Agenda item

To note the position and the relevant risks regarding the budgets of the Council and its departments and comment as necessary.

DECISION:

·       To accept the report.

·       To note the relevant risks.

·       To support the Cabinet's decision (14 May 2024) to approve the amounts to be carried forward; to approve all recommendations and financial virements.

Note:

Provide information about those schools with a deficit at the end of the financial year and the relevant sums.

The Cabinet Member for Finance highlighted that the report had been submitted to the Cabinet on 14 May 2024 where the virements had been approved. The Committee was asked to scrutinise and offer observations on the decision.

It was noted that the report detailed the Council's expenditure in 2023/24, the out-turn underspend or overspend position of individual departments, and the reasons for that. References were made to a summary of the final position of all departments which highlighted the amounts to be carried forward at the end of the financial year, as well as the main matters and fields where there were substantial differences. The following was highlighted,

·         Adults, Health and Well-being Department: A reduction was seen in the overspend to £3.9 million compared to the end of November review, as the department had received grants and income since the last review, which had assisted the situation. It was noted that there was £1.8 million overspend due to increasing and costly supported accommodation costs in the Learning Disabilities Service. In the field of Domiciliary Care, staffing costs and sickness levels and non-contact hours are high, whilst there are pressures on the budget for private domiciliary care providers. It was noted that a bid of £1.6 million to increase the budget to deal with the Learning Disability Services had been made, as well as work being in the pipeline to seek better control of the budgets – the overspend was excessive and therefore this had to be addressed.

·         Children’s Department: Since the November review, the Department's overspend has increased by £1.3 million to £2.6 million, because of an increase in the costs of out-of-county placements due to the complexity of packages and the recent increased use of non-registered placements, which were more costly. It was hoped to seek a procedure to internalise the service so that the overspend could be addressed. Pressures could also be seen on the Derwen Service budget.

·         Education Department: A trend of increasing pressure on the school taxi and bus budget continued with an overspend of £1.5 million at the end of the year. There was a strategic review for the situation planned, with a designated officer appointed to deal with this. Staff turnover, income and grant receipts, and less pressure on other budgets reduced the overspend to £95,000. The department was using £95,000 from its departmental underspend fund to balance the overspend.

·         Economy Department / Byw’n Iach. In 2022/23, the Council had provided £550k financial support to Byw'n Iach above the contracted payment of the provision contract, to enable it to maintain its services and remain viable as a company. ⁠The financial support continued this year, and the required amount had reduced to £308,000.  Anticipate that there will be no need for support in the future.

·         Highways and Municipal Department:  An overspend of £687k due to pressures on the road maintenance and lighting budget and a reduction in the work being commissioned by external agencies. In municipal, additional pressure can be seen on staff budgets and a loss of income. Nevertheless, Gwynedd Consultancy exceeded the budget.

·         ⁠Environment Department: The trend of overspend in the field of waste and recycling collection continued and was £1.2 million by the end of the year. The Department was implementing the WRAP Cymru recommendations in an attempt to address the overspend. Also, a deficit of £601,000 in parking income.

·         Housing and Property Department: The trend of significant pressure on temporary accommodation in homelessness services continued to be very intense with an overspend of £2m (despite an additional budget of £3m from council tax premium and a grant of £597k from the Government having been allocated to the field). Homelessness was a significant problem and was creating substantial overspending pressures. Using a one-off allocation of £1.4m from the corporate Covid provision and the departmental underspend fund reduces the overspend reported for the department to £255k.

·         Schools: The total county school balances had reduced by £3.4 million, namely £11.9m in 2022/23 to £8.5 million in 2023/24. It was noted that there had been a significant increase in school balances in recent years due to the receipt of significant grants, but it was anticipated that they would be back to usual levels by the end of 2024/25.

·         There had been a sufficiency review of the Council's specific funds when closing the accounts and it had been possible to harvest £2.8 million of resources.

In terms of the next steps, it was noted that work was in the pipeline to complete the statutory financial statements for 2023/24 to be submitted to Audit Wales for audit.

Members expressed their thanks for the report and noted that the period was very challenging for services.

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

·         That receiving continuous reports on the situation was beneficial, but the Council had substantial overspend – fortunate of its reserves.

·         That there was a risk for the overspend to worsen in the longer term with problems anticipated with the increase in the number of older people leading to an increase in the use of services and therefore increasing the budgetary risk in the future – a suggestion to externalise services.

·         That overspending in some areas was the result of underfunding – high expectations with little investment.

·         Including the sums of those schools that were in deficit at the end of the financial year would provide a better understanding of the situation.

·         That the cuts had reached a critical and difficult point.

·         In the context of homelessness, there is a need to understand the situation and receive information regarding numbers. A suggestion to consider holding an information session for committee members to understand the field better and to understand the reasons why the cost is so high.

In response to these observations, the Cabinet Member noted that the main reason for the overspend was that there is an insufficient budget and cuts were becoming more difficult every year, which was reflected in new overspend fields. He reiterated that work was in the pipeline to deal with the overspend with steps to manage it by means of an early warning procedure added to reports. He also noted that financial pressures placed pressures on services which in turn led to loss of service and therefore impacted the residents of Gwynedd, as a result of underfunding from Central Government.

RESOLVED

·         To accept the report

·         To note the relevant risks.

·         To support the Cabinet's decision (14 May 2024) to approve the amounts to be carried forward; to approve all recommendations and financial virements.

Note:

·         Provide information about those schools with a deficit at the end of the financial year and the relevant sums.

·         Consider holding an information session for committee members to understand the field better and to understand the reasons why the cost is so high.