Agenda item

¾    To accept the report on the end of August 2020 review of the Revenue Budget, and consider the latest financial situation regarding the budgets of each department/service.

¾     To note the financial impact of Covid-19, which is a combination of additional costs, income losses and slippage in the savings programme, as the Council has given the utmost priority to safeguarding the health and lives of the people of Gwynedd in response to the crisis, which means that it was not possible to continue with the performance challenging and savings arrangements during the crisis period.

¾     To support the intention of the Chief Executive and Head of Finance Department to meet with each Cabinet Member and their Head of Department, to discuss how it will be possible to resume the procedure of delivering the proposed savings, so that the Council can proceed with a proportion of the savings programme, despite the crisis.

¾     To note that there is significant overspend by the Adults, Health and Well-being Department this year, as complex details need to be clarified in Adult care; the Chief Executive has already commissioned work to obtain a better understanding of the matters and a clear response programme.

¾     To note that the Chief Executive has commissioned the Children's Budget Taskforce to address serious financial matters within the Children and Families Department to get to the root of the Department's overspend, with the intention of submitting a report to the Cabinet that will detail the response plan.

¾     To approve the following recommendations and financial virements (as outlined in Appendix 2). 

·         On Corporate budgets, that:

¾     (£250k) relating to capital costs has been transferred to a capital programme fund. - the net underspend of (£1,127k) on Corporate budgets will go towards the Council's general balances to assist in facing the financial challenge that lies ahead for the Council, especially in light of the Covid-19 crisis.- 

¾     That grant receipts from the Government to compensate for additional expenditure and loss of income in relation to the Covid-19 crisis will be allocated to the relevant departments in accordance with what is noted in Appendix 1.

The report was presented by Cllr Ioan Thomas 

DECISION

·         The report on the end of August 2020 review of the Revenue Budget was accepted, and consideration was given the latest financial situation regarding the budgets of each department/service.

·         The financial impact of Covid-19 was noted, which was a combination of additional costs, income losses and slippage in the savings programme, as the Council had given the utmost priority to safeguarding the health and lives of the people of Gwynedd in response to the crisis, which meant that it was not possible to continue with the performance challenging and savings arrangements during the crisis period.

·         The intention of the Chief Executive and Head of Finance Department to meet with each Cabinet Member and their Heads of Department, to discuss how it would be possible to re-grasp the procedure of delivering the proposed savings, so that the Council could proceed with a proportion of the savings programme, despite the crisis, was supported.

·         It was noted that there was significant overspend by the Adults, Health and Well-being Department this year, as complex details need to be clarified in Adult care; the Chief Executive had already commissioned work to obtain a better understanding of the matters and a clear response programme.

·         It was noted that the Chief Executive had commissioned the Children's Budget Taskforce to address serious financial matters within the Children and Families Department to get to the root of the Department's overspend, with the intention of submitting a report to the Cabinet detailing the response plan.

·         The following recommendations and financial virements (as outlined in Appendix 2) were approved. 

o   On Corporate budgets, that:

¾    (£250k) relating to capital costs had been transferred to the capital programme fund.

¾    the net underspend of (£1,127k) on Corporate budgets would go towards the Council's general balances to assist in facing the financial challenge ahead of the Council, especially in light of the Covid-19 emergency.

·         That grant receipts from the Government to compensate for additional expenditure and loss of income in relation to the Covid-19 crisis would be allocated to the relevant departments in accordance with what is noted in Appendix 1.

DISCUSSION

The report was submitted, noting that it highlighted the latest review of the Council's revenue budget, along with the projections for the end of the financial year. It was stated that the figures in the end of August review highlighted the financial impact of Covid-19 on the figures, that were a combination of additional costs, income losses and a slippage in the savings programme.

It was noted that the Welsh Government had established a hardship fund to compensate for costs and loss of income of Local Authorities. In Gwynedd, monthly applications of over £4.5 million had been submitted to Welsh Government to compensate the Council for the period up to the end of August, with £3.6 million having already been received. In terms of the loss of income, an application for the first quarter of the financial year was nearly £3.7 million, with £3.3 million having already been received.

It was stressed that the pressure on departments had been evident this year and problems with realising savings had become increasingly prominent this year and contributed to the overspend reported in the Children, Adults and Highways and Municipal fields. The main matters in some of the sections were highlighted as the impact of Covid19 had had a significant repercussion on the Adults, Health and Well-being department this year, with £2.2 million spent up to the end of August. It was noted that £1.722 million had already been received from Welsh Government and even without the impact of Covid, it was anticipated that there would be £1.8 million of over-expenditure to realise savings of the value of £1.7 million. 

Although £1.8 million of additional funding was allocated to the Children and Families Department in 2020/21 an overspend of £2.8 million was anticipated as well as the failure to realise £688k savings that require a solution. It was stated that the latest statistics confirmed a further increase in demand for services, especially in the placements and Post-16 fields. It was emphasised that the situation was a matter of concern although it was not unique to Gwynedd. 

It was highlighted that problems continued this year in the field of waste collection and disposal and the department faced additional costs relating to Covid; however, it was hoped that Welsh Government would compensate us for the additional costs.

Observations arising from the discussion

¾  Staff were thanked for their work and commitment during the last few months.

¾     Gratitude was expressed to Council’s front-line staff. In terms of the Education Department, it was added that cleaning and catering costs had risen significantly as a result of Covid, and it was asked if these types of costs would be compensated by the Government. It was noted that this type of costs would be funded as it was a cost as a result of the virus.