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The budget, your Council Tax and local services

 

3. Why is there a gap in the budget and where does it come from?

Over past years the amount of money we have received from Welsh Government has been reducing.  In addition to losing money we have had to find money from within our existing resources to pay for things like:

  • workforce pay increases - agreed nationally
  • rising costs of energy, food, fuel and other services
  • the costs of new nationally agreed employer taxes such as the Apprentice Tax Levy
  • the costs attached to new legislation such as new Additional Learning Needs Code for Wales and Sustainable Drainage Systems (SuDS) entitlement to social services
  • the rising costs of social care

On top of this, where we have dipped into our reserves or savings to balance budgets - a gap is immediately created in the budget the year after - as reserves can only be spent once and are not available to spend again to plug the gap.

4. What is the value of the financial challenges facing the Council for 2020/21

The starting gap in the Councils budget for 2020/21 was £16.315M.  

Through its ongoing work to balance its budget the Council identified £8.164M of efficiencies and new income to help close the gap.  This left a shortfall, which without any additional financial support from governments, would be impossible to find.  

On 16 December 2019, Welsh Government announced an improvement in the amount of funding it would give to each Welsh council to pay for goods and services in 2020/21.  This amounted to £6.559M of new funds for Flintshire and reduced our budget gap to £246,000. 

Through the identification of additional Council savings and the utilisation of additional Welsh Government grant funding, the gap has been closed and our budget has been balanced, something which during the year seemed an improbability - but there is no room for complacency.  

The Council continues to face a number of risks during the year ahead and budgets will need tight and prudent management. Reserves and balances are at their lowest ever level and it is essential they are stabilised and replenished over they year to come. 

9. Why can't the Council use up the money it has in reserves to help balance the books?

The Council holds back reserves – rather like savings – to cover itself against unexpected costs and emergencies.  In recent years we have made use of our reserves to contribute to the annual budget setting to help to reduce the gap and balance the budget.

Compared to many councils Flintshire has modest and limited reserves to call upon.  Our reserves are reviewed every quarter to make sure they are still needed. Some Council reserves are held for specific purposes e.g. school balances. 

Over the last six years the Council has used £10M from its reserves to bridge the gaps in its budget and help schools out – the use of reserves is not a sustainable solution in the longer term. Reserves can only be used once and the amount we hold is reducing.

The Council could be exposed to a number of open risks during the year – such as:

  • NJC and teacher pay awards
  • children's services
  • additional learning needs/special educational needs
  • school deficits

We need to be prudent in managing our budgets tightly.  Our reserves and balances are at their lowest ever level.   It will be essential that we stabilise and then grow our reserves over the year to come. 

With this improved budget settlement from Welsh Government the Council is in a more confident position and aims to set aside some funds to replenish its reserves in the future to protect itself against risks which could otherwise upset its budget during the year ahead. 

This is a significant achievement given the position of risk the Council has been in for so long.

10. How did Welsh Government think local councils would raise the extra money needed to bridge the gaps in their budgets?

The Council receives annual funding from Welsh Government in the form of Revenue Support Grant.

When setting its own budget for the year ahead, Welsh Government has to include a notional figure to represent the Council Tax increase Welsh councils may apply to help pay for the services they provide.  For 2020/21 the notional figure set by Welsh Government was 7.1%.  There is no “cap” which restricts the level at which any council can set Council Tax.  Instead that decision is devolved to local authorities themselves.

At the final and closing stage of the budget process for 2020/21, the Council has to rely on a Council Tax rise of 4.5% to meet its own expenditure requirements for 2020/21.

The addition of the increase in the North Wales Fire and Rescue Authority levy will bring the overall Council Tax increase up to 4.75%.

11. In April 2019 Flintshire increased its portion of Council Tax by 8.17% how was this justified?

The Council receives annual funding from Welsh Government in the form of Revenue Support Grant.

When planning its budget settlement for 2019/20 Welsh Government made a budget planning assumption that Council Tax would rise at an average of 6.5% across Wales. 

At its final and closing stage of setting its budget for 2019/20, having made £8.5m in efficiencies and income, the Council had no option but to rely on a Council Tax to rise of 8.17% to bridge the gap between the funding it received from Welsh Government and what it needed to pay to protect key local services for local people.

Welsh Government has had been holding funds which it could have been passed to councils to ease the chronic financial situation.  In its #BacktheAsk campaign Flintshire County Council In our recent #BacktheAsk campaign we asked Welsh Government for an extra £5.6M more funding for Flintshire, something which we it believed was possible and affordable.   

Even if Welsh Government had provided the full £5.6M asked for a 7% Council Tax increase would still have been needed to balance the books.

As it was Welsh Government’s Cabinet and Ministers announced some specific additional funding to assist local councils and whilst welcomed it was not enough and we were left with a budget gap of around £3.1M.

Without the extra funding requested from Welsh Government we had no option but to increase the Council's portion of Council Tax by 8.17%.

12. What will be the increase in Council Tax for Flintshire residents in 2020?

A 4.5% Council Tax increase in April 2020 will provide the money the Council needs to bridge the gap between the funding it receives from Welsh Government and the budget needed to protect key local services for local people.

On top of this a further 0.25% will be added to raise the  £177,721 increase in our contribution to the North Wales Fire and Rescue Authority. Council Tax from across the six counties of North Wales pays for the Fire and Rescue service under a system called the ‘levy’.  

You will also see an increase in your local Town or Community Council precept.   

The final part of your bill is the precept for the Police and Crime Commissioner to help fund North Wales Police.

The two tables below demonstrate the percentage and monetary increases which can be expected based on an average Band D property.

CT compared to other Welsh councils

CT compared to other Welsh councils 2

13. Does Flintshire charge a high Council Tax compared to other Welsh councils?

The Council Tax set by Flintshire County Council is not high compared to other Welsh Councils.

CT Welsh comparison 2019-20

 

14. Does Flintshire charge a high Council Tax compared to other English councils?

The Council Tax set by Flintshire County Council is not high compared to other English Councils.

The 8.75% increase applied in April 2019 may have be higher than the ‘percentage’ increase applied by our neighbouring English councils.  In real terms, however, Flintshire’s local Band D charge of £1,280.68 was still £183 lower than the average Band D charge for council run services across our near neighbours of Cheshire East, Cheshire West and Chester, Wirral, Halton, Knowsley and Shropshire.

CT English comparison 2019-20 

15. Can you explain the difference between the 4.75% and 4.68% rise in Council Tax quoted on the leaflet that came with my bill?

Not all the Council Tax collected by the Council goes towards paying for Council Services.

  • 77% is kept by the Council as a contribution to run local services 
  • 3% is collected to meet the cost of the Council’s contribution to the North Wales Fire & Rescue Authority Levy
  • 17% is collected on behalf of North Wales Police and the Police and Crime Commissioner 
  • 3% is collected on behalf of our Town and Community Councils 

Every year the amount each organisation collects goes up. 

Based on an average Band D property the table below shows the cost and percentage increase applied by each organisation for 2020/21.

In setting its budget for 2020/21 the Council has applied an increase of 4.75% in its portion of Council Tax (4.5% to help fund Council services and 0.25% to cover the cost of the North Wales Fire & Rescue Authority Levy).

However, when all the increases are added together, the total cost for 2020/21 is £1679.37, which is equal to an increase of 4.68% on the Band D Council Tax charged in 2019/20.

 Percentage increases in CT 600 pxl

16. What does my Council Tax pay for?

Council Tax is a local tax collected by councils in Wales and is based on the value of domestic property as set by the Valuation Office Agency.

Your Council Tax bill is made up of three separate charges – the charge being made by Flintshire County Council (including Fire and Rescue), the charge for North Wales Police, and the charge for your local town or community council.  

Council Tax raises just 26% of the money the Council needs to pay for local services.  The biggest part of our income (65%) comes from Welsh Government in the form of a grant.  The remaining 9% comes from the fees we charge for some services.

The Council Tax we collect is not a direct bill for the individual services provided by the Council but is pooled together to help pay for all the services we deliver. 

Council Tax payers have to pay the amount of tax due for their property and cannot ask for a reduction or discount because they, or members of their family, are at a stage in their lives where they do not use some of the services provided by the Council.

Each year we provide a breakdown of where the Council's income comes from and how the money is spent.  To see the list click here.

17. What do town and community councils do and why are they on my bill?

It is the responsibility of the Police and Crime Commissioner for North Wales to provide an efficient and effective police service for the North Wales area. This includes working with the Police and Crime Panel to set a budget for North Wales Police. The Government provides around 75% of the funding necessary to run Police services in North Wales. The rest is raised through Council Tax.    This is known as a Council Tax ‘precept’ and is based on your property Valuation band.

Flintshire, along with the other five councils in North Wales, is responsible for collecting Council Tax on behalf of the Police and Crime Commissioner for North Wales. 

The amount of ‘precept’ charged by the Police and Crime Commissioner is shown on your overall Council Tax bill.  Flintshire County Council collects all tax owed and then pays the Police and Crime Commissioner its share.  

Each year the Police and Crime Commissioner for North Wales publishes budget information about the spending plans of North Wales Police.  Click here for more information.

18. Who pays for the North Wales Fire and Rescue Service?

North Wales Fire and Rescue Service protects residents, businesses and communities across the region through preventive and responsive services including home safety, fire prevention and extinguishment, and responding to road traffic collisions and other emergencies including severe weather.

Although there is no Council Tax ‘precept’ shown on your bill for North Wales Fire and Rescue Service - part of the Council Tax you pay helps the Council fund the fire and rescue service. 

Each year, the County Council has to pay into a combined fire service fund to meet the annual costs of the Fire and Rescue Service.  This is known as the annual Fire Service Levy.  For 2020/21 Flintshire’s total contribution will be £7,968,197, an increase of £177,721 on last year and 0.25% will be added to Council Tax bills to pay for this. 

From the table below you can see the contributions made by each North Wales Council.

 

NWFRS North Wales comparisons Eng

19. Don't you think household budgets are already stretched?

We do not set our Council Tax levels lightly. We would rather be setting a Council Tax nearer to inflation. However, the annual rise we are proposing is around the expected Welsh average, with some neighbours in North Wales having no choice but to set their Council Tax at a higher rate. 

Council Tax is becoming unsustainable and should not be relied upon by Governments to compensate for inadequate national funding settlements. 

When setting its own budget for the year ahead, Welsh Government has to include a notional figure to represent the Council Tax increase Welsh councils may apply to help pay for the services they provide.  For 2020/21 the notional figure set by Welsh Government was 7.1%.. 

By increasing the Councils portion of Council Tax by 4.5% every household in Flintshire is helping to shield Council Tax payers from unreasonable demands and protect key local services which otherwise are at risk of disappearing,  Things like:

  • Schools music service
  • Youth services
  • Countryside services
  • Libraries
  • Leisure Centres
  • Household Recycling Centres

20. What can I do if I can't afford to pay Council Tax?

Council Tax payers on a low income and in receipt of welfare benefits including Universal Credit, may be entitled to some help towards paying Council Tax. This is called the Council Tax Reduction Scheme (CTRS). To see if you can get any help click here to use our benefits calculator.

If, having used the benefits calculator, you believe you may qualify, you can click here to submit an ‘on-line’ application for CTRS. 

To help Council Tax payers budget around monthly payments, the Council can also offer instalments over 12 months instead of 10, or as many months that remain in the year up to March 2020.   If you want to change your method of payment or set up payments over 12 months, you can get in touch with the Council Tax team.  Email:  local.taxation@flintshire.gov.uk  Tel. 01352 704848.

21. Will there be another rise in Council Tax in April 2021?

The levels of Council Tax we need to set in future years will very much depend on:

  • the position UK Government decides to take on funding public services
  • how much of its overall budget Welsh Government decides to pass on to local councils
  • the decisions of central and Welsh governments to fully fund national agreements like Teachers’ pay and pensions

The more money local councils receive, the less likely it is we will see high rises in Council Tax.

Flintshire and all other councils in Wales now need certainty over future budgets from governments. We cannot go through this annual cycle of planning for the unknown with all the worry and anxiety that this brings to so many people who depend on the essential services we provide. 

The Council is calling on UK Government to:

  • set out a three year forecast for its public spending plans
  • work with Welsh Government to mutually agree realistic increases in the funding given to Wales
  • prioritise finding a national solution to funding for social care
  • set out a national strategy for funding public sector annual pay awards  

Councils across Wales now expect a minimum 4% annual increase in funding from Welsh Government. 

Flintshire has not yet set Council Tax levels for 2021-22 onwards.

22. Are businesses having to pay more 'rates' or is it just home owners?

Business Rates is a national property based tax system.

Business Rates are collected by the Council, otherwise known as the billing authority, and then paid across to a national collection pool for Wales which is administered by Welsh Government. The Council receives a redistributed share of the Business Rates we collect.  Based on a formula set by Welsh Government called the Local Government Funding Formula we receive much less than we collect.

Business Rates are calculated by taking the Rateable Value of a property and multiplying it by the annual ‘rate multiplier’. Welsh Government sets the multiplier each year and this is fixed according to the Consumer Prices Index (CPI). 

In 2020/21 Business Rate bills increased by 1.7% (the rate of CPI in September 2019).  As the Council collects Business Rates on behalf of Welsh Government, we cannot ask businesses to pay more rates in order to help fund local services.

23. You must collect a lot of money in business rates why can't you use that to fund some of the budget gap?

Business Rates are collected by the Council, otherwise known as the billing authority, and then paid across to a national collection pool for Wales which is administered by Welsh Government. The Council receives a redistributed share of the Business Rates we collect.  Based on a formula set by Welsh Government called the Local Government Funding Formula we receive much less than we collect.

The Government allocates a proportion of its overall budget to the local government ‘family’ and this is then distributed to all 22 councils in ‘shares’. The Formula makes a theoretical comparative judgement on what each council needs according to its population size, its wealth and poverty, and its rurality.

Flintshire is the sixth largest County in Wales by size of population.  However, under the Funding Formula, although Flintshire collected £65.1m in Business Rates during 2018-19 we only got back £49.1m as part of our redistributed share of Business Rates. This means that Flintshire is a ‘net loser’ by £16m as this is a redistributive system that benefits Welsh councils which are smaller and do not have a large business base.

24. Why doesn't the Council chase those who don't pay their Council Tax on time - surely that would help to fund some of the budget gap?

Figures published by the Welsh Government show that Flintshire County Council, with the support of local residents, is already one of the highest performing Council in Wales in its collection of Council Tax.

In the financial year 2018/19, the Council collected 98.2% of Council Tax in the year it fell due which is well above the national average collected across Wales in that year of (97.3%). This places placed Flintshire as the highest performing Council in Wales. This collection figure is also the highest collection level ever achieved by Flintshire in its history.

We are well on track with our assumptions that we will eventually collect at least 98.9% of council taxes that are due in any given year- this is well above the current Welsh collection average of 98.1%. 

We continue to work with residents by making it easier for residents to pay their bills and to access our services.

We do recognise that some households struggle to pay and would urge anyone who is finding it difficult to pay to always make early contact with the Council Tax Service on 01352 704848 or by visiting our website www.flintshire.gov.uk/counciltax.

25. Why doesn't the Council ask central government for extra funding rather than putting up Council Tax?

For the past three years Flintshire has been openly saying that the ongoing national budget situation was not sustainable, that local services are under serious threat and Council Tax payers should not be left to pick up the bill for annual reductions in government funding.

The improved budget settlement announced by Welsh Government in December 2019 was welcomed by the Council as an important first step towards ending a decade of severe financial challenges for local government.

It was a significant achievement given the position of risk the Council had been in for so long.  Flinthshire had stood its ground on protecting local services and local jobs, and had been one of the most vocal councils in pressing the case for an end to austerity.

Whilst this helped the Council close its budget gap and set a legally balanced budget for 2020/21 there is no room for complacency.  The improved settlement has not removed all of our financial risks and our budget will need continued, tight and prudent management.

Flintshire and all other councils in Wales now need certainty over future budgets from governments. We cannot go through this annual cycle of planning for the unknown with all the worry and anxiety that this brings to so many people who depend on the essential services we provide.

The Council is calling on UK Government to:

  • set out a three year forecast for its public spending plans
  • work with Welsh Government to mutually agree realistic increases in the funding given to Wales
  • prioritise finding a national solution to funding for social care
  • set out a national strategy for funding public sector annual pay awards  

Councils across Wales now expect a minimum 4% annual increase in funding from Welsh Government.

26. Why am I charged Council Tax to help support services I don't use?

Your Council Tax contributes to the full range of services we provide, other than Council Housing which is paid for by Council tenants through their rent.

Council Tax payers have to pay the amount of tax due for their property and cannot ask for a reduction or discount because they, or members of their family, at a stage in their lives where they do not use some of the services provided by the Council.   

Education and social care are examples of services which councils provide as an extension of the Welfare State.  We all make our contribution to funding them.

27. The Council has outsourced some services like libraries and leisure centres, so why are we still paying for them?

Over the past 12 years the Council has saved £92M whilst protecting, wherever possible, those services which residents and communities highly value.

One of the ways we have done this is through the creation of a brand new social enterprise, Aura Wales, to manage high quality and sustainable leisure, library and museum services.

By taking these services out of the direct management of the Council, we have taken an entrepreneurial approach that is responsive to the commercial demands of the market.

The Council continues to financially support these services by means of an annual grant, which will reduce over time as the company becomes more financially self-sufficient.  This continued support is helping to keep leisure and library services open.   If the Council stopped or reduced the amount of support it provides services and facilities would have to close.

Aura Wales offers a full range of services.  Visit www.Aura.Wales to see the full range of membership options and special promotions on offer.

Your Council Tax contributes to the full range of services we provide, other than Council housing which is paid for by Council tenants through their rent.

Council Tax payers have to pay the amount of tax due for their property and cannot ask for a reduction or discount because they, or members of their family, at a stage in their lives where they do not use some of the services and facilities provided by the Council.

28. What do you mean by savings?

When we use the term ‘savings’, we are talking about the different ways of finding solutions to bridge the budget gap.   These can include things like:

  • being more efficient and 'saving' money
  • being more entrepreneurial in the way we do things
  • reducing the amount of money services are given to spend
  • increasing the amount of money we have to spend by charging for some services

By doing things differently we can 'save' the council money and keep services running.

29. If you are struggling to balance the books why have employees just had a pay rise?

Over the past 12 years the Council has saved £92M.  Remodelling our workforce has significantly contributed to these savings.  

Like any business our workforce is our greatest asset and our biggest cost.  We currently employ 6074 people and our ‘wage bill’ for 2018/19 was £179.4M.

In recent years the Council has done what it can to protect jobs and 673 jobs have been safeguarded through the transfer of jobs to new business models such as Aura Leisure and Libraries and NEWydd Catering and Cleaning.  

We have reduced senior management by more than 50%, administrative and clerical posts and costs by 40%, agreed new terms and conditions of employment reducing things like overtime/out of hours working costs, and operate an ongoing voluntary redundancy programme.

Pay awards for council employees are negotiated and agreed nationally by UK Government.   In line with these national agreements the Council has over recent years implemented pay freezes as well as more recent pay increases. Whilst agreed nationally, governments provide no extra funding to meet the costs of higher ‘wage bills’.

The most recent pay award agreed nationally was payable over two years; the first part on 1 April 2018 and the second a year later on 1 April 2019.

No national agreement has as yet been reached for the 2020 pay award.

31. Why do you give Councillors a pay increase?

The Independent Remuneration Panel for Wales (IRPW) is the body responsible for deciding the rates of payments councillors in Wales should receive.   

Each year the IRPW reviews these payments and invites the views of all 22 councils in Wales before imposing any increase.  For 2020/21, the IRPW has proposed a 2.5% increase. 

Although councils are asked for their views the final decision on the actual increase to be applied rests with the IPRW.  Flintshire has not yet received notification of the actual increase to be applied in 2020/21.

Councils are given no extra funding to pay for these increases and in planning to balance our budget for 2020/21 a sum of £25,000 has been included to meet the potential extra cost.  This is equivalent to 0.03% of the overall 4.5% increase in the Councils portion of Council Tax.