Agenda item

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

·         The financial impact of Covid-19, which is a combination of additional costs, income losses and a slippage in the savings programme, was noted as the Council had given the utmost priority to safeguarding the health and lives of the people of Gwynedd in response to the crisis.

·         It was noted that there was a significant overspend in the Adults, Health and Well-being Department and the Children and Families Department this year. The work of gaining a better understanding of these matters is ongoing.

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

·         On Corporate budgets, that:

¾     An underspend of (£613k) relating to capital costs was transferred to the capital programme fund.

¾     The net underspend of (£1,177k) on Corporate budgets will go towards the Council's general balances to assist in facing the financial challenge ahead of the Council at the end of 2020/21, especially in light of the Covid-19 crisis.

·         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 submitted by Cllr Ioan Thomas

DECISION

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

·         The financial impact of Covid-19, which is a combination of additional costs, income losses and a slippage in the savings programme, was noted as the Council had given the utmost priority to safeguarding the health and lives of the people of Gwynedd in response to the crisis.

·         It was noted that there was a significant overspend in the Adults, Health and Well-being Department and the Children and Families Department this year. The work of gaining a better understanding of these matters is ongoing.

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

·         On Corporate budgets, that:

¾     An underspend of (£478k) relating to capital costs was transferred to the capital programme fund.

¾     The net underspend of (£1,312k) on Corporate budgets will go towards the Council's general balances to assist in facing the financial challenge ahead of the Council at the end of 2020/21, especially in light of the Covid-19 crisis.

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.

DISCUSSION

The report was submitted, noting that the report detailed the latest review of the Council's revenue budget, along with the projections for the end of the financial year.  It was emphasised that the report highlighted the substantial financial impact of Covid-19 on the Council, noting that it was a combination of additional costs, income losses and a slippage in the savings programme as there were other priorities during the crisis. It was stated that the Council had now received nearly £6 million from the Welsh Government's hardship fund and that monthly claims valued at over £7.1 million had been received.

In terms of the loss of income, it was noted that claims for the first half of the financial year were over £5.1 million, with £4.8 million having already been received from Welsh Government. It was explained that work on quarter 3 had just been completed and had been submitted to Welsh Government.

The pressures that had been on departments this year were highlighted, noting that problems with realising savings had become increasingly prominent this year and a factor that had contributed to the overspend in the Children, Adults and Highways and Municipal fields. Attention was drawn to the summary of the position of all departments with the projections expressed including and excluding the Government's Covid-19 grant.

Attention was drawn to the substantial difficulties in some departments, noting that the Adults Department had had a significant impact as a result of Covid-19 with the department anticipating an overspend of £3.3 million this year, with a failure to realise savings worth £1.8 million. In the Children and Adults Department, it was stated that failure to realise £668k of savings had contributed towards an overspend of £2.5 million. It was added that the latest statistics confirmed a further increase in demand for services, especially in the fields of placements and Post-16.

It was stated that overspending problems in the waste collection and disposal field continued in the Highways and Municipal Department, along with difficulties in realising savings in a number of areas to the value of £811k. It was emphasised that the department was also facing an additional cost to comply with Covid-19 regulations. It was added that the Government had compensated the department for the initial months and it was expected that they would continue to compensate until the end of the year.

In the Corporate Department, it was noted that prudent assumptions when setting the 2021/22 budget were responsible for additional tax yields from Council Tax and that it contributed to the underspend on Council Tax Reductions.

Observations arising from the discussion

¾  It was noted that the Children's Department could not blame Covid entirely; however, it was noted that the department was stable. It was stated that there had been an increase in fostering placements and that fostering allowances had reduced as a result of savings. It was noted that an increase in placements was a regional and national problem. Despite the cuts, it was emphasised that the department had not undertaken any cuts on their work to ensure safeguarding matters for children and young people in the county.

¾     In terms of the Highways and Municipal Department, it was noted that the report had highlighted the main challenges of the department, noting that it was one of the departments that had received a number of cuts when it offered an essentially important service for Gwynedd residents. It was noted that a piece of work was currently underway to examine the real running costs of the department.

¾     In terms of the Environment department, it was noted that the department had achieved its work and had responded positively to the work of leading Covid-19 plans.

¾     The maturity of the Council was highlighted, noting that the Council could face overspend and that it highlighted the financial robustness of the Council. It was stressed that the Council could use its balances to ensure services for Gwynedd residents.

¾     It was noted that it was difficult to make a positive decision while the Council was continuing to undertake cuts. It was noted that Councillors and the Council were there to serve the public and not the budget. The need to maintain services was emphasised and for the Government to ensure budgets to do so.