To consider a report by County Councillor Aled Davies, Portfolio Holder for Finance, Countryside and Transport.
Minutes:
Cabinet received the financial outturn report for the year ended 31st March 2020. The Portfolio Holder for Finance, Countryside and Transport reported that despite the additional pressures brought about by the Covid-19 pandemic the Council has completed the closure of its accounts and produced the year end management accounts.
The revenue outturn position for 2019/20 was an underspend of £1.46 million against the working budget, excluding Schools and the Housing Revenue Account. The figures included cost reductions delivered of £15.79 million, 73% of the £21.20 million target, compared with 58% delivered in the previous year.
In delivering the outturn position, consideration had been given to the balance between the use of capitalisation, maintaining a prudent level of reserves, and the subsequent demand on future year budgets. It was important that the council’s reserves were protected given the given the inherent risks arising from COVID 19 and the significant challenge to balance the budget over the medium term. This approach had increased the overall level of useable reserves and maintained a general fund reserve at year end of £9.47 million representing 5.1% of total net revenue budget excluding Schools and the HRA, maintaining reserves in line with the Council’s policy.
The response to the COVID 19 pandemic had some limited impact on the 2019/20 financial year. Welsh Government had provided Local Authorities with additional funding through the COVID 19 hardship fund, the first claim made for actual spend incurred in March was £33,698. Monthly claims would continue to be made to draw down funding to reimburse additional costs incurred.
The Council had incurred costs of £549,233 in managing the consequences of the February storms. These costs had been in part (£26,625) supported through the Welsh Government Emergency Financial Assistance Scheme. The support was subject to a £517,909 threshold to be met by the Council together with capital costs that are incurred outside available grants. Costs above the threshold were funded by the scheme at 85% of the cost incurred. The majority of the claim costs related to Highways, although Schools had incurred some costs.
Cabinet was advised that part of the revenue surplus reported had been generated by an over recovery of pension contributions. It was proposed that a specific pension reservebe set up to manage any under/over recovery of pensions contributions on an annual basis. In 2019/20 the contributions collected through payroll, were in excess of the lump sum payment by £0.75 million. The reserve would support potential Pension Fund gaps that may arise over the next two years, through to the next actuarial valuation.
The Head of Finance noted that there were considerable variances within the budget plan. Going forward the Council could only ensure its financial resilience if there were consistent delivery of services within the agreed budget, successful delivery of planned cost reductions and the delivery of an accurately profiled capital programme. The budget for the new financial year was already under significant and unprecedented pressure due to the impact of the COVID 19 pandemic. The delivery of a surplus for 2019/20 and the increase in the level of reserves held would provide some added flexibility to the council’s financial position. Reserves would be drawn upon only when all other options had been exhausted.
RESOLVED that Cabinet note the budget position.
RECOMMENDED to Council that the proposal to put in place a specific Pension Fund reserve of £750,000 is approved.
The Leader thanked the Head of Finance and her team for their work. The Portfolio Holder reminded businesses that the closing date for applications to the Welsh Government’s business support grants was the end of June.
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