Agenda item

To receive the information, consider the risks arising from the forecast expenditure against the budget, and scrutinise the decisions to be presented to Cabinet regarding budget management by the Council and its departments

DECISION:

1.    To accept the report and note the situation and relevant risks in the context of the budgets of the Council and its departments

2.    Agree with the recommendation to the Cabinet:

·         To transfer of £3.275k of underspend on corporate budgets to the Council's Financial Strategy Reserve.

·         Work had already been commissioned by the Chief Executive to have a better understanding of the exceptional overspend by the Adults, Health and Well-being Department setting a clear programme in response to the situation.

To note that there was significant overspend by the Adults, Health and Well-being Department, Education Department, Highways, Engineering and YGC Department and the Environment Department.

A report was submitted by the Cabinet Member for Finance asking the committee to scrutinise the situation and relevant risks in relation to the Council's budgets and its departments. He noted his concern about overspending in the area of learning disability and the lack of income in the waste field. He took the opportunity to thank staff at the Finance Department for their work completing the information and to Committee members for their good scrutiny and collaboration.
 

The Assistant Head of Finance - Accountancy and Pensions explained that the report detailed the latest review of the Council's revenue budget for 2023/24, and the forecasts for the end of the financial year. The report would be presented to the Cabinet on 7 November 2023.

Following the end of August review, it was noted that the forecasts suggested that nine out of the ten departments would overspend by the end of the year, with significant overspending by the Adults, Health and Well-being Department, Education Department, Highways, Engineering Department and YGC and the Environment Department. It was explained that in recent years there had been regular reporting of risks to achieve some savings schemes, most prominent in the Adults, Health and Well-being Department and in the field of Waste. Following a recent review of the unrealised savings, it was decided to scrap £2 million worth of savings schemes by using the savings risk provision to fund this. Therefore, the report reported on the financial situation following the removal of those savings.

Attention was drawn to the main matters:

·         Adults, Health and Well-being Department - the latest forecasts suggested £6.6 million overspend, which was a combination of several factors including several new cases and costly supported accommodation cases in the learning disability service.  In the context of community care, it was noted that there were higher staffing costs and rates of non-contact hours and, therefore, had a negative impact on the recovered income. In the context of older people's services, there had been higher fees from private providers. but a reduction in the increasing use of agency staff in various areas that also contributed to the overspending.

·         Education Department - there was a trend of increasing pressures on the school taxi and bus budget that was becoming more pronounced this year, with a predicted overspend of £1.5m. It was noted that the transport field had already been undergoing a strategic review to try to control the increase in expenditure, and it was suggested that further work was needed to try and reduce overspending and take advantage of efficiency opportunities.

·         Byw'n Iach – with Covid having had an impact on the Byw'n Iach Company's income, in 2022/23 the Council provided £550k in financial support to Byw'n Iach to enable them to maintain their services. It was reported that the financial support would continue this year and the required amount had reduced to £375k.

·         Highways, Engineering Department and YGC - an overspend of nearly one million was forecast by the department, with a reduction in the work being commissioned by external agencies negatively impacting the income of highway services. In the context of the municipal services field there was a combination of reasons, which included additional pressure on street cleaning budgets and cleaning public toilets. It was also noted that there were income losses with ground maintenance and public toilets, but an increase in income from bereavement services which reduced the overspending.

·         Environment Department – that the annual trend of overspending in waste collection and recycling continued. This was identified as a combination of additional routes that have resulted in overspending on employment and fleet costs, sickness levels and overtime plus additional costs of vehicle hire.

·         Housing and Property – there was a continuing trend of significant and intense pressure on homelessness temporary accommodation services; this year £3m of Council Tax Premium was allocated along with a one-time £1.4m allocation of corporate Covid provision to address the extra costs.

·         Corporate - that there were prudent assumptions when setting the 2023/24 budget and a reduction in the numbers who have claimed council tax reduction compared to previous years. The impact of the recent increase in interest rates had led to the receipt of interest worth an additional £1.8 million and the impact of the current treasury management policy had made external lending avoidable. It was added that underspending on other budgets helped ease anticipated additional pressures. (The national increase in pay for Local Government employees was yet to be confirmed).

·         It was anticipated that the Council's reserves would have to be used to fund the £5.9 million funding deficit for 2023/24.

The Cabinet Member for Finance's wish for the Committee to scrutinise the situation and risks in relation to the Council's budgets and its departments was noted and to recommended to Cabinet that they approve the reports.

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

·         The Cabinet needed to look at the Education Department's specific action plan to deal with transport issues. Whilst accepting that inflation and recent re-tender costs of £833,000 had added to the problem, the issue was historic and required an innovative plan to take it forward.

·         Recycling issues needed to be solved

·         That a method of charging the Airbnb service to raise income for the Council needed to be considered

·         There was a need to consider the risk in the reduction of pupil numbers in Gwynedd schools and this therefore would lead to a reduction in future funding

·         There was a need to ensure that the funds from the second homes premium were only used for the homeless service

RESOLVED

1.    To accept the report and note the situation and relevant risks in the context of the Council's budgets and its departments

2.    To agree with the recommendation to the Cabinet:

·         To transfer £3,275k of underspend on corporate budgets to the Council’s Financial Strategy Reserve Fund

·         That work had already been commissioned by the Chief Executive to gain a better understanding of exceptional overspending by the Adults, Health and Well-being Department, setting out a clear programme in response to the situation

Note: there was significant overspending by the Adults, Health and Well-being Department, Education Department,  Highways, Engineering and YGC Department and the Environment Department.