To submit the report of the Head of Finance.
Minutes:
The report was submitted
by the Senior Finance Manager, she
set the context and elaborated on the content of the report that had been submitted
to Cabinet on 22 May 2018. She
noted that the final financial position of the Council’s departments for 2017/18 confirmed that there was effective financial management by the relevant Cabinet Members, department heads and budget managers.
She drew attention
to the Cabinet's decision:
"1.1 To consider and note the final
financial position of the Council’s departments for 2017/18.
1.2 To approve the amounts to be carried forward (the “Revised Over/(Under) Spend”
column of the summary in Appendix 1), namely -
DEPARTMENT |
£’000 |
Adults, Health and Well-being |
(100) |
Children and Families |
100 |
Education |
0 |
Economy and Community |
(35) |
Highways and Municipal |
100 |
Environment (formerly
Regulatory) |
(100) |
Gwynedd Consultancy |
(82) |
Corporate
Management Team and Legal |
(66) |
Finance |
(66) |
Corporate Support |
(67) |
1.3
To approve the following recommendations and virements (as explained in Appendix 2):
·
Transfer £457k, equivalent to the supporting delivery of social services grant over the winter period to a specific fund to support the flexibility and facilitate transformation in the field of Adults in future.
·
Harvest (£37k) of the underspend, namely the sum above (£100k) for Adults, Health
and Well-being, to be used to assist the departments who overspend this year.
·
The Children and Families Department
to receive one-off financial support of £676k to alleviate
the majority of the 2017/18 overspend,
allowing them to move forward to face the challenges of 2018/19.
·
Transfer £207k to eliminate the Education
Department's overspend, whilst transport policies and arrangements are being
reviewed.
·
Highways and Municipal Department to receive
one-off partial financial support of £203k to limit the
overspend to be carried forward by the Department to £100k, to assist
them with facing the challenge of 2018/19.
·
Transfer £378k of the Environment Department's 2017/18 underspend to a specific fund, relating to buses and routes
costs, to be used in 2018/19.
·
Harvest (£89k) of the Environment Department's underspend, namely the sum above (£100k), to be used to assist the departments that overspend this year.
·
Harvest (£894k) of the net underspend on Corporate
budgets (on Council Tax Reduction, bids and budgets returned by departments and
on other headings), and transfer to assist the overspending departments in
2017/18.
·
Transfer £66k from the Financial Strategy
Support Fund, namely the balance required, to support the departments that overspend.
1.4
To approve the virements from the specific reserves as outlined in Appendix
3 following
a review of the reserves,
namely:
·
Harvest (£2.915m).
·
Assign £2.749m to the
Council Plan.
·
Assign £166k to waste issues."
The Cabinet Member for
Finance noted that the financial position was generally very acceptable. He explained that relevant Cabinet Members had explained reasons for the overspend in the Children and Families
Department and the Highways and Municipal Department at the Cabinet meeting
on 22 May 2018. He confirmed
that assurance had been received at the meeting that overspend
was being addressed.
The Head of
Finance Department noted that there had been an underspend in the Education
Department, Environment Department and the Adults, Health and Well-being
Department, as the Council had received grant funding from Welsh Government at
the end of the financial year. He confirmed that grant funding had been
assigned to commitments in the 2018/19 financial year.
Whilst he welcomed
the receipt of grant funding, the Cabinet Member for Finance noted that it was
not ideal for the Council to receive it during the period when it closed its
accounts. He explained that he would take the opportunity to discuss the forward
programming of grant funding payments with Welsh Government so that the Council
could forward plan.
A member noted his
gratitude for the work and reiterated the Cabinet Member's observation that
Welsh Government needed to be contacted about the need to forward programme
grant payments as receiving grant funding at the end of a financial year made
officers' work difficult.
During the ensuing
discussion, officers and Cabinet Members responded to members' enquiries as
follows:
·
An update was provided regularly to the Committee about the overspend situation on taxis to transport
pupils to schools. The Education Department had received £207k to eliminate the overspend, whilst transport policies and arrangements were being reviewed.
The situation would be reported upon in
the next budget review report;
·
In terms of the reason
for the overspend under the 'Provider Service' heading in the Adults, Health and
Well-being Department, school meals income
did not cause the overspend.
School meals income affected specific secondary schools and the Education Department in the primary sector;
·
In terms of the loss of income on parking fees,
the target of 2017/18 parking
fees income was increased higher to what had been collected
in 2017/18, in order to contribute towards the savings of the Environment Department. Having considered the income collected from car parks of £1.795m, an income deficit
of £50,000 was a very small
percentage;
·
With regards
to overspend in terms of Council Tax as a result of the District Valuer's Office allowing 282 properties to transfer from the Council Tax to the Non-domestic Rates list, that the Holiday Homes and Taxes Scrutiny
Investigation, officers and Cabinet Member had warned that there
would be a risk of losses in terms
of the tax premium on second homes
as legislation was not entirely
sound. When potential income had been estimated, it was noted that the Council would not receive £5m as a result of the premium, but that
realistically the Council would receive approximately
£2m. The situation was not unexpected,
and there was no reason at the moment to adjust the estimated income level expected
in the 2018/19 financial year. It was seen that the number of transfers to the non-domestic rates list in
2017/18 was over 50% higher
than in previous years, with the impact of back-dating some applications to 2010/11. The
Cabinet Member for Finance
had written to Welsh Government
regarding the matter in the last month;
·
The situation
in terms of the tax premium on
second homes was being regularly monitored by the Cabinet Member for Finance, and he was of the opinion that legislation to exact that planning
permission be received in order to change
a house to a business and this had been
noted in the letter sent to Welsh Government. Confirmation was received from the District Valuer that they
did not have staffing resources to monitor the system. A report
would be submitted to a meeting of the Cabinet in the Autumn on the situation
in terms of tax premiums on
second homes.
RESOLVED to note the situation and the relevant risks in the context
of the Council’s budgets and those of its
departments.
Supporting documents: