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 2020/21 and progress against the agreed budget strategy, and

(b)       approve the setting up of a reserve to allow Working Denbighshire to manage their finances more effectively.

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 £1.759m was forecast for service and corporate budgets

·        highlighted current risks and assumptions relating to individual service areas

·        outlined the financial impact of coronavirus and position on claims to the Welsh Government to date in terms of expenditure and income loss

·        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 setting up a reserve to allow Working Denbighshire to manage their finances more effectively.

Councillor Thompson-Hill guided Cabinet through the various elements of the report and movements since the previous month.  He also took the opportunity to update members on the Welsh Government grant scheme for local businesses administered by the council and paid tribute to the tireless work of those staff involved in the swift processing of over 1300 claims amounting to approximately £4.5m in the latest funding tranche.  Cabinet acknowledged the hard work of those staff in administering the schemes who had worked above and beyond to ensure swift payments to eligible claimants and conveyed their appreciation in that regard.

The Head of Finance advised that confirmation had now been received that the Quarter 3 income loss claim had been approved by Welsh Government (WG) and he was also pleased to report on other WG funding streams being made available late in the financial year which would impact positively on the Council’s finances and be included in future monitoring reports to Cabinet.  Finally, mention was made to the improved position in schools which was largely due to the ongoing impact of Covid-19 and confirmation of approved funding for particular items of expenditure.

Councillor Thompson-Hill and the Head of Finance responded to questions raised by Councillor Mark Young as follows –

·        the disallowed payments for loss of income mainly related to Quarter 1 claims in respect of the Housing Revenue Account.  Given that only half of local authorities managed their own housing stock with others operated by Registered Social Landlords, the WG had disallowed councils’ claims in that regard to ensure parity

·        most of the holding items on the expenditure claims related to technical queries around free school meals and on the income claims largely related to deferred income such as planning fees and council tax; it was now expected that WG would fund local authorities for that loss of income in year

·        in terms of the wider issue of national funding and recent announcement that WG would receive an extra £650m from the UK Treasury for additional Covid-19 spending, it was noted that any of the extra funding not spent by April could be carried over to the next financial year, and there was an expectation that additional monies would be allocated to local authorities with the implications of the announcement being discussed in the coming days.  Councillor Mark Young highlighted that WG also had a substantial amount of money which must be spent before April and he was keen for that funding to be committed as soon as possible given that councils and businesses were struggling financially.

Councillor Hugh Irving also paid tribute to the work of staff in administering the grant funding schemes and queried the processes in place to safeguard against payment of fraudulent claims.  The Head of Finance confirmed that there had been investigations nationally and given the guiding principle had been to release funding as quickly as possible there was likely to be an element of fraud.  However due to the procedures in place for processing claims in Denbighshire, and the necessary eligibility checks having been carried out individually prior to payment, he felt the scope for payments made for fraudulent claims would be limited if at all.  Councillor Huw Hilditch-Roberts added that he was aware that some attempts for claims in Denbighshire had been disallowed thereby demonstrating assurance in the process.  He welcomed the support and grant funding available for businesses but expressed concern that more recent start-up businesses had not been eligible for financial support and he was aware that WG were looking into that and hoped funding would be made available for those new businesses going forward.

RESOLVED that Cabinet –

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

(b)       approve the setting up of a reserve to allow Working Denbighshire to manage their finances more effectively.