Agenda item

To consider the report.

1.     To note the NWEAB out-turn report for 2024/25 which includes the use of £714,395 from the North Wales Growth Deal grant to demonstrate a neutral position for the year.

2.     To note the position of NWEAB's funds.

3.     To note NWEAB's end of year capital review on 31 March 2025.

 

The report was presented by the Statutory Finance Officer.

 

RESOLVED

 

1.     To note the NWEAB out-turn report for 2024/25 which includes the use of £714,395 from the North Wales Growth Deal grant to demonstrate a neutral position for the year.

2.     To note the position of NWEAB's funds.

3.     To note NWEAB's end of year capital review on 31 March 2025.

 

REASONS FOR THE DECISION

 

To inform the Economic Well-being Sub-Committee of the financial position of the NWEAB for revenue and capital in 2024/25.

 

The role and function of the NWEAB was transferred to the CJC on 1 April 2025, which included staff, resources, commitments and financial assets, including the Growth Deal and funding.

 

DISCUSSION

 

The Report was presented for information purposes to the Sub-committee, confirming that it would be presented to the Corporate Joint Committee at its meeting on 13 March 2025 for approval.

 

It was reported that the final revenue out-turn position for the year 2024/25 was an underspend of approximately £386,000. It was explained that this underspend was an increase on the underspend anticipated when reporting on the position in December 2024, which was approximately £205,000. Details were provided on the main headings of the budget as follows:

 

·       Portfolio Management Office - It was explained that the final net underspend on this heading is £75,140 as a result of an underspend on employee expenditure. It was elaborated that the true salary inflation in 2024/25 was 3%, where an increase of 6% had been budgeted. Attention was drawn to the fact that an extension to the Shared Prosperity Fund budget until the end of March 2025 had allowed three officers to be funded within the UKSPF heading instead of the core budget as budgeted.

·       Employee Expenditure - It was noted that part of the underspend within this heading had been used to fund temporary advisory staff whilst work was being done to appoint a Programme Manager after the post became vacant.

·       Support Services by the Accountable Body - Reference was made to the underspend of £41,730 which mainly derived from underspend on support from the Finance Service.

·       ⁠Joint Committee - It was reported that there was an underspend of £48,935 in this heading, with an underspend seen on every relevant line of the budget within the heading.

·       Projects - It was explained that the final net underspend on this heading was £65,034 as a result of capitalised costs previously considered within the 'Developing Project Business Cases' budget line. ⁠Despite this, it was acknowledged that a high demand for external legal advice on many projects had led to overspending within the 'Developing Project Business Cases' line.

·       Grants - It was noted that an overspend was seen in the Local Area Energy and the Shared Prosperity Fund projects. It was elaborated that an extension on both projects until the end of March 2025 had led to a net overspend of £96,820. It was explained that the overspend associated with the Local Area Energy project was being funded by the remaining grant funding. It was elaborated that the underspend seen as part of the plans associated with the Shared Prosperity Fund was being used to fund the overspend on the Fund's employee costs, as well as contribute towards the overheads of the Portfolio Management Office.

·       Transfers to Reserve Funds - It was noted that there was an unbudgeted expenditure of £2.8million within this field. It was explained that the North Wales Economic Ambition Board had approved the use of the interest accrued on the Growth Deal Balances in 2024/25 to fund additional roles in accordance with the requirements of the governments, as well as project development costs from 2025/26 and to retain the Portfolio Management Office's current resources for two additional years beyond March 2026. Attention was drawn to the fact that this heading confirmed that the interest received on balances during 2024/25 would be transferred to specific Resources Fund to fund these costs.

 

The main income streams were listed for 2024/25, namely contributions from partners, the North Wales Growth Deal grant revenue allocation, contribution from the Corporate Joint Committee for staff secondment, the Welsh Government energy grant, the UK Shared Prosperity Fund and the earmarked reserves fund.

 

It was explained that £1.1million had been budgeted to draw down from the North Wales Growth Deal Grant for revenue costs, namely the 2.15% that the governments had agreed could be used. However, to leave a neutral situation for the year, it was recommended to take £714,000 from the Growth Deal Grant instead of the £1.1million budgeted.

 

It was reported that there had been £211,000 in the Reserve Fund on 31 March 2025, reminding the Members that the North Wales Economic Ambition Board had approved the use of £61,000 from this fund as part of the 2025/26 budget, at its meeting on 14 February this year.

 

Attention was drawn to the fact that there was a total of £29,000 in the Projects Fund at the end of March 2025 and that officers had received the board's approval to use this fund to fund the costs of the Local Energy project ('Developing Project Business Case'). It was confirmed that these costs had been capitalised but that these costs had been funded from the Project Fund reserves as the Full Business Case had not been approved currently.

 

It was confirmed that the balance of the Interest Fund on 31 March 2025 was £4.7million. Furthermore, it was confirmed that there was £2.8million in the Resources Fund at the end of the financial year following the transfer of the interest received on the Growth Deal Fund during the year.

 

Reference was made to the end-of-year review of the Capital Programme 2024/25, confirming that there had been a net reduction of £13.3million in the spending due to a slippage on four projects. It was detailed that these projects were the Digital Signal Processing Centre, Smart Local Energy, Holyhead Port and the Former North Wales Hospital Site. It was also noted that revoking the Deeside Anaerobic Centre had also contributed to this reduction. ⁠It was confirmed that work on the Centre for Environmental Biotechnology, Enterprise Engineering and Optics Centre and the Tourism Talent Network projects had pushed a proportion of their profile expenditure forward.

 

In response to an enquiry on comparing the statistics presented in the report with the last few years, the Statutory Finance Officer confirmed that reporting on revenue matters happened on a financial year basis. However, it was confirmed that officers would be able to compare the financial situation with the last few years for comparison when presenting statements of draft accounts to the Corporate Joint Committee. Attention was drawn to the fact that capital matters already showed comparisons over a wide range of years.