To consider the Audit Wales report and the Authority’s response.
Minutes:
Documents:
· Audit Wales – Financial Sustainability Assessment, Powys County Council
· Report of the Head of Finance
Discussion:
· The report covered the second phase of work across Wales into the financial sustainability of local authorities. The Committee had previously considered the report into phase one which included a national report and an individual report.
· Work was undertaken between February and April 2021
· Key findings:
o The medium-term budget gap needs to be addressed. Focus was on the forthcoming year with less detail provided for future years
o Capital Strategy – the Committee had raised this issue themselves. The capital programme was ambitious and there was a need to ensure it was affordable. Further detail was required regarding the forecast and timing of capital receipts and the impact of the capital financing requirement on future revenue budgets.
o Budget Planning Processes – the Authority had been on target and balanced their budget, but it was not clear if this was due to sound financial practices or additional funding provided by the Welsh Government during the pandemic. There is a need to ensure there is effective monitoring of budget planning processes.
· The Head of Finance reported the requirement to comply with the Financial Management Code. An assessment against the Code had been completed some years ago with the Authority score being relatively low. An Action Plan had been prepared and was in place and progress made against that Plan – 62% of actions showing a green RAG status and the remaining 38% being amber. There were no red actions. It is proposed to have a workshop with the Committee to go through the detail of the assessment and consider any outstanding actions. Governance and Audit Committee should monitor delivery of the Plan. The recommendations within the Audit Wales report are contained within the Plan.
· The budget gap is highlighted within the budget proposals and must be addressed over the medium term. Once the budget for 2022/223 is approved, work to address the budget gap will become the key focus.
· Integrated Business Planning is becoming embedded, and it will be that process which will bring the budget together. The Head of Finance is satisfied that the budget process is more robust.
· The Committee asked Audit Wales to comment on the Council’s response and whether it was adequate. Audit Wales accepted the response and will continue to monitor to ensure actions have an impact.
· The Portfolio Holder welcomed the report and noted that the Finance Team were always open to suggestions for improvement. He noted that a three-year indicative budget settlement from the Welsh Government had been given which would assist in the process of addressing the budget gap. He was keen to see continuous improvement.
· The Chair was pleased to note that the issues raised corresponded with those raised by the Committee during the year.
· Audit Wales reported that there was a Financial Sustainability Tool on their website which would enable Members to view comparable data across Wales including the net cost of services, reserves etc. This will be continually developed.
Outcomes:
· The report to be forwarded to Scrutiny Chairs for information
· A workshop will be arranged to consider a self-assessment and action plan
· The Audit Wales report be accepted
Supporting documents: