Agenda item
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 January
2019. She highlighted that since 2015 the Council had faced realising savings of
approximately £27 million, and this was a challenge to achieve. She noted that
the end of November review of the budget showed a mixed picture with acceptable
financial control in a number of Council departments. She explained that
significant overspend was anticipated by the Education Department, Children and
Families Department together with the Highways and Municipal Department and
there were specific actions to ensure control of their budgets by 31 March
2019.
Attention was
drawn to the Cabinet's decision:
"To accept
the report on the end of November 2018 review of the Revenue Budget and note
the latest financial position in respect of the budgets of every
department/service.
·
To ask the Cabinet Member for Adults, Health and
Well-being, together with the Head of Department, to get to the root of the
Provider service overspend and take steps to reduce the overspend, and report
to the Cabinet on the response plan.
·
Due to an increase in the overspend on a number of
budget headings by the Children and Families Department since the last review,
to consider the situation when receiving the Cabinet Member’s performance
report (29/01/19 Cabinet) with a view to attempt to reduce the overspend by the
end of the financial year.
·
Because of the level of overspend on pupils’
transport by the Education Department, to consider the situation when receiving
the Cabinet Member’s report (29/01/19 Cabinet).
·
To allow the Environment Department to allocate
(£60k) of the department's underspend to conduct a review by commissioning
research by the University and employing extra officers to collect evidence in
the Public Transport field following a number of issues over recent years.
·
Harvest (£2,984k) of the net underspend on
Corporate budgets,
Ø with (£700k)
associated with the Council Tax premium to be allocated to a specific fund to
be considered for the Housing Strategy.
Ø (£435k) relating
to capital costs to be transferred to the capital programme’s financing fund.
Ø with the remainder
namely (£1,849k) to be transferred to the Supporting the Financial Strategy
Fund to assist with inevitable one-off pressures on the Council's
budgets."
During the ensuing discussion, officers and
the Finance Cabinet Member responded to members' observations and enquiries as
follows:
·
That the overspend on pupil transport had been
discussed at the Cabinet meeting on 29 January 2019, in the context of the
Education Cabinet Member's performance report. A solution to reduce the
overspend would take time. It was intended to change the method of providing transport
in order to get a cheaper provision, because it was a long-term solution
additional funding was placed in the 2018-19 budget to address the
overspend. The additional funding did
not address all the overspend as a solution was expected from the Education
Department and the Environment Department.
·
In terms of the income of parks and beaches in the
Economy and Community Department, that the report reflected the general
departmental income position. Generally, income generated by a department was
used for other services within the specific department.
·
There was a tendency to overspend in the Homeless
Service as the homeless numbers were increasing. The situation was not unique
to Gwynedd and the increase in the number of homeless people was a national
issue.
·
That the Council communicated with the Welsh
Government in the context of home owners registering their houses as a business
in order not to pay a Council Tax Premium. Increasing pressure was being placed
on the Welsh Government to change these arrangements, however, not overly
confident that the arrangements would change. The Council Leader was part of
the discussions on this matter.
·
There was pressure on the Council to provide
services with less money, discussions would take place in the context of home
owners registering their houses as a business and the financial impact on
councils at the Welsh Local Government Association Rural Forum meetings. The
Head of Finance was gathering information on the financial cost of registering
houses as a business on councils in the context of Council Tax income
loss. It was hoped that the other eight
councils, who were members of the Forum, would agree that arrangements needed
to be changed.
·
In terms of the financial impact of houses being
registered as a business on the Council, that a reclassification in the context
of the tax base would mean that the Council would gain financially in terms of
the Welsh Government grant but would lose out financially when a house is
registered as a business and is back-dated. The Valuation Office did not have
sufficient resources to challenge the applications appropriately. A specific sum could not be stated in terms
of the loss to the Council as a result of houses being registered as a
business, but it was likely that there would be approximately £2 million of
additional income to the Council as part of the Council Tax Premium Scheme.
·
In favour of the proposal when the Council Tax
Premium Scheme was established to charge a premium tax on holiday homes to
generate additional income. A portion of the income deriving from the Council
Tax Premium Scheme had been earmarked for the Housing Strategy. That there was
increasing political pressure to revise the system of registering houses as
businesses, with Members of Parliament and Assembly Members part of the
campaign. The Council was lobbying the Welsh Government in the context of the
need to change the system by presenting a requirement to receive permission via
the planning system to change a house into a business.
·
Regarding the Adults, Health and Well-being
Department's budget, in the context of the budget's size the variations under
the headings were not substantial. Departments have the right to move
underspend from one heading to another, however, there was a tendency when there
was a substantial overspend not to move money as this was a better measure of
the actual situation. There was some movement in terms of providing services,
with the underspend and overspend under the headings reflecting the demand.
That the work done as part of the Alltwen Scheme was being rolled-out to other
areas together with significant funding (£800k) for the staffing costs of
Dementia units that was a financial bid as part of the budget recommended for
the 2019/20 financial year and a response to the increasing demand.
·
Pleased to receive information from a member in the
context of the arrangements of a council in England that was charging for care
costs on the councils where the individual had moved. If there was an
opportunity then the Council would look into this matter.
·
That research by Bangor University, commissioned by
the Environment Department, was part of the review of the Public Transport
sector. This did not include the transport of pupils in the Education
Department, there was specific work to be completed in this field by the
Education Department and the Environment Department.
·
That the overspend in the 2018/19 financial year
was more evident as more departments had overspent. There was expenditure on
child protection and vulnerable adults areas and inevitable expenditure on the
transport of additional learning needs pupils in the Education Department.
Overspend on children's services was not unique to Gwynedd as there was
overspend in this area in Britain. Services are provided in accordance with
Ffordd Gwynedd by placing the people of Gwynedd at the centre of any actions.
RESOLVED
to note the situation and the relevant risks in the context of the Council’s
budgets and those of its departments.
Supporting documents:
- Revenue Budget 2018-19 - End of November Review, item 5. PDF 221 KB
- Cabinet Report 22/1/19, item 5. PDF 82 KB
- Appendix 1, item 5. PDF 13 KB
- Appendix 2, item 5. PDF 218 KB