Agenda item

Dafydd L Edwards, Host Authority Statutory Finance Officer and Sian Pugh, Host Authority Group Accountant to provide details of the actual revenue expenditure and income for the second quarter of the 2021/22 financial year as well as projected full year out-turn against its annual budget.

1. ⁠To receive and note the NWEAB Joint-Committee’s revenue and capital second quarter review for 2020/21.

2. To acknowledge the receipt and proposed use of the £500,000 for the Whole System Business Research Innovation for Decarbonisation (WBRID) grant, in line with the award of funding letter that was received by Welsh Government in June 2021.

3. To approve the use of a specific earmarked reserve to hold the partner interest contributions received, to set against the cost of borrowing required to fund the negative cash flow in future years.

The report was submitted by Sian Pugh (Group Accountant - Corporate and Projects).

RESOLVED

1.    To receive and note the NWEAB Joint-Committee’s revenue and capital second quarter review for 2020/21.

2.    To acknowledge the receipt and proposed use of the £500,000 for the Whole System Business Research Innovation for Decarbonisation (WBRID) grant, in line with the award of funding letter that was received by Welsh Government in June 2021. 

3.    To approve the use of a specific earmarked reserve to hold the partner interest contributions received, to set against the cost of borrowing required to fund the negative cash flow in future years.

REASONS FOR THE DECISION

To note a forecast underspend of £183,178 against the revenue budget in 2021/22. Any underspend at the end of the financial year may be transferred to the earmarked reserve.

To note a slippage on the capital programme which means that it will now be running for an extra three years to 2028/29 

DISCUSSION

The report was submitted noting that it was a financial review for the second quarter of the year. It was noted that the department estimated an underspend of £128k on the Portfolio Management Office heading. It was explained that this was as a result of delays in recruiting to jobs. It was noted that the Support Services heading showed an underspend of £7k as a result of underspend on the Insurance heading. This was because the NWEAB's Insurance had been incorporated within the Gwynedd Council Insurance policies.

It was explained that an underspend of £18k was estimated on the Joint-Committee heading, and that this was as a result of receiving a specific grant from Welsh Government to fund some aspects of the work undertaken by legal consultants.

In terms of projects, it was noted that the expenditure on this heading must be considered in the context of the decarbonisation grant of half a million. It was noted that the award of funding letter for this grant had not been received until June 2021, and therefore had not been included in the budget. Attention was drawn to an underspend of £40k on the external legal support and assurance headings and that this was as a result of slippage on the capital programme.

It was also noted that the partners' inflation contributions of £678k reflected the figures presented to the Board in October 2020 and March 2021, and the Board was asked to approve the use of the specific reserve fund to allocate this money to fund the average cost of borrowing over the lifetime of the growth deal. It was explained that once confirmation was received from Welsh Government, the inflation contributions will be recalculated to reflect the amended cost of borrowing.

It was noted that income sources for 2021/22 included partner contributions, ESF Grant, North Wales Growth Deal Grant, Decarbonisation Grant and the reserve fund. It was noted that this left an estimated position for 2021/22 of an underspend of £183k, and it was currently anticipated that there would be a balance of £507k in the reserve fund at the end of the financial year.

In terms of the capital review, it was originally noted that they anticipated that the capital programme would run from 2021/22 to 2025/26 but it was noted that a slippage was likely on some of the projects which would mean that the programme would run for an additional three years. It was noted that there was a slippage of £13.21 million in 2021/22, £42.49 million in 2022/23 and £21.43 million in 2023/24. It was explained that the North Wales Growth Deal grant would be used to fund the Capital Programme in 2021/22 and 2022/23 and that no external borrowing would be needed until 2023/24. 

During the discussion, the following matters were raised:-

¾     The Head of Finance added that the situation general was acceptable and that the underspend as well as the slippage was unavoidable with the situation as it was. It had been noted in May that the Board had approved the Annual Return and that Audit Wales had stated that it was a clean return. It was noted that next year's position remained uncertain.

¾     The department was thanked for all their work.