Agenda item

To receive the information, consider the risks arising from the forecast expenditure against the budget, and scrutinise the Cabinet’s decisions regarding budget management by the Council and its departments.

·         To accept the report

·         To note the situation and the relevant risks in the context of the Council’s budgets and its departments

Submitted - the report of the Cabinet Member for Finance, Councillor Ioan Thomas, requesting that the Committee noted the position and relevant risks in respect of the Council's budgets and those of its departments, considered the Cabinet's decisions of 12 October, 2021 and provided comments as required.

The Cabinet Member for Finance set out the context for the report, noting the following: -

·         That the significant financial impact of Covid-19 continued in 2021/22, which was a combination of additional costs, income losses (equating to over £20 million in 2020/21) as the Council had given priority to safeguarding the health and lives of the people of Gwynedd in response to the crisis.

·         Despite creating an amended programme of savings for 2021/22 by abolishing, slipping and re-profiling savings schemes in January 2021, there remained a delay in implementing savings in some fields, with a delay as a result of the crisis an evident factor. It was noted that there was a significant overspend in the Adults, Health and Well-being Department and the Highways and Municipal Department whilst there was a marked improvement in the projections of the Children and Families Department.

·         Applications for compensation from Welsh Government's Hardship Fund were being submitted on a monthly basis.

·         The Cabinet had accepted all the recommendations noted in the report to the Cabinet on 12-20-21.

The Senior Finance Manager referred to a summary of the final position of all departments and highlighted the fields where there had been significant differences.

·         An overspend of £1.4 million was projected in the Adults, Health and Well-being Department, with a failure to realise savings worth £855k being an obvious factor of the overspend. It was expressed that covid had had a substantial impact on the department and £1.3 million had already been claimed from the Welsh Government towards the additional costs for the period.

·         Following the Council's decision to allocate £1.8 million in additional funding to the Children and Families Department in the 2021/22 funding cycle, as well as abolish savings schemes to the value of £1.1 million it was highlighted that the current financial projections for the department were very promising.

·         It was stated that overspend problems in the waste collection and disposal field continued within the Highways and Municipal Department. It was noted that there had been difficulties in realising savings in a number of areas to the value of £673k and the department had faced additional costs responding to covid. Nevertheless, it was reiterated that Welsh Government had already compensated them and it was expected that it would continue to compensate them for the remainder of the year.

·         It was noted that corporately there were prudent projections when setting the 2021/22 budget that were responsible for additional tax outputs and contributed to the underspend on Council Tax Reductions.

The members expressed their thanks for the report.

During the ensuing discussion, the following observations were made by members:

·         It appeared that covid was being blamed for everything - were we looking at the picture properly? Were we certain that departments’ management were on top of their work? That the situation was not buckling under pressure due to home working?

·         What was the risk that the Government would refuse further compensation if it appeared that covid was being used as an excuse within departments?

·         Gwynedd was a destination for retired residents who had not contributed to the area - a serious challenge especially to the costs of the Adults, Health and Well-being Department?

·         Overspend in the Adults, Health and Well-being Department and the Children and Supporting Families Department was not new - the overspend existed before covid and the situation was likely to be exacerbated due to covid - was there a need to place more pressure on the government and seek more funding?

In response to the comments, the Head of Finance Department noted:

·         That the Corporate Management Team reviewed the service continuation level every fortnight and monitored the levels of financial concerns as concerns were continuing, more problems were arising and there were requests for support from department to department due to the pressures of the crisis. It was noted that the report was heartening on the whole and the situation was comparatively satisfactory with a mandate from the Cabinet to the Chief Executive and the Head of Finance Department to get to the root of the problems in both departments to seek a solution - he agreed there was a need to take a look at the position and the failure to realise the savings

·         Information about the allocation of the basic grant for 2022/23 would be received in December 2021 and the Council's position was robust enough to bridge short-term schemes should the grant be lower than expected. It was reiterated there was an opportunity to weigh up the situation and establishing a New Council in May 2022 would be a good opportunity to re-discuss the savings. It was noted that the grant received from the Welsh Government Hardship Fund was significant and was currently funding homelessness, care and free school meals. It was highlighted that the relevant Welsh Government Minister, Rebeca Evans, had stated that there would be no Hardship Fund from April 2022, unless circumstances change. It was noted that local authority representatives had conveyed concerns and risks to Government, and that if the fund ceased, an appropriate addition to the 2022/23 grant settlement would be required.

·         There was an element of recognition in the grant for the number of older people along with pupil numbers. That the Council's decision to increase council tax by 100% on second homes was proof that the Council was doing its utmost to find contributions towards costs.

·         There was now stability in the Children's Service through securing the right budget and grant bids. The Adults, Health and Well-being Service and the Highways and Municipal Department were to receive further attention over the next few months. It was noted that there were fair estimates in terms of the savings budget and it was suggested that those savings that had not been delivered could possibly be a management issue - the situation was down to failure to act rather than incorrect budgeting.

RESOLVED

·         To accept the report

·         To note the situation and the relevant risks in the context of the Council’s budgets and its departments.