To consider the report of the Portfolio Holder for Finance.
Minutes:
Documents:
· Report of the Portfolio Holder
Discussion:
· The Panel were aware of the unprecedented challenges that had affected the Authority
· Initially the financial impact on the Authority looked to be significant and the budget was carefully monitored and controlled during the year.
· Authorities across Wales have benefitted from Welsh Government support and this has been fundamental in delivering the outturn reported
· An underspend of £4.2M was recorded at year end, excluding schools and the Housing Revenue Account (HRA).
· Significant levels of additional funding had been received during the final quarter of 2020/21
· The Head of Finance was asked for greater detail regarding grants and other funding sources but, whilst this is available, there was too much detail to be include this within the report.
· The Panel asked if the Welsh Government could reclaim any of the grant funding if it had not been used appropriately – the Head of Finance confirmed that each grant would have had terms and conditions attached, some of this funding has to be carried forward and utilised in 2021/22, whilst other funding is now offsetting expenditure in 2020/21 that the Council expected to support. Although the outturn was positive financial challenges remain in the current financial year and will extend into future years. Financial resilience is key.
· The Head of Finance was asked whether the underspend would be disaggregated to establish whether there was a structural underspend or what the position would have been under normal business. Services had not all been fully delivered and there had been delays in the capital programme too.
· Further detail was provided in the commentary within the report by Heads of Service. The Portfolio Holder reported that the Finance Team had been very proactive and had erred on the side of caution. The Medium Term Financial Strategy shows a £38M cumulative deficit over the next few years which will need to be addressed.
· Further clarification was sought regarding the underspend – members of the panel stated if grants had been received then they should have been spent and the outturn balanced. These funds should not be set aside to address the cumulative deficit.
· It was clarified by the Head of Finance that all funds claimed from the Welsh Government through the hardship fund had covered additional costs and loss of income due to the pandemic. Other additional funding streams have offset expenditure that would have been incurred from the Councils budget. Some grants were provided which were unhypothecated and these were contributing to the underspend position
· Further information regarding any reduction in CO2 due to reduced mileage was requested together with any future revenue savings now that the Authority can manage with reduced travel. Further work would be carried out during the year. It was suggested that a high level report be brought to Finance Panel with individual service delivery models being scrutinized at the appropriate committee.
· It was noted that the travel policy for officers had not been amended although this may happen in the future
· An underspend in Highways was noted and criticised given the poor state of some roads – it had not been possible to make all spend during the year and where appropriate, funds will be rolled over into the current financial year
· 76% of cost reductions had been delivered. Some had been written off as undeliverable and a more detailed report will be submitted in due course.
· There had been no draw down from capital receipts for transformation costs and these funds remain available for the current and future years
· The Panel remained concerned regarding the Capital Programme and the increase in revenue that would be required to support capital costs. The Portfolio Holder commented that in the longer term, capital projects would reduce the use of the revenue budget by delivering integrated services.
· The Medium Term Financial Strategy (MTFS) remains under considerable risk. A three year budget would be ideal and work would recommence on achieving that. The budget gap still has to be resolved and budget planning scenarios need to be reviewed. The Finance Panel would be kept informed of progress.
Outcomes:
· Further information to be provided on:
o CO2 reductions and associated revenue savings
o Details of grants that have been received
Supporting documents: