Agenda item

1.    The Cabinet accepted the report on the end of August 2023 review of the Revenue Budget and considered the latest financial position regarding the budgets of each department / service.

2.    It was noted that the Adults, Health and Well-being Department, the Education Department, the Highways, Engineering and YGC Department and the Environment Department had significant overspend projections this year, and in light of the exceptional overspend projections by the Adults, Health and Well-being Department, the Cabinet supported the Chief Executive's decision who has already commissioned work to explain the complex details of the Adult care picture, in order to obtain a better understanding of the issues and a clear response programme. The work will be led by the Statutory Director of Social Services.

3.    A transfer of £3,275k of underspend on Corporate budgets to the Council's Financial Strategy Reserve was approved.

The report was submitted by Cllr Ioan Thomas.

DECISION

1.    The Cabinet accepted the report at the end of August 2023 review of the Revenue Budget, and considered the latest financial position regarding the budgets of each department / service.

2.    It was noted that the Adults, Health and Well-being Department, the Education Department, Engineering and YGC and the Environment Department had significant overspend projections this year, and in light of the exceptional overspend projections by the Adults, Health and Well-being Department, the Cabinet supported the Chief Executive's decision who had already commissioned work to explain the complex details of the Adult care picture, in order to obtain a better understanding of the issues and a clear response programme. The work will be led by the Statutory Director of Social Services.

3.    A transfer of £3,275k of underspend on corporate budgets to the Council's Financial Strategy Reserve was approved.

DISCUSSION

It was explained that the report detailed the latest review of the Council's revenue budget for 2023/24, and the outlook towards the end of the financial year.

It was reported that forecasts of the review 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 and YGC and the Environment Department.

It was confirmed that the main matters and fields could be seen in Appendix 2, and that there were substantial differences. It was detailed that the main matters for 2023/24 included:

·       Adults, Health and Well-being Department – It was noted that the latest forecasts suggested that there would be £6.6 million of overspend within the Department. It was detailed that this was a combination of several factors, which included pressures on learning disabilities' supported accommodation. It was elaborated that there were higher staffing costs and rates of non-contact hours in the social care field, which had a negative impact on the recovered income. It was explained that higher fees by private providers, as well as a reduction in residents' contributions, was a factor in older people's services.

·       Education Department – It was highlighted that increasing pressures on the school taxi and bus budget this year led to a predicted overspend of £1.5m. It was suggested that work was needed on the transport field to try to reduce this overspending and take advantage of efficiency opportunities.

·       Byw’n Iach – It was confirmed that financial support for the Byw'n Iach Company had reduced to £375k this year. Compared with £550k provided to the company by the Council during the 2022/23 financial year, it was explained that this was because of a lack of income for the company during the Covid-19 pandemic.

·       Highways, Engineering and YGC Department – It was reported that a reduction in work being commissioned by external agencies had led to an overspend of approximately £1m within the highway services. It was noted that a combination of challenges affected the municipal aspects of the department, which included additional pressures on the budgets of street cleaning and cleaning public toilets, as well as loss of income in the fields of ground maintenance and public toilets.

·       Environment Department – It was noted that the annual trend of overspend in the waste collection and recycling field continued. It was explained that additional circuits had resulted in overspending on employment and fleet costs. It was elaborated that there were also additional costs when hiring vehicles. It was recognised that sickness levels and overtime hours were a problem within the service.

·       Housing and Property Department – It was noted that there was a significant trend to place intense pressures on homelessness temporary accommodation services. It was reported that £3m of council tax premium, as well as £1.4m one-off corporate Covid provision, had been allocated to address the additional costs this year.

·       Corporate Budgets – It was explained that the effect of the recent increase in interest rates had led to interest receipts worth an additional £1.8 million. It was noted that underspend on budgets assisted to alleviate the additional pressures anticipated in terms of the national increase to the salaries of Local Government employees, which would soon be confirmed.

It was confirmed that it was anticipated that use would need to be made of the Council's reserves to fund the £5.9m financial deficit anticipated for 2023/24.

It was noted that this report had been submitted to the Governance and Audit Committee and it was noted by Committee members that they were eager for the Cabinet to examine a specific action plan for the Education Department to deal with transport issues due to the historical nature of the overspend. It was elaborated that the Committee had proposed that consideration should be given to the risk in a reduction in pupil numbers in Gwynedd schools as it could lead to a reduction in future funding. The Committee's attention had also been drawn to the need to resolve problems in the waste collection and recycling services.

It was noted that inflation affected budgets, and this was not within the Council's control. The Chief Executive elaborated that additional demand for services and less funding to deliver was challenging and that difficult decisions were on the horizon. It was confirmed that the Corporate Director was leading on transport matters of the Education Department and that the Social Services Statutory Director was leading on assisting the Adults, Health and Well-being Department to reduce its overspend. It was reported that the Council's permanent bid applications would soon be submitted to the Cabinet and that £9m worth of bids had been received thus far where only a £3m budget was available to fund them.

Assurance was given that officers were aware that the needs of Gwynedd residents were the focus of all services. Despite this, it was recognised that financial matters needed to be examined robustly to be able to resolve overspending issues openly when managing to offer services of the highest standard.