for partnership working as being fundamental in supporting residents and businesses and once again, encouraged anybody in need to access the support available to them. The Leader also highlighted the availability of grant funding for warm hubs within community groups and those interested could contact GAVO for further information. § Councillor Harvey agreed with the Leader that it was important to review this report on a monthly basis and Harvey mentioned those residents and families suffering from mental health issues due to the cost-of-living crisis. Councillor Harvey also thanked staff for their support of residents. § Councillor Davies thanked officers within the education team for joining forces with the community team to deliver the anti-poverty roadshows in schools. The linked-up approach was welcomed and made a difference and was ongoing. The provision of benefit advice, financial advice along with support regarding uniform as well as other agencies attending with support and advice on well-being made a difference. § Councillor Forsey referred to housing pressures and in the past year as a councillor, had received more requests from residents for housing than over the past three years. Councillor Forsey also wanted to thank the housing department who kept families in their houses by way of preventative measures for families not to lose their homes. § Councillor Clarke thanked the homelessness team and Helen James, the Rough Sleeper Co-ordinator. Staff were out during early hours over the Christmas period delivering breakfasts and talking with homeless people, providing advice and guidance. Councillor Clarke also thanked officer regarding their work on Severe Weather Emergency Protocol (SWEP) provision. Councillor Clarke thanked all the teams within Newport City Council for their work over Christmas. § The Leader thanked all cabinet colleagues for their continued support for their residents. Decision: Cabinet to consider the contents of the report on the Council’s activity to respond to the external factors on Newport’s communities, businesses, and Council services.
The Leader noted the One Newport summary document which is included for our awareness. The document provides updates from the One Newport Partnership, such as updates on the Gwent PSB, Newport’s Local Action Plan, the Integrated Well-being Network and Age Friendly Communities. The Leader took the opportunity to thank partners for their contributions.
This was the regular monthly report on the Work Programme. Decision: Cabinet agreed the Work Programme.
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