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
Decision:
To accept the information
To accept the Cabinet’s decision (26/01/21)
regarding budget management by the Council and its departments
Minutes:
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.
·
To accept the
information
·
To accept the Council's
decision (26/01/21) regarding budget management by the Council and its
departments
Supporting documents: