Agenda item

Financial Overview and Forecast as at February 2021

To consider the report of the Portfolio Holder for Finance.

Minutes:

Documents:

·         Financial Overview and Forecast as at 28 February 2021

 

Discussion:

·         A number of funding streams from the Welsh Government and grants totalling £7.8M have been received

·         Whilst some of the funding is specific to certain services and is restricted in how it can be spent, it has allowed funding to be released from within the Council’s own budget and overall, a significantly improved forecast is shown.

  • A surplus of £5.906 million (excluding Delegated Schools and Housing Revenue Account (HRA). is now projected. The budget agreed at Council on 25th February 2021 approved a number of recommendations as a result of the improved financial position:

·         – this includes increasing the MRP provision for 2020/21, the setting up of a £1.8M Covid Recovery Fund and using any further opportunities to support capital and transformation allowing capital receipts to be rolled forward for the capital programme.  It is therefore  proposed to ringfence £1.5M to fund remedial works on buildings

·         To date over £13M has been received from the hardship fund to cover additional costs and loss of income

·         £722K has been claimed for furloughed staff

·         WG funding to support the costs associated with flooding of  £2.4M has also been received

·         There is little change in the position regarding the delivery of cost reductions

·         The Reserves position reported does not reflect the setting up of the specific reserves proposed.

·         The detail regarding schools’ budgets was not included within the report but had been discussed earlier in the agenda

·         A Member asked whether staff were given an allowance for working from home – no allowance was being paid  but staff will not be incurring travelling costs into work at the moment.A tax allowance could be claimed from HMRC and staff were advised of this at the beginning of the pandemic – consideration could be given to issuing a reminder.

·         There was concern regarding the lack of clarity around the £1.8M Covid Recovery Fund and how it would be spent.  There had been reports that this would be used flexibly in communities and improve services, but media reports suggest that the funds would be used to repair potholes. This was not considered to be ‘covid recovery’.  Members sought clarity regarding the method by which funds would be allocated and scrutiny of the budget. The Head of Finance assured members that scrutiny would be given the opportunity to review how the funds would be utilised.       

·         Additional funding and future surpluses would be used to support the Capital Programme and there was concern that this would increase pressure on future revenue budgets. It was suggested that the increased funding could have been used to offset council tax increases. The Head of Finance reported that the improved financial position was a one off and would not be sustained year on year so it could not be used to support ongoing service budgets r to reduce council tax.  The use of the funds to support transformation costs would free up capital receipts to support he capital programme reducing borrowing and limiting the pressure on the revenue budget.  The Authority is already aware of significant challenges in future plans and budget gaps that remain in our budget modelling.  The opportunity now must be used to support the future financial resilience of the Authority.

·         It was noted that council tax collection was down and funding has been provided by WG to meet this gap, this was held in corporate budgets, and would be reported in line with legislation and guidance.

·         The current style of reporting was the first year in which Heads of Service commentary has been provided.  This was welcomed whilst recognising that some commentary was better than others

County Councillor P Roberts left the meeting at 11.31

·         The Chair suggested that a more holistic approach needed to be taken to consider all aspects of the budget including commissioning, funding etc

·         A query was raised regarding undeliverable cost reductions and what action was being taken. This had been reviewed as part of the December budget report with explanations provided as to why cost reductions were now not considered to be achievable.  Some have now been written out of the budget when it was approved by Council.

 

Supporting documents: