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 –

(a)       note the budgets set for 2020/21 and progress against the agreed budget strategy;

(b)       approve the recommended use of the Schools Maintenance Grant which has been awarded to the Council by the Welsh Government, as recommended by the Strategic Investment Group and as detailed in the report and Appendices 5, 6 and 7 to the report;

(c)        approve the recommended use of the Welsh Government indicative grant allocation awarded to the Council for damage to highways assets as recommended by the Strategic Investment Group and as detailed in the report and Appendices 8, 9 and 10 to the report, and

(d)       approve the recommended use of the Childcare Capital Grant which has been awarded to the Council by the Welsh Government, as recommended by the Strategic Investment Group and as detailed in the report and Appendices 11 and 12 to the report.

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 £2.476m was forecast for service and corporate budgets (the overspend included £2.7m paid for ‘income loss’ grant for Quarter 2)

·        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 agreed including corporate savings relating to triennial actuarial review of Clwyd Pension Fund (£2m); 1% schools savings (£0.692m); service savings (£1.756m)

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

Cabinet was also asked to approve the use of grant allocations as recommended by the Strategic Investment Group relating to (1) Schools Maintenance Grant, (2) Recovery from February Floods (Highway Assets), and (3) Childcare Capital Grant and those elements were further elaborated upon at the meeting.

Councillor Thompson-Hill reported upon the latest financial position in detail, particularly with regard to the financial impact of Covid-19, including grant funding secured to date and the position on claims for the council.  The £2.475m forecasted overspend (£5.492m last month) included £2.7m paid in respect of the ‘income loss’ grant for Quarter 2 (full claim amounted to £3.233m.).  Narrative had also been provided around service variances with movements from the previous month highlighted.  Although corporate budgets currently showed a nil variance it was likely that all discretionary spend and contingencies would be released in order to help fund the position with risks still remaining around the Council Tax Yield and the Council Tax Reduction Scheme.  Un-earmarked General Balances may also need to be reviewed as the impact of the pandemic continued to be felt.

The Lead Member and Head of Finance responded to questions as follows –

·         the disallowed column in respect of claims submitted related to elements of the claim which Welsh Government (WG) had determined were not eligible and therefore would not be paid.  On the expenditure side claims of £119,649 had been disallowed which related to elements WG did not consider to be additional expenditure and in some cases it was difficult for services to judge eligibility but the guidance provided by WG had become clearer over time and the council had become more adept at the claims process and practised open book accounting.  Income loss claims disallowed amounting to £642,922 had mainly been attributed to initial claims for HRA losses and cross authority charges.  HRA losses had been disallowed for regulatory reasons as they had to be treated the same as Registered Social Landlords and claims for income from other local authorities were no longer eligible following a regional agreement that those contract payments between authorities would be met.  Consequently the total amount disallowed did not represent income lost that would not be regained but reflected a refining of the process for particular services

·         the holding column in respect of the claims submitted related to those elements of the claim for which WG had requested additional information and evidence before determining whether or not the claim would be paid, and further information on the methodology used for calculating loss of income for car parking was used as an illustrative example.  Work was ongoing with WG in that regard and there was confidence that most of the holding figure for Quarter 2 would be paid by year end.  There was some concern regarding claims submitted in respect of elements such as planning fees where WG considered there to be a delay in funding and the same approach had been taken to Council Tax yield where money was still owed – that loss would not be crystallised until year end and bad debt provision. However WG had agreed to review the position on Council Tax in January and it was hoped by then to also have further clarity on some of the other holding elements to report back to Cabinet.  Given the scale of the claims on the income side no income had been assumed in the monitoring report which represented the worst case scenario and a reduction in the overspend was expected on payment of future claims in Quarters 3 and 4.  As most income was dependent on the tourist element the loss of income and associated risk decreased over the winter months

·         with regard to past references in the Rhyl Queen’s Market Redevelopment project detailed within the report the Leader confirmed that the wording would be re-considered for future reports to reflect the most recent progress and position

·         the list of schools building maintenance works in the report included all items put forward for grant funding.  Given the finite amount of funding available officers had carried out a prioritisation exercise of the works required as the basis for allocation of that funding and the items with figures in the cost estimate column were the priority works proposed to be carried out.  Those works not selected would be carried forward for consideration as part of future funding allocations

·         recovery from February floods – in terms of the revenue element the council had not qualified for emergency response funding because it did not meet the £250k spend threshold with approximately £115k incurred in direct response.  However the WG confirmed they would make capital funding available to be spent in the current financial year for damage caused and the council had submitted a list of schemes with estimates amounting to approximately £1.3m and indications were that a formal grant award for the full amount would be forthcoming

·         in response to questions raised by Councillor Arwel Roberts with regard to Cylch Meithrin at Ysgol Dewi Sant, Councillor Huw Hilditch-Roberts provided assurances regarding the commitment to support the situation in Ysgol Dewi Sant and Welsh Language provision and confirmed the intended investment in the site – given the type of work required there was a longer timescale but supporting the Welsh Language remained a priority for the council.

RESOLVED that Cabinet –

(a)       note the budgets set for 2020/21 and progress against the agreed budget strategy;

(b)       approve the recommended use of the Schools Maintenance Grant which has been awarded to the Council by the Welsh Government, as recommended by the Strategic Investment Group and as detailed in the report and Appendices 5, 6 and 7 to the report;

(c)        approve the recommended use of the Welsh Government indicative grant allocation awarded to the Council for damage to highways assets as recommended by the Strategic Investment Group and as detailed in the report and Appendices 8, 9 and 10 to the report, and

(d)       approve the recommended use of the Childcare Capital Grant which has been awarded to the Council by the Welsh Government, as recommended by the Strategic Investment Group and as detailed in the report and Appendices 11 and 12 to the report.