Agenda item

To consider the report and 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 report and note the relevant risks in the context of the budgets of the Council and its Departments.

·         To accept the Cabinet's decision 18/01/2022

A report was presented by the Senior Finance Manager, detailing the latest review of the Council's revenue budget for 2021/22, and the projections for the end of the financial year.

It was noted that the financial impact of Covid-19 had been substantial for the Council - a combination of additional costs, loss of income (to the value of over £20 million in 2020/21 and £10 million this year to date). It was added that applications for compensation from Welsh Government's Hardship Fund were being submitted on a monthly basis.

Despite creating an amended programme of savings for 2021/22 by cancelling, slipping and re-profiling savings schemes in January 2021, it was explained that there remained a delay in implementing savings in some fields, with delays as a result of the crisis an evident factor. Attention was drawn to a summary of the final position of all departments and further details of the main matters where there had been significant differences, and recommendations.

·         Adults, Health and Well-being Department - an overspend of almost £1 million was forecast this year (£995k), with a failure to realise savings worth £855k being an obvious factor of the overspend. The main overspend fields - older people, learning disabilities and community care services with the impact of Covid remaining to have a significant impact on the Department. Again this year, a value of over £3 million had been claimed from the Welsh Government for the additional costs for the period. Bids to the value of over £1.6 million had been approved for the increasing pressure on the 2021/22 budget at the beginning of the financial year.

·         Children and Families Department - £1.8 million in additional funding had been allocated to the Children and Families department in the 2021/22 funding cycle in order to meet the increasing pressure, as well as cancelling savings schemes to the value of £1.1 million that had not been achieved. Subsequently, the current financial projections were very promising. 

·         Highways and Municipal Department – overspend problems in the field of waste collection and disposal continued, and difficulties in realising financial savings in a number of fields (to the value of £666k). The department had also faced additional costs relating to Covid, but was confident that the Welsh Government would continue to compensate for the rest of the year.

·         Corporate - prudent projections when setting the 2021/22 budget were responsible for additional tax yields and contributed to the underspend on Council Tax Reductions - the pressures on a number of budgets were not as severe as had been anticipated this year.

It was added that the Council's financial position was balanced as a result of an underspend on Corporate budgets and underspends by the majority of departments.

Thanks were expressed for the report.

During the ensuing discussion, the following observations were made by members:

·         The Head of Highways and Municipal had appeared before the Controls Improvement Working Group to discuss improving compliance with the controls and/or introducing new controls to reduce the risks the service was vulnerable to - had this been completed?

·         Was it possible to analyse overspend problems in order to examine the long-term overspend projections (e.g. increases in fleet costs, costs of treating more waste etc.) separately to savings matters? This could highlight savings or the need to reconsider the budget

·         Was there sufficient money in the budget, given that the same headings arose each year, while accepting that setting a budget for the Adults and Well-being Service was difficult.

In response to the observations, it was noted that the Adults, Health and Well-being Department were overspending due to a delay in realising savings - Adults, Health and Well-being had schemes to the value of £855k, while Highways and Municipal Department had £666k.  Attention was drawn to the list of bids, and it was noted that consideration had been given to the pressures on services during the year as part of the bid arrangements, that the bids had then been effectively prioritised, in the hope that the funding would reach the areas of greatest need. It was added that this had succeeded when prioritising the 2021/22 bids for the Children and Families Department

In response to a question about the mandate from the Cabinet for the Chief Executive and the Head of Finance Department to get to the root of the problems in the Adults, Health and Well-being Department, it was confirmed that the system for gathering data and financial information was now operational and had improved the situation.

RESOLVED

·         To accept the report and note the relevant risks in the context of the budgets of the Council and its Departments.

·         To accept the Cabinet's decision 18/01/2022