Agenda item

Dewi Morgan (Host Authority Head of Finance and Statutory Finance Officer) and Sian Pugh (Host Authority Assistant Head of Finance) to present the report.

1.     To note and accept the NWEAB's end of December 2024 revenue review.

2.     To note and accept the NWEAB's reserves update.

3.     To agree the NWEAB's revised capital expenditure profile.

The report was presented by the Host Authority's Head of Finance Department and Assistant Head of Finance Department.

RESOLVED

1.     To note and accept the NWEAB's end of December 2024 revenue review.

2.     To note and accept the NWEAB's reserves update.

3.     To agree the NWEAB's revised capital expenditure profile.

REASONS FOR THE DECISION

To note a projected underspend of £205,405 against the revenue budget in 2024/25. The final underspend at the end of the financial year would be used to reduce the amount claimed from the North Wales Growth Deal Grant.

To note a further slippage on the capital programme, with an estimated expenditure of £12.51m in 2024/25 compared to an approved budget of £24.67m for the year.

DISCUSSION

It was estimated that there would be an underspend of £205,000 by the end of the current financial year.

Details were given of the fields from which that underspend derived, explaining that an underspend of £43,000 was estimated in the budget of the Portfolio Management Office, confirming that the main reason for this was that the true salary inflation was approximately 3% compared with 6% estimated earlier in the financial year. It was elaborated that an extension in the budget of the Shared Prosperity Fund until March 2025 had allowed the use of underspend on the 'Plans' budget to fund the costs of three officers instead of using the core budget. Attention was drawn to the fact that an extension to March 2025 had also been accepted on the Local Area Energy project and the relevant overspend would be funded by the grant funding.

It was also explained that an underspend of £17,000 was anticipated in the 'Support Services' budget, as well as an underspend of £34,500 in the 'Joint Committee' budget.

It was reported that a net overspend of £181,000 was seen in the 'Projects' budget with approximately £136,000 of it being an overspend on external legal support costs which was essential for many of the capital programme projects. It was elaborated that the projects' 'Business Case Development' budget within this budget overspent by £86,000. It was confirmed that a £152,000 contribution from the 'Projects' budget had funded a proportion of the Smart Local Energy project.

It was confirmed that the main income streams for this financial year included contributions from partners, the North Wales Growth Deal Grant revenue allocation, the Welsh Government Energy grant, the North Wales Corporate Joint Committee staff secondment, the Shared Prosperity Fund, as well as the 'Projects' fund and the reserves fund.

It was explained that the surplus of £205,000 anticipated in the budget for this financial year was being used to reduce a contribution from the Growth Deal Grant required for this year. It was confirmed that this contribution would be transferred to the 2025/26 budget.

Pride was expressed that it was estimated that a total of almost £211,000 would be in the general reserves fund at the end of this financial year. It was elaborated that there was no money in the 'Projects' fund and it was estimated that £7.2million would be in the interest fund by the end of the financial year.

Members were guided through an update on the capital programme situation, noting that there had been a net reduction of £12.16million in the expected expenditure for this financial year. It was emphasised that this derived from a slippage on the Smart Local Energy, Holyhead Gateway and the former North Wales Hospital projects, as well as the decision to withdraw the Deeside Anaerobic Digestion Centre project. It was explained that the figures up to the 2030/31 financial year were seen in the report for the Deeside Anaerobic Digestion Centre and the Low Carbon Energy projects currently to ensure that funding was earmarked for new projects in the future, as it was not possible to confirm what those projects would be at present, ensuring that this information would be reviewed in the future to note which projects received the funding earmarked here. Attention was drawn to the fact that the expenditure on the Environmental Biotechnology Centre and the Tourism Talent Network complied with the latest capital profile.

It was highlighted that an increase in legal costs were seen during this financial year, considering whether these fees would likely continue to gradually increase in the future. In response to the observations, the Monitoring Officer confirmed that many factors had contributed to this increase in legal fees this year, including the fees for an external legal company on specialised matters associated with the projects and to fund the salaries of temporary solicitors. It was confirmed that there was a hope that these fees would reduce over the next few months as the legal service of the Host Authority conducted a recruitment process for the relevant roles. It was acknowledged that it was possible that legal fees would continue to increase for the future as the demand increased to support a higher number of project business cases as they were approved.