Agenda item

To receive the information, consider the risks arising from the forecast expenditure against the budget, and scrutinise the Cabinet’s decisions regarding budget management by the Council and its departments

To accept the information

To accept the Cabinet’s decision (26/01/21) regarding budget management by the Council and its departments

A report was submitted by the Senior Finance Manager, detailing the latest review of the Council's revenue budget for 2020/21, and the projections towards the end of the financial year.

It was noted that the financial impact of Covid-19 was substantial for the Council - a combination of additional costs, loss of income and slippage in the savings programme as there were other priorities during the crisis period. It was reiterated that Welsh Government had established a hardship fund to compensate for Local Authority costs and income losses. It was highlighted in Gwynedd that monthly applications to the value of over £7.1 million had been submitted by the Accountants to Welsh Government, to compensate the Council for the additional expenditure for the period up to the end of November, with funding of almost £6 million already received.

It was reported, in terms of income losses, that the applications for the first half of the financial year was over £5.1 million, with £4.8 million already received by Welsh Government. Work on quarter 3 had been completed by the Accountants and had been submitted to Welsh Government mid-January.

It was highlighted that there was obvious pressure on the departments this year, and as forewarned in every review since the end of August 2019, problems with generating savings were increasing and was a factor that contributed to overspending in fields such as Children, Adults and Highways and Municipal.

Attention was drawn to an epitome of the final position of all departments with the projections stated including and excluding the Government's Covid-19 grant aid, so that it was possible to see the impact on the various departments. The following main matters were highlighted:

·         Adults, Health and Well-being Department - the impact of Covid-19 had been substantial ion the Adults, Health and Well-being Department this year, which is worth over £3 million by the end of November. Without considering the impact of Covid-19, an overspend of £3.3 million is anticipated this year, along with a failure to realise savings to the value of £1.8 million contributing to this situation.

·         Children and Families Department - an overspend of £2.5 million is anticipated for the Department. A failure to realise savings of £688k contributes to the situation. The latest statistics confirm that there has been a further increase in demand for services, especially in with placements and Post-16. The increased spending in the children's field was concerning.

·         Highways and Municipal Department - overspend problems in the field of waste collection and disposal continue. Difficulties in realising savings in a number of fields to the value of £811k. The department has also faced additional costs relating to Covid-19 in order to comply with regulations, with Welsh Government already providing compensation for the initial months and the expectation that they will continue to compensate for the rest of the year.

·         Corporate - prudent projections when setting the 2020/21 budget responsible for additional tax outputs on Council Tax and also contributing to the underspend on Council Tax Reductions. Net underspend on budgets including capital costs and bid returns.

Reference was made to the decision of the Cabinet (26 January 2020) to accept the recommendations and Welsh Government was thanked for the support

Members expressed their thanks for the report.

In response to a comment regarding overspend in the Children and Families Department with projections for further overspend, the Head of Finance noted that the number of child placements was higher, with more children being looked after and the number intensifying in an emergency.  He highlighted that the nature of the care was different and more expensive and therefore it was difficult to achieve a saving. He reiterated that the hope, following the crisis, was to see fewer restrictions, the courts reopening and the number of cases reducing. Consequently, this will lead to an improvement and a reduction in expenditure. He noted that discussions were also being held with similar Authorities to seek solutions to the situation in the future.

            During the ensuing discussion, Members noted the following matters:

·         That the overspend of some departments was historic.

·         That the crisis was a challenging and difficult time for children and families - unlikely that problems would disappear overnight

·         Reiterated gratitude to Welsh Government for the additional funding

·         Reiterated gratitude to all staff in the departments for completing applications for additional financial aid.

In response to a question regarding the Cabinet's decision to 'gain better understanding' of the matters associated with a substantial overspend in the Adults and Well-being Department and Children and Families Department, and if a timetable had been set for this, it was noted that work had commenced but had failed to continue due to priorities raised as a result of the crisis. It was reiterated that new systems were in place that gathered information better and so they were aware of the need to collaborate with the departments to consider and analyse the statistics.

          RESOLVED

·         To accept the information

·         To accept the Council's decision (26/01/21) regarding budget management by the Council and its departments