Agenda item

·         Noting that there are projections of £8.3 million of overspend by Council departments, with 83% of it relating to adult and child care, to accept the report on the end of November 2024 review of the revenue budget and support the steps the Chief Executive has introduced to address the significant overspend by the Adults, Health and Well-being Department, the Children and Families Department, the Highways, Engineering and YGC Department and the Environment Department.

 

·         Delegate the right to the Head of Adults, Health and Well-being in consultation with the Head of Finance and the relevant Cabinet Members to make a number of necessary budget transfers, without limitation on the value, within services budgets in the Adults, Health and Well-being Department to reflect the current pressures, including in the field of Learning Disability, Older People, Physical Disability and Mental Health.

 

·         Approve additional financial support above the £201k contractual payment to Cwmni Byw’n Iach to be funded from the transformation fund, and to delegate the right to the Cabinet Member for Economy in consultation with the Cabinet Member for Finance, Chief Executive and Head of Finance to agree the amount of final financial support above the contractual payment to Cwmni Byw’n Iach at the end of the financial year. 

 

·         To approve the transfer of £4,409k of underspend on corporate budgets to the Council's Financial Strategy Reserve. 

 

·         Exclude clause 16.3.1.(C) of the Financial Regulations and not allow departments to carry any underspend into the next financial year.

 

The report was submitted by Cllr. ⁠Huw Wyn Jones.

 

DECISION

 

·       Noting that there are projections of £8.3 million of overspend by Council departments, with 83% of it relating to adult and child care, to accept the report on the end of November 2024 review of the revenue budget and support the steps the Chief Executive has introduced to address the significant overspend by the Adults, Health and Well-being Department, the Children and Families Department, the Highways, Engineering and YGC Department and the Environment Department.

 

·       Delegate the right to the Head of Adults, Health and Well-being in consultation with the Head of Finance and the relevant Cabinet Members to make a number of necessary budget transfers, without limitation on the value, within services budgets in the Adults, Health and Well-being Department to reflect the current pressures, including in the field of Learning Disability, Older People, Physical Disability and Mental Health.

 

·       Approve additional financial support above the £201k contractual payment to Cwmni Byw’n Iach to be funded from the transformation fund, and to delegate the right to the Cabinet Member for Economy in consultation with the Cabinet Member for Finance, Chief Executive and Head of Finance to agree the amount of final financial support above the contractual payment to Cwmni Byw’n Iach at the end of the financial year. 

 

·       To approve the transfer of £4,409k of underspend on corporate budgets to the Council's Financial Strategy Reserve. 

 

·       Exclude clause 16.3.1.(C) of the Financial Regulations and not allow departments to carry any underspend into the next financial year.

 

 

DISCUSSION

 

 Submitted - a report detailing the latest review of the Council's revenue budget for 2024/25, and the projections towards the end of the financial year with details from all departments included in Appendix 1 of the report. ⁠⁠

 It was noted that there were projections of an overspend of £8.3 million from Council departments following the end of November review, with 83% of it in the adults and children care field. In addition, it was noted that current projections suggested that five of the departments would overspend by the end of the year, with substantial overspend for the Adults, Health and Well-being Department, the Children and Families Department, Highways, Engineering and YGC Department and the Environment Department.

 

The overspend per Department was elaborated upon, noting that the Adults Department was likely to overspend £3.3 million by the end of the year, as a result of a combination of many factors, including an increase in the demand for domiciliary care provision, high staffing costs, sickness levels and high rates of non-contact hours within the internal provision. It was noted that work had already been commissioned by the Chief Executive to look at the department's financial situation with the work being addressed.

 

It was reported that the Children Department was likely to overspend by £3.7 million, with the situation having worsened since the November report. It was noted that this was mainly as a result of out-of-county placement costs, the complexity of packages and the use of unregistered placements. It was noted that the Chief Executive had commissioned work, to be led by the Statutory Director of Social Services to look at the situation in detail.

 

The Cabinet was asked for a payment above the agreed payments for Byw'n Iach Company for a sum of £201,000.

 

It was noted that a situation of £699,000 overspend was anticipated in the Highways, Engineering and YGC Department as a result of a reduction in the work commissioned by external agencies having an impact on the income of the service and there would be a likely overspend of £667,000 from the Environment Department.

 

The Head of Finance reiterated that the report had been challenged by the Governance and Audit Committee, noting that they had accepted the report, noted the financial situation and the risks, asking the Cabinet to give specific attention to the following:

·       the work being commissioned by the Chief Executive, asking for a timetable to achieve the work.

·       a clear programme is established to respond to the work regarding the Children Department and for the analysis to be submitted to the committee to be challenged.

·       information was requested about how Gwynedd compared with other authorities in terms of overspending.

 

Observations arising from the discussion:

 

·       The individual Cabinet Members elaborated upon the overspend, noting that attention was given to the overspend and the income deficit in some of the Departments, and that different steps had been taken to improve the situation.

·       It was noted that recent storms had impacted the financial situation, because additional service had to be provided in such cases.

·       Attention was also drawn to the fact that there was overspend in the departments as a result of historical budget deficit for different fields, noting that the Llechen Lân work in the Care field had already identified an increase of 18% in future spending.

·       Substantial concern was noted about the financial picture in Gwynedd and it was enquired what the impact of the system of early warnings was and whether the current projections of overspending or budget deficit were being used to draw up the 2025/26 budgets.

o   In response, it was noted that there were very difficult decisions to make when establishing the 2025/26 budget, and the demand that the services faced was a much bigger challenge than the steps taken through the 'early warning' system to freeze posts etc.

o   ⁠It was also noted that the 'overspend' term was technically correct but that it reflected the historical budget deficit which had led to two possible choices namely, to not provide necessary services or respond to requirements with associated costs. The Chief Executive noted that it was not an option to not provide the services, and that there were no cases of underspend left now to help other departments who had been overspending. It was noted that this would lead to very difficult challenges when setting the 2025/26 budget.

·       It was reiterated that preventative services such as Byw'n Iach were very important in preventing demand for more profound needs from other services such as Care and the Health Board.

·       The Leader noted a specific message to the Welsh Government that Cyngor Gwynedd's funding source was low compared with other authorities, urging them to listen and respond to the current budget deficit, especially when providing services to vulnerable people.