Agenda and draft minutes

To receive apologies for absence.

To receive the notes of the last meeting.

Documents:

·         Notes of the last meeting held on 28 September 2020

Outcome:

·         Notes were received

To consider the report of the Portfolio Holder for Finance.

Documents:

·         Report of the Portfolio Holder for Finance

Discussion:

·         The pandemic continues to have a significant impact on the Council’s financial position

·         At the end of Q1 a predicted overspend of £12.5M was noted although this was subject to confirmation of Welsh Government support.  At the end of Q2 the predicted overspend has reduced to £7.5M but with further assurances regarding delivery of cost reductions and claims for lost income, the forecast overspend at year end is currently £2.8M.

·         The report and appendix detailed underspends, cost pressures etc by service area

·         Cost reductions of £12.3M had been identified for the current year - £7.4M has been delivered with assurance around delivery of a further £3M, leaving £1.9 M unachieved by year end.  Of this amount, some cost reductions are not expected to be delivered and will leave a budget gap for the next financial year.

·         Reserves may have to be used to meet some of the deficit, but this needs to be carefully considered to maintain the Authority’s reserve position of 3% of Net revenue budget

·         A decision on use of reserves will not be made until the end of the financial year

·         The use of reserves should be minimised to ensure reserves are available for future resilience.  The Head of Finance was asked how Powys reserves compared to those of other authorities.  Some authorities carry significant reserves.  Previously, Audit Wales has produced a Wales wide report relating to reserves.  If such a report currently existed, it would be circulated to Members, otherwise the data would be compiled and provided for information.                       

·         There had been delays in receiving some school budgets.  The Learning and Skills Scrutiny Committee will consider the budgets in more detail.  Further compliance work and recovery plans will be needed.

·         The Hardship Fund has been instrumental in supporting increased costs, ppe, school meals, homelessness and general expenses, such as the temporary mortuary facility

·         Claiming from the Hardship Fund has led to significant demand on the Finance Team

·         The claim for Q2 loss of income will be submitted in early November

·         Overall, the Hardship Fund has £500M available to all Welsh authorities.  Approximately half of this has been utilised and the situation is being monitored closely.  All expenditure is being tracked.  To date the Authority has claimed £6M which has been sufficient to meet our additional costs.  However other authorities may have different needs.  For example, Powys had a well-developed home working system and so employees were quickly able to work from home at the start of the pandemic.  This was not the case with all authorities and some IT costs were covered by the Fund.  However, IT costs are no longer claimable.

·         The report highlighted that the most significant risk to the authority will be balancing the budget for the current and future years

·         Cash flow within the Authority is good and the Council remains in an under-borrowed position

·         The Medium-Term Financial Strategy and budget plan is being reviewed and updated

·         The Panel asked if those  ...  view the full minutes text for item 3.

To consider the report of the Portfolio Holder for Finance.

Documents:

·         Report of the Portfolio Holder

Discussion:

·         Actual and committed expenditure as at 30 September 2020 was £44M (38%)

·         3.9% of annual net revenue budget supports past and present capital expenditure

·         The Head of Finance reported the reprofiling of expenditure across financial years – this was a reporting exercise and did not require approval.  The overall cost of each Project was not being amended.

·         Capital receipts of £780K had been received with current sales expected to increase this by a further £1.96M.  Capital receipts are used to fund transformation costs of £3.44M under the WG capitalisation directive

·         The Panel discussed the impact of deferring capital expenditure and the impact on the revenue budget and other capital projects.  It was agreed that this should be the subject for future member training.

·         The Capitalisation Directive would run to 2022 and the Panel asked what planning was in place when the programme ceased.  The revenue budget already incorporates £2M to support the transformation programme.  The Head of Finance had no information regarding whether the Directive would be extended.   

Outcomes:

·         Training regrading capital to be considered as a topic for member development or budget seminar

The next meeting is scheduled for Friday 27 November 2020.

The next meeting was scheduled to take place on Friday 27 November 2020 at 10am.