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.

Vote taken: 8 in favour, 0 against, 0 abstentions

RESOLVED that Cabinet notes the budgets set for 2020/21 and progress against the agreed budget strategy.

Councillor Julian Thompson-Hill presented the report detailing the latest financial position and progress against the agreed budget strategy as outlined below –

·        the net revenue budget for 2020/21 was £208.302m (£198.538m in 2019/20)

·        an overspend of £7.393m was forecast for service and corporate budgets (the overspend did not assume any ‘income loss’ grant that may be received)

·        highlighted current risks and assumptions relating to individual service areas together with the financial impact of coronavirus and Leisure ADM budgets

·        detailed required savings and efficiencies of £4.448m to be identified and agreed including corporate savings relating to triennial actuarial review of Clwyd Pension Fund (£2m); 1% school savings (£0.692m); service savings (£1.756m)

·        provided a general update on the Capital Plan, Housing Revenue Account and Housing Capital Plan.

The Lead Member elaborated upon the latest financial position taking into account the financial impact of Covid-19 but it was noted that the significant uncertainties made it extremely difficult in terms of financial planning.  In highlighting the projected overspend it was hoped that the figure would reduce during the course of the year following confirmation of grant allocations and as lockdown restrictions eased and a number of other measures were also actively being considered.

The Head of Finance stressed that it remained a fast changing situation.  Up to £78m had been announced in the supplementary budget for losses of income in Quarter 1 against which a ‘dummy claim’ totalling £68m had been prepared for submission by local authorities across Wales (reductions in expenditure had to be offset against loss of income reducing the overall claim amount).  No formal announcement had been made regarding losses of income in Quarter 2.  It was also reported that the social care grant had been formally extended to June 2020.

Cabinet discussed the following matters in further detail –

·         with regard to the £78m announced in the supplementary budget for losses of income in Quarter 1, Councillor Mark Young expressed his disappointment that the full amount would not now be available with Welsh Government using some of that funding for other purposes.  The Lead Member and Head of Finance explained how the estimated level of income loss for local authorities had been calculated and highlighted the various changes made to those calculations since the original estimations which had resulted in a reduced ‘dummy’ claim of approximately £68m.  It was understood that a proportion of the £78m would be allocated for other recovery purposes and a decision was awaited on whether the local authorities’ claim for loss of income would be paid in full

·         the Leader referred to the work undertaken and financial pressures faced by local authorities which had been acknowledged by the Minister for Local Government.  He also highlighted the need for appropriate financial support to deliver Welsh Government initiatives, such as the Track, Trace and Protect (TTP) Programme, which had also been raised with the Minister via the Welsh Local Government Association.  The Minister had provided some assurance that local authorities would be fully reimbursed for delivering those new initiatives.

In response to a question from Councillor Barry Mellor regarding the process for signing off the statement of accounts, the Head of Legal, HR and Democratic Services confirmed that the usual process would be followed.  The draft statement of accounts would be considered by Corporate Governance Committee in July and again in September for final approval.

RESOLVED that Cabinet notes the budgets set for 2020/21 and progress against the agreed budget strategy.