Agenda item

To submit the report of the Head of Finance.

The report of the Cabinet Member for Finance was submitted in which he noted that the final financial situation of the Council departments for 2016/17 was good given the challenging financial climate. He thanked the finance officers for their detailed work and their support for the departments.

 

The Senior Finance Manager focused on the content of the report which would be submitted to the Cabinet in its meeting that afternoon. Attention was drawn to the recommendation for the Cabinet:

 

"1.1.  To approve and note the final financial position of the Council’s departments

         for 2016/17.

 

1.2      To approve the amounts to be carried forward (the “Revised Over/ (Under) Spend” column of the summary in Appendix 1), namely:

 

 

1.3      To approve the following recommendations and virements (as outlined in Appendix 2)

 

·         Use (£46k), namely the underspend in excess of £100k in Adults, Health and Well-being to contribute towards the shortfall in another department.

·         Clear the overspend in the Children and Families Department so that they can move forward to face the challenges of 2017/18, and to finance this by re-directing the Adults, Health and Well-being Department underspend (£46k) and Corporate underspend (£151k).

·         Clear the overspend in the Highways and Municipal Department so that they can move forward to face the 2017/18 challenge, and to finance this by re-directing Corporate underspend (£88k).

·         Use the £939k underspend on Corporate Budgets for 2016/17 as follows:

- £151k to clear the overspend in the Children and Families Department

- £88k to clear the overspend in the Highways and Municipal Department

- £700k to be earmarked in a reserve to contribute towards the Financial Strategy for the future.   

  

1.4     Approve the virements from the specific reserves and release the provisions as outlined in Appendix 3 following a comprehensive review of reserves and provisions.

 

1.5     Convey to the Departments that the Cabinet will only clear overspend in very exceptional circumstances in the future, and that departments will be expected to carry forward any future overspend (in line with the procedure for carrying underspend forward)."

 

The Head of Finance Department stated that the revised statutory financial statements for 2016/17 would be submitted for approval by the Committee on 13 July but that this outturn report provided a clearer financial picture. He noted that there was some uncertainty about the level of Welsh Government grant funding for 2018/19 and beyond. He reported that a review of all the Council's funds had been made at the close of this year's accounts and £1,060m of resources had been collected. He explained that setting aside £1.76m in a specific fund would give the Council time to plan in order to respond appropriately in the autumn following confirmation of the level of Welsh Government grand funding.

 

During the ensuing discussion, the following main observations were made by the members:

·         Congratulations were extended to the departments for their stringent financial management. Would the departments be expected to continue to underspend?

·         Was the overspend in the Children and Supporting Families department a result of matters beyond the Department's control and was the underspend in the Adults, Health and Well-being department the result of inability to provide services?

·         Could the annual trends be included in the report?

·         The Council was unable to compete with private companies in relation to fees charged for commercial waste disposal;

·         Did the Council's move toward enabling older people to continue to live in their own homes mean that there was an overspend on domiciliary care?

·         Was the overspend on waste services the result of the fine the Council received in relation to storing materials at the Tywyn Depot?

·         The committee had raised concerns in the past about overspend in the maritime service and the Education and Economy Scrutiny Committee should be asked to consider extending their scrutiny work on reviewing the management and governance of Hafan Pwllheli to include all harbours;

·         Concern that the Consultancy Department was underspending considering the increasing risk from flooding. The money should be spent on carrying out more risk management work;

·         The need to ensure that any underspend was not the result of failure to provide services and that it was a valid underspend.

 

The officers responded to the observations as follows:

·         A number of departments had underspent on a one-time basis following achieving early efficiency savings. It was highlighted that the underspend was a small percentage considering the size of the budget and that the departments' 2017/18 budgets had been adjusted to reflect the income generated in 2016/17, etc.;

·         Overspend in the Children and Supporting Families and underspend in the Adults, Health and Well-being department was not the result of an inability to provide services;

·         The Children and Supporting Families had overspent mainly on location services. The Department had received a permanent bid of £50k and a one-off bid of £210k for 2017/18 in acknowledgement of the pressure on the services;

·         The Adults, Health and Well-being Department had underspent as it had received money from Betsi Cadwaladr University Health Board which was owing to it from a few years previous. It was noted that this was a one-off situation.

·         Information submitted in the report had to be selected; if the members wished to receive information about trends, an area would have to be selected for detailed consideration;

·         Private companies could select from which areas they collected commercial waste and the Council would serve the areas that did not receive a service from private companies. The Council provided this service with the aim of retrieving costs;

·         The Council's move toward enabling older individuals to live in their own homes was a factor. The change in emphasis and delivering savings plans showed a trend in terms of additional pressure on domiciliary care services. 

·         It was not the waste services that had been fined but the Highways Maintenance service. The fine had been included within the Highways expenditure figures.

·         The underspend of the Consultancy Department would be carried forward to 2017/18. It was emphasised that the Department operated commercially.

 

RESOLVED:

(i)     To note the situation and the relevant risks in the context of the Council’s budgets and its departments.

(ii)    Recommend that the Cabinet accept the report and approve the recommendations.

(iii)  Ask that the Education and Economy Scrutiny Committee consider expanding its scrutiny work on reviewing the management and governance arrangements of Hafan Pwllheli to include all harbours.