Agenda item

To consider the report

To accept the information, note the risks arising from the forecast expenditure against the budget, and support the Cabinet's decisions in the context of the budgets of the Council and its departments.

Submitted – the report of the Cabinet Member for Finance requesting that the Committee notes the position and relevant risks in respect of the Council's budgets and those of its departments, considers the Cabinet's decisions of 13 October, 2020 and provides comments as required.

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

·         This report again demonstrated the impact of the pandemic and the pressure on the departments.

·         Appendix 1 to the report was important, as it showed the receipts received from the Welsh Government per department, and illustrated the situation clearly to the members.

He noted that the Cabinet had considered the report at its meeting on 13 October, and had resolved as follows:-

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

·         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 complete precedence to safeguarding the health and lives of the people of Gwynedd in response to the crisis, which has meant that it was not possible to continue with the performance challenging and savings arrangements during the crisis period.

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

·         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.

·         To note that a Children's Budget Taskforce has been commissioned by the Chief Executive to address the complex financial issues of the Children and Families Department in order to get to the root of the overspend, with the aim of presenting a report to the Cabinet which will detail the response plan.

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

o   On Corporate budgets, that:

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

¾     a net underspend of (£1,127k) on Corporate budgets will go to the Council's general balances to assist in facing the financial challenge ahead of the Council, particularly so in light of the Covid-19 crisis.

·         That grant receipts from the Government to compensate for added expenditure and income losses related to the Covid-19 crisis are allocated to the relevant departments in accordance with what is noted in Appendix 1.

During the discussion, members raised the following matters:-

·         Referring to the table on page 221 of the Agenda, there was a £1m difference between the total grant applied for from the Welsh Government's hardship fund and the total grant received, and the member enquired whether there were further grant monies to be received, or was the Council expected to bear this difference? In response, it was explained that the Welsh Government rejected some applications, and deferred before paying some others. For example, claims for Free School Meal payments had been deferred since August, and were worth £200,000, with the Council awaiting receipt of the money. It was added that the Senior Finance Manager and her team were to be commended, since Gwynedd was amongst the top 6 authorities in terms of the amount they had managed to draw down from the Government's Covid Hardship Grant, and was the best in Wales in respect of the amount rejected i.e. the lowest amount rejected. This Council's method of putting forward the information had been praised by the Government as an intelligible approach, and consequently Gwynedd was managing to access the funding more quickly than other councils. It was also noted that over £400,000 had been spent on laptops to enable staff to work from home since March, and that they had managed to recover half of this cost from the fund. This was a considerable success, bearing in mind that these laptops would be an asset for the Council in future.

·         Again, referring to the table on page 221 of the agenda, it was noticed that no grant had been received for August, and a member enquired whether they were right in assuming that the Council was expecting to receive a grant of £800,000 (i.e. that the deficit between the sum applied for and the amount to be received would only be around £200,000), or whether there was a problem with the August application?  In response, it was explained that this was a timing issue, and that the Council awaited information back from the Welsh Government regarding this application. The Welsh Government was assessing applications from all the Welsh Councils, therefore there was a delay between submitting the application, and being notified that the application had been approved and the money being paid over. In response to a further question, it was confirmed that they expected to receive the amount applied for in this case.

·         The Chief Executive's intention to get to grips again with the Children's Budget Taskforce was welcomed. A member enquired whether the findings of this work could be used to press on and discuss with the Government, and with other councils, to see if there was room to re-examine the budget coming from the Government for this field in particular. In response it was explained that the Society of Welsh Treasurers had compiled a survey to try to gather information about the pressure and demands in the children's field across the 22 local authorities in Wales in order to put this on the Government's radar. However, without knowing the result of the UK Government's one year spending review, and what would be the settlement for Wales, the Welsh Government was not in a position to commit to anything at present.

RESOLVED to accept the information, note the risks arising from the projected expenditure against the budget, and support the Cabinet's decisions in respect of the budgets of the Council and its departments.