...therefore Pep Guardiola still needs Kyle Walker's services at least until next season.
Of course, but the problem is that Pep wouldn't need his services throughout the season, he will be picked specifically for certain games, just like what happened last season. I'm pretty sure Walker doesn't want that, he wants to move to a team in which he can start nearly every game, and he knows City can't give him that and this is why they are offering him just a one year contract. If kyle Walker leaves City, it is because he knows that his game-time at the Etihad would be quite limited next season.