Agenda item

To consider a report by Councillor Gwyneth Ellis, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) detailing the final revenue position for 2021/22 and proposed treatment of reserves and balances.

RESOLVED that Cabinet –

(a)       notes the final revenue outturn position for 2021/22;

(b)       approves the proposed treatment of reserves and balances as described in the report and detailed in Appendices 1, 2 and 3, and

(c)        notes the details of transfers to and from Earmarked Reserves as set out in Appendix 4.

Councillor Gwyneth Ellis presented the report on the final revenue outturn position for 2020/21 and proposed treatment of reserves and balances.

The Head of Finance and Property guided members through the detail of the report and appendices as outlined in brief below –

·       the final outturn position on service and corporate budgets (including schools underspend of £6.778m) was an underspend of £9.177m

·       in March the Welsh Government announced a one-off increase in the Revenue Support Grant for 2021/22 of £60m (DCC share £1.994m) with request that £10m (DCC share £0.332m) be used to fund improvements to travel arrangements for care workers including electric vehicles; the residual £1.662m would be placed in the budget mitigation reserve to help the Council deal with inflationary pressures

·       detailed the 2021/22 budget service savings and efficiencies required (£2.666m)

·       highlighted the impact of coronavirus and the significant grant funding received from the Welsh Government – £10.9m had been received by the end of the financial year with the assumption that the outstanding final grant claims (£4.1m) would be paid in full

·       an overall school balance of £12.448m would be carried forward (an increase of £6.778m on deficit balances brought forward into 2021/22 of £5.670m) with much of that funding to be used in 2022/23 to recover from the impact of Covid

·       key elements of the underspend in corporate budgets (£1.964m) largely related to centrally held contingency budgets for service overspends, pay settlements, energy costs and Business Rates

·       given the overall position within services and the availability of corporate funds, it was proposed that services carry forward the net under spends listed as committed services balances to help deliver the 2022/23 budget strategy and meet existing commitments

·       it was expected unused base budget contingencies in 2021/22 would be required to fund the impact of inflationary cost increases in 2022/23

·       provided full details of the transfers to and from Earmarked Reserves.

The following matters were raised during the ensuing debate –

·       Councillor Gill German welcomed the position on school budgets and timely support from Welsh Government with funding available to address the impact of the pandemic and challenges ahead and paid tribute to the way in which schools had responded during the pandemic.  She also recognised that families were struggling with the cost of living rises and funding support for early years and family link workers would be crucial in mitigating the impact on children

·       there was some discussion on the financial management of schools and it was anticipated that school budgets would reduce significantly over the next three years as the funding was spent to ensure schools and pupils recovered from the pandemic, and the close working between schools, education and finance teams was highlighted to ensure that schools had appropriate financial plans in place and sustainable school budgets going forward.  Specific support had been provided previously for schools in financial difficulty and that support would continue for schools facing financial pressures to ensure a robust recovery plan

·       with regard to the potential use of reserves and balances for capital expenditure it was explained that they were reviewed annually as part of the budget process.  The budget mitigation reserve was used to support budget setting and could be used for capital purposes if decided by Council.  The capital programme for the next financial year had benefitted from additional £1.6m Welsh Government funding and the finance report to be submitted to the next Cabinet meeting would include a summary of the capital programme for the new financial year and recommendation that £1.6m be put into the contingency for the capital programme to help fund pressures arising from the tendering process due to the significant increases in the costs of goods and materials

·       as part of the budget process in 2022/23 some revenue funding had been earmarked to fund borrowing and enable delivery of some of the projects identified as part of the horizon scanning exercise with further work to be carried out in order to provide a process of reviewing and approving those projects

·       Councillor Huw Hilditch-Roberts referred to post-Covid recovery and sought clarity on the future of Denbighshire’s buildings and occupancy together with the effect on finances and highlighted the impact of empty buildings on the local economy.  During the ensuing debate officers reported upon the New Ways of Working Project and current phase of allowing staff to decide their own working patterns subject to the business needs of the Council being met.  The situation would be monitored over the next 6/8 months with a view to determining the best way forward in terms of developing a strategy for asset management which might include alternative uses for buildings or collaborative working and sharing of office space.  A debate followed on post-Covid recovery and the workplace and both the potential advantages and disadvantages of staff returning to office buildings versus home working and the impact on wellbeing, local economies and the carbon footprint of those future working patterns.  Assurances were given that the energy efficiency of council buildings was taken into account as part of that process.  It was noted that the approach to determining future ways of working would be based on the needs of staff, taking into account work/life balance and service delivery, and any potential savings arising from future ways of working would be secondary.  It was also noted that Denbighshire’s approach was similar to other local authorities and work was ongoing to further discuss those approaches and share best practice, and more information in that regard could be shared with members as the situation developed.

RESOLVED that Cabinet –

(a)      notes the final revenue outturn position for 2021/22;

(b)      approves the proposed treatment of reserves and balances as described in the report and detailed in Appendices 1, 2 and 3, and

(c)      notes the details of transfers to and from Earmarked Reserves as set out in Appendix 4.