Agenda item

To consider a report by Councillor Julian Thompson-Hill, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) detailing the latest financial position and progress against the agreed budget strategy.

RESOLVED that Cabinet –

(a)       note the budgets set for 2018/19 and progress against the agreed budget strategy, and

(b)       note and agree the use of reserves, underspends carried forward and the release of contingencies in order to help mitigate the overall budget pressures that the Council is facing.

Councillor Julian Thompson-Hill presented the report detailing the latest financial position and progress against the agreed budget strategy.  He provided a summary of the Council’s financial position as follows –

·        the net revenue budget for 2018/19 was £194.418m (£189.252m in 2017/18)

·        an overspend of £1.164m was forecast for service and corporate budgets

·        detailed agreed savings and efficiencies worth £4.6m including those which had already been achieved with the assumption that all service efficiencies/savings would be delivered – any exceptions would be reported to Cabinet if required

·        highlighted current risks and variances relating to individual service areas, and

·        provided a general update on the Housing Revenue Account, Housing Capital Plan and the Capital Plan (including the Corporate Plan element).

Debate focused on the level of overspend on service budgets and concerns in that regard given the movement of projected outturn figures.  Cabinet was asked to agree the use of reserves, underspends carried forward, and the release of contingencies to help fund the service overspends.  The Chief Executive explained that the figures had been largely driven by demand pressures which could not have been foreseen and she would be working with senior leadership colleagues on potential short term in-year measures to reduce the overspend with any wider impact of those measures being in full consultation with Lead Members.

Highways and Environmental Services was currently projected to overspend by £728k (£98k reported in September) and the main points of debate referred to –

·        School Transport – despite an additional £300k allocation following operation of the revised transport policy additional pressures had been identified; the new ongoing pressures for 2018/19 amounting to £593k were currently being discussed as part of the Medium Term Financial Plan for 2019/20 onwards.  There was some debate as to whether this budget would be best placed in Education and Children’s Services for greater clarity and accountability although it was an acknowledged pressure which needed to be resolved wherever it was located.  Officers explained the reasoning behind the current position given that Education and Children’s Services carried out the assessment process to determine eligibility of a child for school transport but the commissioning arrangement for those eligible for school transport was undertaken in Highways and Environmental Services because of the expertise and skills set required for negotiating the school contracts.  Officers would be meeting to discuss the main causes of the overspend following which it may be opportune to consider where School Transport would be best placed

·        Major Projects – this had been an issue over recent years.  The main reason for the income shortfall related to the amount of work and re-imbursement coming from the North and Mid Wales Trunk Road Agency (NMWTRA).  It was proposed an in-year budget allocation of £140k be released from centrally held contingencies to resolve the pressure on an ongoing basis and a cash reserve of £159k kept to help fund the pressure in future years be released to help fund other pressures in the service.  It was clarified that the amount invested in Denbighshire’s highway network did not necessarily relate to the amount of work generated via NMWTRA given that highway work was also carried out by other contractors.  Councillor Brian Jones added that budgeted income had been set too high and would be revised in the next financial year to reflect the reduction

·        Streetscene – Councillor Brian Jones elaborated upon the £200k cost required to remedy an issue with ‘Legacy Tips’ in order to meet statutory requirements

·        Waste – the pressure in 2018/19 would be funded from the Waste Reserve and a budget pressure of £850k had been included in the Medium Term Financial Plan for 2019/20.  A proposed new Waste and Recycling Service Design had been considered by Communities Scrutiny Committee

There was also some discussion on the recently announced provisional budget settlement for Denbighshire and the impact on diminishing reserves and funding going forward.  The settlement left the Council with difficult decisions to make in order to deliver the required savings which would be considered by Cabinet and Council in due course.  It was noted that further pressure was being put on Welsh Government via the Welsh Local Government Association and Council Leaders to discuss the funding pressures and financial settlement for local government.  Reference was also made to the recently announced Autumn Statement and the Head of Finance advised that the headline figures had indicated additional resources for Wales but the detail of the funding announcement and whether it would result in any additional funding for local government was as yet unknown.

Other issues discussed as part of the finance report included the following –

·         Major Capital Projects –

Rhyl 3 – 16 Faith School – Councillor Huw Hilditch-Roberts and the Head of Education and Children’s Services explained the complexities and difficulties in the recruitment and appointment process for a head teacher for the school and provided assurances that officers were working in partnership with the Diocese and the Governing Body to secure the best appointment for the school and ensuring that preparations for the opening of the new school were robust to deliver the best educational offer for pupils

Rhyl Harbour Development – in terms of the maintenance contract for the Pont y Ddraig bridge it was clarified that the full cost of the maintenance arrangements had not been captured in the original costing for the bridge given its unique design which subsequently needed to be resourced

Rhyl Waterfront and Waterpark – the reasoning behind the relocation of the Tourist Information Centre (TIC) was explained which would enable commercial activity on the vacated Children’s Village and add value to the TIC by co-locating it with Rhyl Museum at Rhyl Railway Station.  There was a recognised need for a TIC in Rhyl and a physical presence and it was believed bringing the TIC and Museum together would complement each other and add value to both services.  The TIC was provided jointly with North Wales Tourism and the type of offer would be remodelled and adapted as a result of the move

·         Summary of Agreed Savings – Councillor Mabon ap Gwynfor raised a number of concerns regarding the agreed savings.  It was explained that the savings had been agreed the previous year for the current year 2018/19 and had been reported in the same format to Cabinet since then.  It was assumed the savings would be delivered.  Preparations were currently underway for next year’s savings and suggestions for potential savings to be delivered were welcomed.

RESOLVED that Cabinet –

(a)       note the budgets set for 2018/19 and progress against the agreed budget strategy, and

(b)       note and agree the use of reserves, underspends carried forward and the release of contingencies in order to help mitigate the overall budget pressures that the Council is facing.