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 approve the 2025/26 Revenue Budget.

2.     To approve the funding contributions to include the partner contributions, local
authorities’ supplementary contributions and partner interest contributions.

3.     To approve the Capital Budget for the Growth Deal.

4.     To approve the transfer of the interest received on the North Wales Growth Deal
grant balances in 2024/25 and 2025/26 to a specific reserve to fund additional government requirements, retention of the Portfolio Management Office capacity for an additional two years as well as project development costs.

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

RESOLVED

1.     To approve the 2025/26 Revenue Budget.

2.     To approve the funding contributions to include the partner contributions, local
authorities’ supplementary contributions and partner interest contributions.

3.     To approve the Capital Budget for the Growth Deal.

4.     To approve the transfer of the interest received on the North Wales Growth Deal
grant balances in 2024/25 and 2025/26 to a specific reserve to fund additional government requirements, for retention of the Portfolio Management Office capacity for an additional two years as well as project development costs.

REASONS FOR THE DECISION

In order to operate effectively within the funding available, the NWEAB requires an annual budget to be approved.

Appendix 1 sets out the proposed budget per expenditure heading and the corresponding funding streams for the year.

DISCUSSION

It was explained that the main budget of the Portfolio Management Office funded 22.75 posts, noting that two of those posts were additional posts specifically for the Digital and Smart Local Energy projects. It was also noted that a budget had been set for two non-executive directors in order to reflect the requirements of both governments. ⁠Similarly, the budgets, costs and interest contributions for Support Services, the North Wales Corporate Joint Committee, Projects and Transfers to funds matters were explained.

Attention was drawn to the fact that financial contributions from partners had increased 1.5% to reflect the out-turn inflation for 2024/25, an allowance for changes in the threshold and percentage of national insurance and the estimated salary inflation for 2025/26. However, it was confirmed that supplementary contributions from the Local Authorities had continued to be £40,000 each.

Members were guided through some of the financial contributions, confirming:

·       That the £1.35million total Growth Deal Grant had been allocated for revenue expenditure.

·       £116,000 from the Digital and Smart Local Energy projects was allocated to fund two specific posts.

·       ⁠£60,000 was capitalised on staff costs as they undertook specific work on projects.

·       ⁠The additional government posts and the costs of project developments were funded by £412,000 from the Interest Fund.

·       Approximately £61,000 was earmarked from the Reserves Fund, ensuring that £150,000 remained in that fund.

A summary of the budget for 2025/26 was provided, as well as draft budgets for the 2026/27 and 2027/28 financial years. It was explained that the additional government posts, an extension on staff contracts until March 2028 and some of the costs for project developments were funded by the interest which would be received on the Growth Deal balances during the 2024/25 and 2025/26 financial years. It was estimated that the total costs over these three financial years would be £2.7million. It was confirmed that the £3.6million of interest received until 2023/24 would continue to be used to reduce any borrowing costs in the future.

Attention was drawn to the capital budget, noting that it would be reviewed during the year as business cases were approved. A profile for the 2021/22 to 2034/35 period was shared, as well as the 2.15% of the budget that had been allocated to fund the revenue budget over the same period.

All the partners were thanked for their cooperation to ensure that the Welsh Government and the UK Government's requirements in introducing a Senior Responsible Owner (SRO) role, were funded in a timely manner. Concern was expressed regarding the approval of this report as there was a possibility for the SRO funding costs to be increased by the Governments, causing amendments to the budgets. In response to the enquiry, the Senior Operations Officer confirmed that the SRO role would be funded from the budgets of the Digital and the Smart Local Energy projects as they became operational, confirming that they were funded by the projects without causing an additional financial risk to the Board.