Agenda item

For Committee Members to scrutinise performance matters within the Department.

DECISION

 

•           To accept the report and note the observations.

•           To ask to include the following in the next performance report that will be brought before the Committee:

•           more detailed data had been categorised in relation to long-term debts and tax collection.

•           number of legal cases relating to long-term debts.

•           information about the department's recruitment arrangements.

The Cabinet Member for Finance presented the report which provided the Committee with an update on what had been achieved in the field, including an update on the Council Plan and the Department's day-to-day work up to the end of March 2026. It was explained that the Information Technology Service had been transferred to the management of the Corporate Services Department since 1 April 2026, but as the 2025/26 performance was being considered, the digital services had been included in the report. It was noted that the transition had been smooth, but that the recruitment of an Assistant Head for the Information Technology Service remained a challenge.

It was reported that all matters under the responsibility of the Cabinet Member had been discussed and scrutinised at Performance Challenge and Support meetings, and satisfaction was expressed with the Department's overall performance. It was noted that the Finance Department had taken the lead on two priorities in the Council Plan during 2025/26, namely Managing the Impact of National Budgetary Cuts and the Digital Plan. It was emphasised that the need to achieve financial savings across the Council remained a priority to achieve budgetary balance in the medium term and to seek to keep any increase in Council Tax within reasonable limits. It was noted that the work of the Finance Department in the field was robust and effective, but ensuring that savings were successfully realised in all services remained a challenge.

It was noted that the performance measures showed a robust performance overall, with a few areas still receiving attention. Reference was made to high levels of compliance with mandatory training, along with the robust performance of the Finance and Accountancy, Payroll and Pensions services. It was noted that the level of long-term debt managed by the Income Service remained a matter of concern and that this was the only red category measure in the Department. It was noted that there were signs of improvement and that plans were in place to reduce risk and improve debt recovery. It was reported that the rate of Council Tax collection had improved, although it remained below historical levels. It was noted that there was an intention to introduce additional digital support to support the service.

In terms of Information Technology, it was noted that significant improvements had been made to strengthen the digital provision, including the modernisation of devices, the upgrading of systems, the expansion of digital ways of working and the rationalisation of the infrastructure. It was explained that the work had contributed to achieving financial savings. It was noted that cyber incidents and service outages had highlighted the need to continue to strengthen the resilience and security of the infrastructure, and it was noted that these issues were regularly monitored through the Performance Challenge and Support arrangements.

Attention was drawn to two reports received from external auditors during the year. It was noted that the report by Audit Wales on Strategic Management of Balances and Reserves had been published in September 2025, with the main recommendation relating to strengthening the Council's reserves strategy. It was reported that the ISA260 report had been published in November 2025 and approved by the Governance and Audit Committee. It was noted that an unqualified opinion had been given on the 2024/25 Statement of Accounts and that the report did not contain any recommendations.

During the discussion, the following observations were made:

Attention was drawn to the fact that the percentage of staff who had completed the mandatory training on awareness of the Welsh language was lower than the percentages for the other mandatory training. Concern was expressed about this stressing that as the training was mandatory, the Department should aim to ensure that all members of staff completed it.

Reference was made to the Benefits Service and the pressures arising from high levels of private rents and intermediate rents, noting that high rent costs could make it difficult for people to save towards buying a home.

Attention was drawn to free school meals, noting that the provision of free meals for all primary pupils meant that some families who would have previously been eligible did not see the need to register. Concern was expressed that this led to a loss of important information, as eligibility for free school meals continued to be used as an indicator of deprivation, and it was noted that the problem could increase with the movement of pupils from Year 6 to the secondary sector.

In response to several comments, it was stated:-

•       That significant progress had been made with mandatory training since the data collected in March. It was explained that the different courses needed to be prioritised as they required a time commitment from staff, but the expectation was clear that the aim was to reach 100%.

•       That the Department had been among the first in the Council to reach 100% in terms of safeguarding training, and that the level for domestic abuse training was almost 100%, with the exception of one member of staff who was absent on a long-term basis. It was noted that Welsh Language awareness training continued to be among the lowest percentages, but it was confirmed that work continued to improve the situation.

•       The majority of housing benefit payments had now transferred to Universal Credit, with the Council continuing to deal with specific groups such as pensioners and people in certain types of accommodation. It was explained that the level of rent was based on the nationally determined Local Housing Allowance, and it was recognised that there were cases where the level of benefit was lower than the rent that a claimant had to pay.

•       That the Discretionary Housing Payments fund was used in full each year to provide support in this field.

•       That the Department was aware of the issue of registering for free school meals as pupils moved from primary to secondary, and that discussions were taking place with the Education Department to address the situation.

Reference was made to the high level of debt owed by the Health Board, and it was questioned how long the money had been outstanding and why it had not been recovered. In response, it was confirmed that Betsi Cadwaladr University Health Board's debt was a matter of concern. It was noted that old debts were mainly under consideration and that arrangements in relation to newer debts had improved. It was reported that discussions were ongoing with the Health Board.

It was explained that the six local authorities in North Wales needed to work together on the Health Board's debts. It was noted that historical experience had shown that one authority could be paid if it put significant pressure on the Health Board, leaving the other five authorities to wait for their payments. It was reported that the issue had been identified at the level of finance officers and chief executives, and that collaboration was planned.

Concern was expressed about debt levels in general and the possibility that the cost of living pressures were making it more difficult for residents to pay Council Tax. In response, it was clarified that the overall debt figures under the Income Unit did not include Council Tax debts.

It was further questioned where Council Tax debts were recorded. In response, it was explained that they were reflected in the collection rates. It was noted that residents with the lowest levels of income and capital may be eligible for the Council Tax Reduction Scheme. Concern was expressed, however, about a cohort of people whose income, savings or assets were slightly too high to qualify for the scheme, but who were nonetheless struggling to pay. It was explained that the Council sought to signpost such individuals to services such as Citizens Advice in order to receive support.

The relationship between Council Tax collection rates and the premium on property was highlighted, and it was asked whether a clearer analysis of cases where Council Tax had not been paid could be provided. The view was expressed that a distinction should be made between individuals who refused to pay without mitigating circumstances, cases where an error had occurred, and cases where there was real difficulty in paying. Reference was made to cases where the premium had been charged on a property and where that was considered disproportionate under the circumstances, including a holiday property for which there was no relevant planning condition. A request was made for such information in future reports to provide a better picture of the reasons for the difference in collection rates. Reference was made to the overall reduction in the collection rate since 2019 and the reference to revaluation in 2026, questioning whether an increase in property values could further affect Gwynedd taxpayers and collection rates.

The performance of the Internal Audit Service was questioned, noting that the Service had not met its targets. Reference was made to a recent annual report to the Governance and Audit Committee where a relatively high number of audits had been given 'limited assurance', and it was questioned whether this suggested a problem with the Internal Audit Service. In response, it was noted that:-

•       The introduction of the Council Tax Premium had created a significant challenge for the Tax Service, along with the additional pressures that derived from the Covid period. It was stressed that there had been no attempt to hide the magnitude of the challenge.

•       Significant progress had been made over the previous year in responding to exceptional cases relating to the premium. It was reported that a panel had been set up to consider applications and cases where there were exceptional circumstances, recognising that some properties could be in circumstances that did not fulfil the original intention of the premium.

•       A general exception could not be introduced for a particular type of property, and that each case needed to be considered on its own merits. It was noted that the panel developed information over time and, in identifying cases with similar characteristics, there was a need to ensure consistency in dealing with cases.

•       An analysis of the figures could be provided in the next report to provide the additional context requested.

•       The revaluation referred to in the report related to Non-Domestic Rates and not Council Tax. It was noted that the revaluation, along with changes to some relief schemes, could create problems for businesses in the county, and it was noted that the Council would do what it could to support them.

•       In relation to Internal Audit, it was recognised that the number of reports that had received limited assurance was slightly higher than usual, but that in itself was not considered to be an indication of a problem with the Internal Audit Service. It was explained that the role of the service was to report on what it found, and that an increase in limited assurance reports could be indicative of wider issues around the Council's internal controls. It was noted that that was a matter to be considered at a corporate level.

It was explained that the concern in relation to Internal Audit was the resources and capacity of the service rather than the quality of the work. It was noted that, in the context of the previous discussion on the premium, a number of Gwynedd residents were in a position where they had assets or capital but relatively low incomes, and it was emphasised that this needed to be taken into account when making decisions regarding Council Tax. In response, it was confirmed that that consideration was borne in mind when considering cases through Panel 13A. In relation to Internal Audit, it was confirmed that the capacity of the service was an issue considered by the Head of Finance, and that a commitment had been given to the Governance and Audit Committee to review the resources available.

It was reported that the number of staff in the Internal Audit team had decreased significantly over the years, from around 12 members of staff to six. It was explained that there was no single specific measure for deciding how much internal audit work should be carried out, and that the level of work depended on the resources available. It was emphasised that the Chief Finance Officer needed to ensure that the capacity of the service did not fall to a level where it would no longer be able to carry out its duties or provide the necessary assurance regarding internal controls. It was noted that any request for additional resources would have to follow the Council's normal bidding process. It was stressed, however, that there was no evidence that the increase in limited assurance reports stemmed directly from the capacity of the service, as they reflected the findings of the work carried out.

Attention was drawn to the long-term debts, which amounted to almost £2 million, and it was asked what exactly the robust plans were to tackle the debt. It was questioned whether there was a risk that some of the debts would have to be written off, and whether court proceedings had been initiated to recover the money. In response, it was noted that:-

•       The Cabinet had approved a one-off bid in March, and that a legal and administrative resource had been secured. It was explained that close work was taking place with the Children and Adults Departments in relation to care debts, and that discussions had begun to seek further recovery of the amounts owed.

•       Information about specific court cases was not at hand, but that some cases were referred to the Council's Legal Service. It was stressed that in all cases it was not necessary to go to court in order to pursue debt.

•       There was an important difference between Council Tax debts and minor debts. It was explained that the Council had stronger statutory powers in relation to tax debts, while recovering minor debts could be more complex.

•       A proportion of the debt was owed by another public body, in which the Council hoped to be able to reach an agreement, and that another significant proportion related to people who were being looked after. It was stressed that the circumstances of the debtors needed to be considered before deciding whether court action would be appropriate.

•       Debt was defined as long-term debt for the purposes of the report when it was more than six months old. It was explained that some debts were significantly older than that, and that some cases went back several years.

•       The Income Service reviewed its practices and structures to see how the debt recovery team could operate faster and more efficiently with the limited resources available.

Reference was made to the tens of millions of pounds worth of savings achieved over recent years and, looking back on the process, it was asked whether there was confidence that the systems used had succeeded in minimising the impact of the cuts on front-line services. It was enquired what lessons had been learnt for the future, given the likelihood that further savings would be needed. In response, it was explained that the Finance Service had learnt through all cycles of savings and had developed a more supportive and challenging role in assessing saving plans. It was noted that there was now a better understanding of how realistic a saving plan was before it was approved, acknowledging that plans had been submitted in the past that were ultimately unachievable.

It was emphasised that it should not be assumed that support services such as the Finance Department were able to accept cuts on an ongoing basis without impact, as that support capacity was needed to enable front-line departments to operate. Nevertheless, the view was expressed that there were further opportunities to improve efficiency, especially through technological advances and doing more with the same level of resources or less. It was acknowledged that it could not be promised that all the necessary future savings would be achieved through efficiency alone, but the view was expressed that opportunities continued to improve ways of working to reduce the need to cut services for the people of Gwynedd.

Attention was drawn to the pressures on the Tax Service during the period of sending Council Tax bills at the start of the financial year. Concern was expressed that residents who were worried about an increase in their bills had to wait for long periods to receive a response over the phone, with some reporting that they had waited up to 45 minutes. It was emphasised that not all individuals wished to use e-mail or wait for a written response, and it was asked whether more staff could be provided to answer calls during busy periods. In response, it was explained that the recruitment and retention of staff in the Tax Service was a significant challenge, particularly as answering calls about tax could be difficult. It was noted that it would be desirable to increase the number of staff at busy times, but that there were not enough applicants available, and it was emphasised that it was not possible to promise an undeliverable arrangement.

The view was expressed that Galw Gwynedd could provide additional support during the busy periods as the increase in calls could be predicted. In response, it was explained that the telephone lines were busy throughout the year and not just during the billing period, and that the service worked regularly with Galw Gwynedd. It was noted that efforts to recruit additional staff were being made on a regular basis, but that a number of posts had to be re-advertised. Reference was made to a particular difficulty in the recruitment of court officers, noting that it was not possible to attract applicants even for some temporary posts.

It was reported that a pilot scheme was underway to introduce on-line forms to improve the service for those wishing to deal with issues digitally. It was explained that Council Tax staff would be able to assist individuals over the phone to complete the forms, with the hope that this would speed up the process and free up more time to answer calls.

It was stressed that not everyone wished to communicate on-line, and the concern was reiterated that some residents due to their situation needed a quick response rather than waiting several working days for a response. It was questioned whether the main obstacle was a lack of applicants, rather than a lack of funding to employ staff. In response, it was confirmed that additional resources had been provided as a result of the premium to be able to employ more staff, but that the challenge was to attract people to apply for the jobs. It was clarified that the introduction of on-line forms was not intended to replace the telephone service. It was stated that the intention was to enable those who were willing to use an on-line service to do so, freeing up capacity for staff to assist those who needed to use the phone or preferred to do so.

It was emphasised that the Department's services were trying to put the people of Gwynedd first, but that the welfare of staff needed to be addressed. It was noted that staff remaining in the Tax Service were under significant pressure due to the recruitment difficulties, and that putting unacceptable pressure on them had to be avoided. It was acknowledged that the service at the time did not meet the desired best standard for residents, but it was confirmed that different approaches were being considered to improve the situation. It was stressed that failure to attract applicants to vacant posts significantly limited what could be achieved.

Returning to the mandatory training, it was asked how many staff the percentages in the report represented and how many vacancies there were in the Department. In response, it was explained that the training figures included Information Technology Service staff. It was noted that the Finance Department now consisted of approximately 150 staff after the transfer of the service to the Corporate Services Department. It was confirmed that the exact number of vacancies was not to hand, but a commitment was made to provide the information to the members. It was noted that the Tax Service was  where recruitment was most difficult, and that turnover levels in other parts of the Department were more normal.

It was questioned whether Betsi Cadwaladr University Health Board was the Council's largest single debtor. It was questioned whether the amount related to old debts, given that more recent payment arrangements had improved, and whether there was a risk that the debt would eventually have to be written off. In response, it was confirmed that the Health Board was the Council's largest single debtor. It was confirmed that old debts were mainly under consideration. It was explained that disputes could arise in care cases about what proportion of the cost should be paid by the health service and what proportion should be paid by the Council, and that this often caused delays. It was noted that the Health Board paid relatively promptly once an agreement had been reached.

It was recognised that there was a risk that some debts would eventually have to be written off. It was noted that the Department was continuing to seek to recover older debts, but that there might come a point where it would have to be accepted that a certain amount was not likely to be paid. It was explained that provision for bad debt was included in the budgeting and preparation of accounts, to ensure that the Council planned prudently for that risk.

Returning to the recruitment problems in the Tax Service, it was noted that some members were aware of people who were looking for work, but that there were no Finance posts to be found on the Council's vacancies page at the time. It was questioned how people could know about the opportunities or apply for them if jobs were not advertised. In response, it was explained that some posts within the Tax Service had been advertised in the past without attracting any applicants, and as a result the Department had concluded that the structure of the service needed to be reviewed. It was noted that work on the review was underway and, once the new structure was in place in the following weeks, further posts would be advertised.

It was reported that the Department was looking at the Council's central pool staff to see if there were individuals available who could fill some of the posts, and people looking for work were encouraged to join that pool. It was noted that regular discussions were being held with the service managing the pool to identify any suitable individuals. It was noted that agency staff needed to be used from time to time when posts could not be filled, although this was not the first choice. It was emphasised that the work was not just about answering phone calls, as the information received subsequently needed to be processed. It was reported that the service had succeeded in attracting a trainee and two apprentices to the field, and it was hoped that they would contribute to the future of the service.

 

RESOLVED

 

·       To accept the report and note the observations.

·       To ask to include the following in the next performance report that will be brought before the Committee:

·       more detailed data  categorised in relation to long-term debts and tax collection;

·       number of legal cases relating to long-term debts;

·       information about the department's recruitment arrangements.