Agenda item

Provide an update on reports recently published by Audit Wales – ‘Financial Sustainability of Local Government’ and ‘Financial Sustainability Review – Cyngor Gwynedd’ 

DECISION:

·       To accept the National and Local report

·       To accept the Council's response to the recommendations

Note:

·       Following the receipt of CIPFA support and guidance, the response Work Programme to be submitted to the Committee by March 2026

·       Performance Reports to be submitted to Scrutiny Committees to demonstrate that the statutory requirements are being addressed

·       To correct the translations of place names in the reports

Alan Hughes and Dewi Wyn Jones (Council Business Support Service Manager) were welcomed to the meeting.

It was noted that the 'Local Government Financial Sustainability' (National Report and Local Report - Cyngor Gwynedd) reports replied to the statement that 'the financial position of local government is unsustainable in the medium-term unless action is taken'. Over the summer 2024, Audit Wales looked at the sustainability of each Council in Wales, focusing on the strategies to reinforce the long-term financial sustainability of Councils, considering Councils' understanding of their financial position and looking at Councils' reporting procedures to reinforce regular supervision of their financial sustainability.

It was explained that the national report provided some context for the financial challenges faced by Councils and summarised the key findings of the work both nationally and locally.

When referring to the main messages of the local report, a substantial increase in the number of overspending Cyngor Gwynedd Departments was noted, and despite the fact that the Council had started to develop a strategic method to establish arrangements to assess the impact of services on the residents of the County, it had not implemented a long-term strategy to support financial sustainability. It was reiterated that the Council's use of reserves was substantial, and that there was a need to consider whether the situation was stable, with budgets under pressure.

Attention was drawn to the recommendation to address the long-term financial strategy and to the Council's response form to the review.

The Head of Finance noted that the Council was considering the best way of spending within the budget, whilst seeking service continuity for the County's residents. Reference was made to the Llechen Lân Plan's objectives as an example, which was a long-term plan and a way of ascertaining the actual cost and practicality of providing services. It was accepted that there was an intention to consider similar exercises, respond to opportunities and improve efficiency. He reiterated, although the Council's financial reserves looked healthy, he accepted that there may not be a strategic enough view of their use and a review needed to be carried out to consider whether the reserves responded to the demand or existed due to historical matters.

The members thanked the officer for the report.

In response to a comment regarding delivering statutory services successfully / failure within the budget being highlighted through figures, and that success / failures to meet statutory responsibilities would not emerge until the service would face a challenge due to a failure to achieve, and whether it was possible to list all of the Council's statutory responsibilities when setting the budget; it was noted that the budget was set by prioritising what needed to be spent on the provision of statutory services. It was reiterated, in the context of the challenge of failing to achieve, that every department's performance reports would be submitted to the relevant Scrutiny Committees and that it would be possible to show that the statutory requirements were being met in this report.

In response to a question regarding the completion date of actions to implement the long-term financial strategy and whether March 2025 was a reasonable date, it was noted, following support and guidance from CIPFA, that the work of starting to draw up a work programme for the strategy would commence mid-March 2025, with the intention of introducing a detailed work programme in March 2026.

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

·        That a little more detail was needed in the action plan.

·        A suggestion to trial a zero-based budget to transform some services.

·        That the reports were useful and looked at the bigger picture.

·        That some Councils were better placed than others to cope with the financial challenges.

·        ⁠That the translation of place names on the maps in the national report needed to be corrected.

·        Accepted the Council's position regarding reserves, but for a specific purpose, and not to realise savings.

RESOLVED:

·        To accept the National and Local report

·        To accept the Council's response to the recommendations

Note:

·        Following the receipt of CIPFA support and guidance, the response Work Programme to be submitted to the Committee by March 2026.

·        Performance Reports to be submitted to Scrutiny Committees to demonstrate that the statutory requirements are being addressed.

·        To correct the translation of place names in the reports.