Agenda item

To consider the information, the risks arising from the strategy, and scrutinise the Cabinet’s decisions

DECISION:

·         To accept the report

·         To note the timetable, the projections and relevant risks in the context of the Council's budget

·         To accept the Cabinet's decisions (28 September 2021)

A report was submitted at the request of the Cabinet Member for Finance, noting the timetable, projections and relevant risks in relation to the Council's budget strategy to the Committee. The context of the report was set out, highlighting that the Cabinet should consider the report from 28 September 2021. The Cabinet decided to approve the procedure and timetable for producing the Budget for 2022/23, noting that if there was a funding gap in balancing the 2022/23 budget, the Council would use contingency budgets and reserves to mitigate resource losses in the short-term, and assess the situation before identifying any additional savings required during the summer of 2022. Also, the Cabinet decided to accept the contents of the report as the Council's Medium Term Financial Plan, while noting that financial planning was extremely challenging.

It was noted that there were a number of bids for additional resources this year as a result of additional pressures on the Council's services. It was noted that the Council's main financial source was the Welsh Government Grant and that the Government had noted its intention to publish a 2022/23 draft settlement for local authorities on 21 December, and the final settlement on 2 March 2022. It was explained that the timetable was very challenging and that there was financial uncertainty as a result of the pandemic.

The Cabinet Member for Finance emphasised the importance of the virtual seminars on the budget for members in January, and he encouraged everyone to attend the sessions.

The Head of the Finance Department noted that there was a request to minimise any change between the draft settlement and the final grant settlement, as it was difficult, under the current circumstances, to plan for 2022/23. He added that Covid figures remained high in Gwynedd and that there was currently no clear indication when the country and the world would recover. He referred to the support of the Hardship Fund that was currently funding additional significant costs in the fields of homelessness, care and free school meals, but stated his concern that arose from the Minister for Finance and Local Government's statement that there would be no Hardship Fund from April 2022 onwards. Consequently, the Council's ability to continue to fund the above services on a higher level was dependent on an additional funding allocation in the settlement.

Reference were made to assumptions that set three scenarios - best, medium and worst, within reason. Although they were broad assumptions, it was noted that the Council's financial position was robust, and healthy reserves meant that these funds could be used to mitigate the short term situation. Attention was drawn to the challenges that would face the Council, which included Covid recovery, an inflationary increase in salaries, national insurance, the cost of fuel etc.

It was expressed that there was no reason to adapt the strategy, as there was currently insufficient evidence to do so.

Thanks were expressed for the report

During the discussion, members raised the following matters:-

·         The recommendation to use reserves to mitigate the situation was a very positive step in the short-term.

·         Agreement with the use of reserves in order to avoid cuts.

·         Has consideration been given to the implications of new ways of working?

·         There was a robust and successful procedure of monitoring savings - it would be easy to use reserves - a message should be shared with departments noting, although there were no new planned savings, that the Council would need to work effectively, and it was suggested that efficiency arrangements should be put in place.

In response to a question about the future impact of Covid on the Council's budgets, the Head of Finance Department noted that Covid had meant a significantly higher expenditure over the past 18 months. However, Gwynedd had been able to claim an extremely respectable sum from the Hardship Fund. The Council decided early during the pandemic to prioritise the County's residents' health and safety, and as the Government later stepped in with contributions, Gwynedd's budgets were in a favourable position by the end of 2020/21, with the reserves available to deal with the potential of a financial blow in 2022/23.

In response to a comment regarding the savings relating to office running costs and travel expenses, it was noted that travel costs of elected members and staff were not significant in the context of the Council's entire budget, and that there had been no huge reduction in these costs as care staff and other external staff had continued to travel in order to fulfil their duties.

In relation to establishing efficiency arrangements, it was suggested that there was always room for improvement, even in a crisis. It was considered that the approach should not be hurried, that historical savings should continue to be monitored, with an emphasis on departments taking ownership.

RESOLVED

·         To accept the report

·         To note the timetable, the forecasts and relevant risks in the context of the Council's budget

·         To accept the Cabinet's decisions (28 September 2021)