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 report
·
To note the situation and the relevant risks in the context
of the Council’s budgets and its departments
Minutes:
Submitted - the report of the Cabinet Member for Finance, Councillor Ioan Thomas, requesting
that the Committee noted the position and relevant risks
in respect of the Council's budgets and those of its
departments, considered the
Cabinet's decisions of 12 October, 2021 and provided comments as required.
The Cabinet Member for
Finance set out the context
for the report, noting the following: -
·
That the significant
financial impact of Covid-19 continued in 2021/22, which was a combination of
additional costs, income losses (equating to over £20 million in 2020/21) as
the Council had given priority to safeguarding the health and lives of the people
of Gwynedd in response to the crisis.
·
Despite creating an
amended programme of savings for 2021/22 by abolishing, slipping and
re-profiling savings schemes in January 2021, there remained a delay in
implementing savings in some fields, with a delay as a result of the crisis an
evident factor. It was noted that there was a significant overspend in the
Adults, Health and Well-being Department and the Highways and Municipal
Department whilst there was a marked improvement in the projections of the
Children and Families Department.
·
Applications for
compensation from Welsh Government's Hardship Fund were being submitted on a
monthly basis.
·
The Cabinet had
accepted all the recommendations noted in the report to the Cabinet on
12-20-21.
The Senior Finance Manager referred
to a summary of the final position of all departments and highlighted the fields where there
had been significant differences.
·
An overspend of £1.4
million was projected in the Adults, Health and Well-being Department, with a
failure to realise savings worth £855k being an obvious factor of the
overspend. It was expressed that covid had had a
substantial impact on the department and £1.3 million had already been claimed
from the Welsh Government towards the additional costs for the period.
·
Following the
Council's decision to allocate £1.8 million in additional funding to the
Children and Families Department in the 2021/22 funding cycle, as well as
abolish savings schemes to the value of £1.1 million it was highlighted that
the current financial projections for the department were very promising.
·
It was stated that
overspend problems in the waste collection and disposal field continued within
the Highways and Municipal Department. It was noted that there had been
difficulties in realising savings in a number of areas to the value of £673k
and the department had faced additional costs responding to covid.
Nevertheless, it was reiterated that Welsh Government had already compensated
them and it was expected that it would continue to compensate them for the
remainder of the year.
·
It was noted that
corporately there were prudent projections when setting the 2021/22 budget that
were responsible for additional tax outputs and contributed to the underspend
on Council Tax Reductions.
The members expressed their thanks for the report.
During the ensuing discussion, the following observations were made by members:
·
It appeared that covid was being blamed for everything - were we looking at
the picture properly? Were we certain that departments’ management were on top
of their work? That the situation was not buckling under pressure due to home
working?
·
What was the risk
that the Government would refuse further compensation if it appeared that covid was being used as an excuse within departments?
·
Gwynedd was a
destination for retired residents who had not contributed to the area - a
serious challenge especially to the costs of the Adults, Health and Well-being
Department?
·
Overspend in the
Adults, Health and Well-being Department and the Children and Supporting
Families Department was not new - the overspend existed before covid and the situation was likely to be exacerbated due to
covid - was there a need to place more pressure on
the government and seek more funding?
In response to the comments, the Head of Finance Department noted:
·
That the Corporate
Management Team reviewed the service continuation level every fortnight and
monitored the levels of financial concerns as concerns were continuing, more
problems were arising and there were requests for support from department to
department due to the pressures of the crisis. It was noted that the report was
heartening on the whole and the situation was comparatively satisfactory with a
mandate from the Cabinet to the Chief Executive and the Head of Finance
Department to get to the root of the problems in both departments to
seek a solution - he agreed there was a need to take a look at the position and
the failure to realise the savings
·
Information about
the allocation of the basic grant for 2022/23 would be received in December
2021 and the Council's position was robust enough to bridge short-term schemes
should the grant be lower than expected. It was reiterated there was an
opportunity to weigh up the situation and establishing a New Council in May
2022 would be a good opportunity to re-discuss the savings. It was noted that
the grant received from the Welsh Government Hardship Fund was significant and
was currently funding homelessness, care and free school meals. It was
highlighted that the relevant Welsh Government Minister, Rebeca Evans, had
stated that there would be no Hardship Fund from April 2022, unless
circumstances change. It was noted that local authority representatives had
conveyed concerns and risks to Government, and that if the fund ceased, an
appropriate addition to the 2022/23 grant settlement would be required.
·
There was an element
of recognition in the grant for the number of older people along with pupil
numbers. That the Council's decision to increase council tax by 100% on second
homes was proof that the Council was doing its utmost to find contributions
towards costs.
·
There was now
stability in the Children's Service through securing the right budget and grant
bids. The Adults, Health and Well-being Service and the Highways and Municipal
Department were to receive further attention over the next few months. It was
noted that there were fair estimates in terms of the savings budget and it was
suggested that those savings that had not been delivered could possibly be a management
issue - the situation was down to failure to act rather than incorrect
budgeting.
RESOLVED
·
To accept the report
·
To note the situation and the relevant risks in the context of the
Council’s budgets and its departments.
Supporting documents: