Agenda item

Dewi A. Morgan, Head of Finance (CJC’s Statutory Finance Officer) and Sian Pugh, Assistant Head of Finance to present the report.

The information and the decisions sought were considered.

The report was presented detailing the out-turn position of the Strategic Planning, Transport and Corporate elements. It was confirmed that the total net out-turn position for these elements was an underspend of £1.067 million, and that £600k of this underspend stemmed from grants received from the Welsh Government during the year with these being used to fund costs that had originally been budgeted.

It was explained that they were seeking the Corporate Joint Committee's approval to transfer the underspend to the earmarked reserve to fund expenditure in subsequent years as the activities and functions of the Corporate Joint Committee increased. It was elaborated that the Corporate Joint Committee had already approved over £600k of this reserve to be used as part of the 2026/27 budget and this would then leave a balance of around one million in the fund.

The out-turn position of the Growth Deal and the corresponding funding streams for the year were highlighted. It was noted that the total underspend was £543k with the main underspend under the employees heading. Members were reminded that partner contributions only amounted to around 20% of the budget, which were permanent sources of funding and the remainder were replaceable sources. It was explained that the Corporate Joint Committee was being asked not to use £61k of the reserve and to reduce the contribution from the Growth Deal grant to £868k, to leave a neutral position for the year. It was added that these sources would be used to finance expenditure in years to come and thus reduce the risk of needing to increase partner contributions in future.

An update was presented on movement in the Growth Deal funds during the year along with their balances on 31 March 2026. It was explained that an interest reserve of £5m had been set aside to fund borrowing costs in future years as the expenditure on the capital schemes took place before the grant money was received from the Government. It was recognised that the balance of the resources reserve as at 31 March 2026 was £4.4m, and almost one million of this fund had been earmarked for use in the 2026/27 budget.

An update was provided on the year-end review of the Growth Deal capital programme for 2025/26 and the spending profile from 2026/27 onwards. It was noted that a total of £30.64million of expenditure had been made on the Growth Deal by the end of 2025/26. It added that there was a net reduction of £14.28m in expenditure for 2025/26 compared to the budget that had been approved in February 2025, due to a slippage on projects.

The financial position of the Regional Skills Partnership was presented, which showed a neutral position for the year with the £290k expenditure being funded by a Welsh Government grant.

It was confirmed that the grant funding was a fixed amount and did not increase with inflation.

Any comments on the item were requested and received at the Portfolio Board Meeting on 24 April and at the Economic Well-being Sub-Committee meeting on 15 May. It was confirmed that no questions were asked during the Portfolio Board Meeting, but a question had been raised at the Economic Well-being Sub-Committee meeting regarding assurances that the money in the reserves was available for the following year.

A member asked if there was a guideline for the percentage of reserves that the CJC should hold against the turnover. It was confirmed that there was no such guide, but a general rule was that a 2.5% – 5% reserve was needed against the gross expenditure. It was further noted that £600 thousand of reserves had been included to keep the levy down.

It was explained that there were two budgets for the CJC, namely the Growth Deal budget which was funded through a Government grant, the local authorities, and the four education bodies, and the CJC budget which was achieved by charging a levy on the six councils. It was emphasised that they were doing their best to provide assurance to the local authorities and the CJC about how the reserves were used and this was reflected in the Medium-Term Work Plan.

A member asked whether the slippage in some projects was due to internal or external factors, and what effect this would have on future years? It was confirmed that any slippage regarding the Growth Deal was due to various external factors and assurances were given that due diligence was always undertaken, although this may slow down the process.

Concern was expressed about the ambitious nature of commencing and completing any capital project within a single financial year, with particular focus on the £4 million Port of Mostyn project planned for 2026/27. They were assured that the project was the financial contribution from the Growth Deal and was not a reflection of the Development Programme. It was confirmed that the project would be under regular review.

It was confirmed that the report would be submitted to the Corporate Joint Committee meeting for approval on 19 June.