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Budget Book

This page provides information about the Wrexham County Borough Council budget book, which includes revenue spending proposals of each of the services of the County Borough Council for the financial year.

Copies of the detailed budget book are available in your local library.

The following information provides a summary of the current budget:

1. The local authority budget planning process in Wrexham, as elsewhere, requires an early view to be taken about the Council’s budget prospects based on national economic indicators and government planning totals for local authority spending.

2. The budget planning timetable for 2016/17 was issued to all members in March 2015 and at an all member budget workshop on 21 April members were informed of an estimated budget shortfall of approximately £45m over the next three years of which £15.3m related to the 2016/17 financial year.

3. During September and October 2015 the Council consulted on a package of draft savings proposals which covered a number of areas including a) a new Senior Management Model and Structure b) New Departmental Models and Structures c) Reducing Third Part Spend and d) Income and Cost Recovery. The proposals were summarised and presented in a booklet called ‘Difficult Decisions’. The consultation was widely publicised and a total number of 1,717 responses.

4. The Council’s medium term financial plans have been developed using the following parameters:

5. The medium term financial plan will be reviewed on a periodic basis.

Review of the Current Year 2015/16

6. The budget for the year was cash limited at £223,120,519.

7. The budget has been closely monitored and controlled during the year in accordance with the procedures approved by Council. A number of service pressures and increased costs were identified early in the financial year and it was agreed that action should be taken by officers to control spending and to keep service spending within the approved cash limited budget totals.

8. All budgets will continue to be carefully scrutinised in accordance with the agreed procedures and the actual outturn will be reported in the summer. In accordance with the rules of cash limited budgeting, any over or underspending may be carried forward to 2016/17.

Welsh Government (WG) Revenue Settlement

9. The grant allocation for individual authorities is dependant on the standard spending assessment (SSA) formula. For 2016/17 there were no significant changes to the formula.

10. The WG announced its provisional revenue settlement details for local authorities on 10 December 2015. The settlement gave local authorities in Wales on average a 1.4% grant decrease (after taking into account of transfers of grants) and Wrexham’s share of the decrease was 1.3%. On 10 February 2016, the Minister for Public Services published an update to the 2016/17 Provisional Settlement which took account of a £2.5m top-up funding for three authorities and some minor amendments to the underlying data. As a consequence of the additional top-up, the settlement represented an overall grant decrease of 1.3% for authorities in Wales.

11. The final revenue settlement details are due to be published on 3 March 2016 and are expected to be in line with the updated provisional settlement.

12. The Local Government Finance Act 1992 gives the Minister for Public Services, power to limit or cap the budget requirement of any local authority, which he considers to be excessive. The Minster has made no announcement relating to assumptions about the Council’s spending level for 2016/17. The Council’s standard spending assessment, the notional assessment for grant distribution purposes of the Council’s need to spend on its services, totalled £228,338,702.

2016/17 Budget

13. The budget for next year as outlined in Page (vi) has been built up in accordance with the framework agreed by Council. The budget in the current year (i.e. the cash limited budget amended for the transfers of grants into the Revenue Support grant) has been adjusted for the cost of inflation, unavoidable commitments and savings.

14. The total net revenue expenditure is estimated at £224,068,633.

15. It is a requirement of the Local Government Act 2003 that I should report to members on the robustness of the estimates made for the purpose of calculating the net budget requirement. I should therefore draw your attention to a number of key risk areas that I have identified in the budget and how these may be managed. These are outlined in (iii) Page 13. Issues relating to these key risks will be reported to members during the forthcoming year as necessary as part of the budget monitoring and control procedures.

Reserves and Balances

16. A local authority requires a prudent level of working balances to maintain adequate cash flow, especially during the first part of the financial year prior to the receipt of council tax income, and to meet unforeseen expenditure.

17. There are no planned contributions to balances for 2016/17. However, I am satisfied that the level of balances and reserves is adequate for the forthcoming financial year and the authority’s medium term financial strategy.

18. There is still uncertainty on the impact of pay and other inflation costs and the reduction in specific grants on the Council’s budget.

19. An analysis of the Council’s key estimated earmarked reserves and balances for the year ahead is as follows:

Fund Actual Balance at 1 April 2015 £k Estimated Balance at 1 April 2016 £k Movement in Year £k Estimated Balance at 31 March 2017 £k
Council Fund Balance 7,018 7,018 0 7,018
School Balances 2,560 974 0 974
Service Reserves 1,327 340 (169) 171
Other Earmarked Reserves
(excluding grant reserves)
10,994 5,194 (2,119) 3,075
Total Balances and Reserves 21,899 13,526 (2,288) 11,238

20. The estimated balances at 1 April 2016 in the table above are based on the best estimates available at the time of writing the report. The movement in the Council Fund balance includes the reported position in the current year. The reported position will change following the closure of the 2015/16 accounts and will be reported to members after the end of the financial year. Of the 2016/17 in year planned movement on service reserves of £169k none will be used to fund recurrent expenditure.

21. In accordance with the Council’s Reserve Strategy, Other Earmarked reserves will be reviewed to ensure they continue to be held according to an agreed plan or returned to the Council Fund balance for more appropriate allocation.

Income

WG Grant Funding

22. In total the Council will receive general grants from the WG of £169,767,686. The Council’s share of the final Revenue Support grant and Non Domestic Rates will be published in March 2016. The business rate poundage for 2016/17 has been set at 48.6p in the £.

Council Tax

23. After taking account of the general grants and contribution from balances, the balance of net expenditure totalling £54,300,947 remains to be funded by council taxpayers.

24. It is proposed to charge as a special expense part of the cost of footway lighting to the four community areas within the town (£4.84 at band D), the community of Llangollen Rural (£15.84 at band D), Chirk (£10.29 at band D) and Glyntraian (£12.31 at band D).

25. After adjusting for special expenses of £114,420 the balance to be found as general expenses from council taxpayers is £54,186,527.

26. The council tax base calculation for 2016/17, is 52,960 band D equivalent properties after allowing for:

The overall tax base is built up from the same calculations for each of the 34 community areas and the “band D equivalents” are shown in Page (vii).

27. Dividing the balance of net expenditure (£54,300,947) by the tax base of 52,960 will give a £1,025.32 charge to be borne by a full-paying household whose home is valued at band D. For band A property the charge is six ninths of this figure through to band I properties where the charge is twenty one ninths of the band D figure. In many cases these figures will be adjusted for disabled and other discounts and, of course, for council tax benefit.

28. Page (vii) sets out the council tax rate for the band D taxpayer for each community council area and shows that when the police authority’s precept is included, the total average council tax at band D for 2016/17 is £1,309.91.

Conclusion

29. Although there has been a reduction in the financial settlement for 2016/17 every effort has been made to prioritise schools and the most vulnerable.

30. The Local Government Act 2003 requires the Council to monitor its budget and to take appropriate action. The budget will therefore require close monitoring and control during the year and the financial position will need to be kept continuously under review.

31. Finally, I remain very grateful to all Members and Officers for their assistance, cooperation and hard work in helping to prepare this budget.

M S Owen
Head of Finance Department