Agenda and minutes

To receive apologies for absence.

To consider the report of the Portfolio Holder for Finance.

Documents:

·         Report of the Portfolio Holder for Finance

Discussion:

·         The accounts had been closed and the draft statement of accounts submitted by the required deadline

·         An underspend of £1.46M against the working budget was realised at the end of the financial year.  This figure excludes schools and the Housing Revenue Account (HRA)

·         Cost reductions of £15.79M had been achieved – this represented 73%

·         The level of useable reserves had been increased to £29.8M which is 5.1% of the revenue budget.  Some costs had been capitalised which enabled reserves to be maintained to allow for flexibility in the current financial year and increase resilience. 

·         School and HRA reserves are ringfenced

·         The pandemic had no significant effect n the 2019/20 budget - £33K had been claimed in respect of expenditure in March.  Subsequent claims have been significantly higher.

·         The corporate activities budget was underspent in part due to slippage in the capital programme which has resulted in the Minimum Revenue Provision (MRP) and borrowing costs being lower than expected

·         The schools delegated budget overall was in an improved position – it had been projected that £3M would be drawn from reserves, but the actual was less than £1M.  Work with individual schools is ongoing to understand the position.  Forecasting across schools needs to be addressed.

·         The Welsh Government Capitalisation Directive was being used to fund transformation work – to date £3.18M to support transformation work including redundancy costs has been spent

·         Whilst it was pleasing that there had been a surplus at year end there were significant variances within services.  To ensure resilience, services must successfully deliver cost reductions, budgets and capital expenditure.  Rebalancing budgets within year is not a robust way to move forward.

·         The challenge will be managing the effects of the pandemic.  Planning is needed for the recovery phase and for medium to longer term budget planning.  Many assumptions will have to be reviewed, including the projected settlement, and scenario planning will take place.

·         The Chair asked to what extend covid costs would be covered and whether this would include loss of income?  The Head of Finance thought that both would be covered.  Costs are being met from the Hardship Fund and the Authority is already drawing from it.  Discussions are ongoing with the WLGA and Welsh Government regarding loss of income particularly as to how any funding might be drawn down.  The Welsh Government have requested an update on the current position and first estimates for the second quarter.  It is not yet known how much might be recovered - £200M is available across Wales. 

·         It was noted that only £26K had been reclaimed in respect of the February storms.  The Head of Finance explained that there was a threshold which had to be met, after which 85% of eligible expenditure could be reclaimed.  This is an ongoing, annual scheme for emergencies.

·         The slippage on the capital programme was a regular occurrence.  Building work had been at a standstill during the pandemic and the Head of Finance was  ...  view the full minutes text for item 2.

To consider the report of the Portfolio Holder for Finance.

Documents:

·         Report of the Portfolio Holder for Finance

Discussion:

·         86%/£62.36M of budget had been expended

·         3.4% net revenue budget was used to support past and present borrowing

·         Budgets will be reprofiled where expenditure has slipped

·         The Head of Finance was asked what impact the slippage of the capital programme was having on the Council structurally and on transformation projects.  It was likely that there would be an impact on both costs and revenue.  Projects were currently being reassessed.

·         There was concern that there had been an underspend on flood alleviation schemes highlighting a failure to project plan effectively.  Training had been undertaken in budget profiling.  Sometimes the timing of projects is dependent on the availability of grant funding.

·         The Portfolio Holder reported that there was a constant drive to improve but this could be challenging where third parties were involved

·         Borrowing is undertaken through the Public Works Loans Board and interest rates are set at the inception of the loan.  The current level of interest rates will not therefore impact upon existing loans.

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