Agenda, decisions and minutes

No apologies received.

There were no declarations of Interest. 

The minutes of the meeting held on 24 June 2020 were confirmed as a true record. 

The Leader presented the report that detailed the final outturn position of the Authority for the financial year 2019/20 that ended on 31st March 2020.

The report confirmed that 2019/20 was not significantly impacted by the Covid-19 pandemic as lockdown did not come into force until the latter end of March, when the financial year was closing, therefore there was little impact on the Council finances for the financial year.

In relation to the outturn, the financial year could be seen as a positive outcome as the Council managed its overall budget, and the revenue outturn showed an overall underspend of £2 million.  Cabinet would therefore be asked to approve how this underspend was utilised. 

Key movements and Main variances

There were a number of key movements between the position that was reported in the January monitoring position.  Overall, the underspend increased by £377k, largely because service areas overspend decreased specifically in the demand led areas of social care.  There was however, a lower underspend reported across non-service. 

In terms of the main variances reported at outturn, there was a consistent message throughout 2019/20 regarding significant overspending within a few key areas, and this proved to be the case at year end.  The three key areas of overspending which contributed £2.1m overspending related to Adult Social Care Community Care - £955k, Children’s independent fostering - £598k and Children’s out of area placements - £553k.

The Council was able to mitigate the overspend through use of its £1.4m contingency and underspend on a number of areas including capital financing, Council Tax Reduction scheme and council tax surplus.

It was very important to note that this pattern of overspending in service areas had occurred for a number of years and due to reduction in budgets in some of the non-service areas, demand pressures on CTRS and Council Tax arising from the Covid-19 pandemic, non-service underspend may be unable to mitigate overspending in future years.

The Head of Finance therefore recommended that the Senior Leadership Team put in place a robust specific monitoring process with the social care management teams to review financial management issues in detail.

Schools position

Schools variances were covered by the schools balances reserve, therefore the overall underspend of £2m did not include the schools position.  For 2019/20 schools overspent by £2m, with the secondary sector overspending significantly, this meant that total schools reserves ha fallen from £3.1m to £1.1m.

The position at individual school level was challenging with 67% of secondary, 12% of primary and 50% of special schools being in nil or deficit balances.  Of particular concern was the secondary sector, with 5 schools with in-year overspending of between £175k and £328k, one of these schools had a deficit reserve in excess of £1m. Schools reserves were likely to reduce further in 2020/21 unless action was taken to reduce costs with the challenge being that the reserve balances were not available to offset overspending to this level in future.

The Head of Finance reminded Cabinet that  ...  view the full minutes text for item 4.

The Leader presented the report focussing on two parts of the capital programme.  Firstly the outturn position of the 2019/20 financial year and the impact on the capital programme on the slippage that occurred.  Secondly, the additions to the capital programme since the last capital report to Cabinet.

Capital outturn 2019/20

During 2019/20 there was significant capital expenditure of £31m across a number of important projects across Newport including completion of the Band A and continuation of the Band B 21st century school programme, as well as a significant maintenance programme across a number of schools.  Support provided for regeneration initiatives in the city centre including offices at the old sorting office in Mill Street and Chartist Tower, roll out of smaller bins which had improved the recycling rates and investment in energy saving schemes including the street lighting LED project.  A number of these projects would continue to be completed over the remainder of the programme, which currently ran to 2024/25.

The 2019/20 outturn position highlighted that despite being a significant re-profiling of budgets during the financial year, there remained significant slippage at year end of £8.5m, this effectively meant that the programmed expenditure to occur in 2019/20 did not happen and the budget was “rolled forward” or slipped to the next financial year.  It was important to note that a large amount of slippage related to schemes that span over a number of years, therefore it should not be seen that this budget was not required, the spend would be incurred at a later date.  This was allowable (with the exception of time limited grants) within regulations.

Slippage was however unhelpful in modelling for treasury management and capital financing budget purposes, therefore it was important that heads of service reviewed their capital projects on a regular basis and updated the profiling of the budget and spend when they were aware of changes. 

As well as the slippage there was a small underspend relating to a small number of completed projects of just above £400k. 

The main variances from the budget were outlined in the report, and the slippage had occurred across a number of service areas, which was not unique to one individual area.  Tthe programme would need to be reviewed early in the financial year and individual project budgets re-profiled in line with more realistic and deliverable spending profiles. The next capital monitoring update to Cabinet would include an updated programme reflecting this review.

Changes to the approved programme

Prior to this report the Council already had an extensive capital programme to 2024/25, this report highlighted further additions to the programme of over £16m taking the overall programme to £202m.

All of the additions shown in the table of the report were extensive, but to highlight a couple of the main ones:

-           A further £3.3m for Basseleg School in addition to Section 106 funding for Band B

-           £2.1m Education Maintenance Grant from Welsh Government

-           £970k Targeted Regeneration Inititative funding to help city centre redevelopment  ...  view the full minutes text for item 5.

The Leader presented the report, which detailed the treasury management activities of the Council for 2019/20.  It was a report that looked back, confirming that all borrowing and investments undertaken during the financial year were expected and in line with the agreed limits set by Full Council.  It also confirmed that 2019/20 Prudential Indicators for treasury management were also met in line with those set by Council.

The Councils current strategy was to fund capital expenditure through reducing investments, rather than undertake new borrowing where it could, such as defering taking out new long term borrowing and fund capital expenditure from the Council’s own cash resources, mainly reserves. By using this strategy the Council could minimise cash holding at a time when counterparty risk remained relatively high, especially with the current economic implications during Covid-19.

The level of internal borrowing was around £87m, and by using this strategy it was estimated the Council saved about £2.6m in revenue cost based on current interest rates. 

The level of external borrowing the Council held at 31st March 2020 was still significant at £166m, this would only increase in future years as our ability to be internally borrowed reduced as reserves are utilised. 

Of this £166m, it was important to note that an additional £15m of borrowing was undertaken to enable the Council to be a front-runner in supporting the response of Covid-19 and administering business grants to businesses in Newport, prior to the funding being received by Welsh Government.

The investment balance at 31st March 2020 was £12.5m, taking net borrowing to £153.8m, this was an increase of £17.2m on the previous year.  It should be noted that the Council would keep a minimum investment balance to satisfy the requirements of being deemed a professional body for compliance purposes.

The report detailed non-treasury investments as required by Welsh Government, this included investments in directly owned property such as commercial and industrial units, loans to local businesses and landlords and shareholdings in subsidiaries which would be Newport Transport.  The total value of these investments at 31st March 2020 was £14.5m.

The Leader invited Comments from Cabinet:

Councillor Harvey echoed the Leader’s thanks to officers for their hard work. Members were contacted by businesses affected by Covid and appreciated that officers had gone over and above for businesses within Newport.

Councillor Rahman also mentioned that Maindee had suffered but because of the quick action from the Council a lot of small businesses and families affected received financial support with a slow recovery taking place.  Businesses within other council areas asked how did Newport City Council act so quickly and this was because Newport was ahead of the curve.  Councillor Rahman thanked to Leader and officers for reacting so promptly at the beginning of the Covid pandemic, as well as helping residents who were shielding.

Decision:

It was agreed by Cabinet to that the report could be taken to Full Council for approval.

The Leader presented the May budget report, which was the first forecast of the year and highlighted the key financial issues arising from the Covid-19 pandemic and the ongoing impact that this may have upon the 2020/21 revenue budget.

It was important to note that during these unprecedented times there were a number of uncertainties around the lifting of the lockdown and what measures would need to be put in place that impacted on Local Authorities.  A number of assumptions have therefore been required to be made within the projections including assumptions on further Welsh Government funding, future expenditure and income recovery.

In the first quarter of the pandemic the Council took significant steps to respond, with services transitioning into an essential services model delivering core services to the most vulnerable and the most affected by the threat of the virus. 

During the first quarter, the Council had faced significant costs in delivering these services, however, up to the end of June, this expenditure was largely covered by the financial support provided by Welsh Government through the hardship fund.  This fund covered specific groups such as homelessness, free school meal provision, social care providers and also a general fund to support Local Government to support the response to Covid-19.  The Council had finalised its claim for June, with the value claimed by Newport for the quarter of over £7m. 

There were however a number of ongoing financial pressures that would continue during this pandemic, including continuing additional costs to support our vulnerable residents and to maintain core services, and loss of income as a result of the pandemic.

These were in addition to other challenges facing the Council budgets including overspends on demand led services, delivery of savings (some of which have been directly or indirectly impacted as a result of the pandemic), and also the impact of on-going school budget overspending.

The May position was forecasting an overspend for the financial year of £5.4m assuming the that the revenue contingency budget was fully committed, this would reduce to £4m if the contingency remained available at year-end.  This was a significant overspend against budget and reflected the challenge the Council continued to face in its response to the pandemic.

The main overspending areas that contributed to the position include the following, unavoidable costs that continued beyond the first quarter and were not assumed to be funded by Welsh Government of £1.7m; £3.7m in relation to loss of income as a result of the pandemic; c£400k of demand led service area overspending in social care; £1.1m undelivered savings for 2020/21 and c£840k due to the impact of schools overspending.

As highlighted earlier, the current situation added a layer of complexity and uncertainty to the forecasts, which needed to be worked through and forecasts wold be updated through the year as there was more certainty provided around the recovery requirements and associated funding.

It was envisaged there may be both upsides and downsides relating to the current forecasts.  The upsides being that  ...  view the full minutes text for item 7.

The Leader presented the report advising those present that critical worker and vulnerable children childcare has been in place since schools closed in March.  This has run alongside the partial opening of schools for other learners since 29 June.

Collaborative planning between Officers and head teachers was highly effective to develop a shared understanding issues and to address these concerns as quickly as possible.

Students have not sat exams this year and therefore their summer grades would be based on coursework and teacher predicted grades.

Schools were challenged by families for their adherence to Welsh Government advice and not mixing ‘bubbles’ of children between and within settings.  This was put into operation in line with expert advice to protect children, staff and the wider community.

Around 5400 children and young people across Newport continued to be supported by a Free School Meal (FSM) scheme.  Following the closure of schools in March the support developed from providing a lunch for collection from school to a voucher scheme sent directly to families.

The EAS have worked with schools to support the development of an effective blended learning programme, which supported learners in childcare provision, check-in classes and those who have not yet returned to school.

The Leader invited the Cabinet Member for Education and Skills to speak on this item.

The Cabinet Member for Education and Skills informed Cabinet that within days of closing in March a significant number of childcare hubs for children of critical workers and vulnerable learners were in operation alongside the provision of distance learning.  In addition to this, schools were supporting pupils transitioning to secondary school and to post-16 opportunities. 

A total of 36 childcare hubs operated across the city enabling children to access childcare in their community.  Since schools reopened on 29th June around 400 children had continued to attend childcare each day enabling critical workers to attend employment.  It was challenging for schools to provide this service whilst also offering other children the ability to attend school to check in and catch up with school staff, whilst following their risk assessments which promoted the safety of all on site. 

There remain a number of key areas to address.  Provision of school transport, whilst adhering to social distancing requirements, posed a significant challenge, particularly for those learners attending Welsh Medium, Special and Catholic schools.  Whilst some transport was in place, further was required for the autumn term.

Almost 800 digital and around 1260 MiFi units devices were issued to families to support distance learning.  Additionally, a school wifi network allowing children and young people to bring their own devices to school (BYOD) was established.  Building on this success remains a priority.

Pupil attendance at schools was not compulsory since schools reopening on 29th June and attendance at individual schools varied from between around 30% to 90%. 

On 9th July 2020 Welsh Government announced that Schools would return to full capacity by mid-September, with only limited social distancing within contact groups.

At full operations, a contact group  ...  view the full minutes text for item 8.

The Leader presented the report, highlighting that Western Gateway was established in November 2019, this was a strategic partnership which aimed to deliver an economic powerhouse along the M4 and M5 corridor, driving growth on both sides of the Severn.  As one of five cities, Newport was expected to be a key player in the success of the partnership and stood to profit from the benefits greater collaboration would bring.    

The region was already considered a major economic powerhouse containing three city regions, each of which had identified improved physical and digital connectivity, higher skills and employment levels, plus innovation, as being pivotal to their future economic development and prosperity.  As a region we had a higher GVA per head than the Northern Powerhouse and the Midlands Engine and a pre lockdown economy in the region of £107 billion, nearly double that which existed with the former Great Western Cities partnership. 

As a partnership we had nearly 4.4 million residents, approximately 160,000 businesses and in the region of 2.1 million jobs.  We also enjoyed excellent connectivity with major motorways and roads, 2 airports and 9 ports. 

A prospectus was published and included at the end of the report.  It confirmed that the Western Gateway was ‘propelling a greener, fairer, stronger Britain.’  Three primary ambitions focussed on connectivity, being a global gateway, and innovation and all of these things resonated with the economic growth aspirations of Newport. 

In respect of connectivity, Newport residents and businesses could benefit from quicker and more frequent services to London, a direct link to Heathrow and other core cities, and a Western Gateway smart ticket providing quicker travel around the region in a ‘golden hour’.  There was a commitment to provide more electric charging points along the M4 and M5 and we needed to be part of the aspiration to be the UKs most digitally connected region. 

As a global gateway, there was huge potential to deliver a strategy which focused on trade, investment, the role of the ports and airports and the visitor economy.

In terms of innovation, the region had 10 Universities and a number of specialist academies and centres.  Newport’s cyber and software academies were considered key features of the innovation offer and being associated with other Innovation Centres such as the UK Digital Retail Innovation Centre in Cheltenham and Gloucester and the UK Space Agency in Swindon would increased our ability to collaborate and complement other exceptional research facilities. 

Work is currently underway in relation to the governance structure of the partnership and the group are working towards formalising the partnership through the creation of a Partnership Board and Advisory Groups which are supported by a dedicated secretariat.  An independent Chair has been appointed and Kathryn Bennett from Airbus is already leading discussions with UK Government on the benefits of the Western Gateway region. 

An Independent Economic Review was commissioned which would provide an evidence base for future policy development and investment, something which was made more urgent by the  ...  view the full minutes text for item 9.

The Leader presented the report advising that at the last Cabinet meeting on 24th June, we agreed a number of Strategic Recovery Aims, which would underpin the corporate priorities as the Council moved into the recovery phase following the relaxation of the Covid-19 restrictions.

One of those commitments was to ensure that we introduced revised governance and democratic arrangements as soon as possible to facilitate the commencement of remote meetings, to change the way in which we operated and there was a continuing need for members to participate remotely in democratic decision-making processes.

As an Administration, we have been fully committed to a democratic decision-making process, which was open, transparent and publicly accountable. The immediate Covid-19 lock-down however, meant that all formal committee meetings needed to be suspended in March and decisions taken under member and officer schemes of delegation. That did not mean that there had been a lack of transparency or that delegated decisions taken during this period have not been capable of scrutiny and challenge. All Councillors have continued to be consulted in writing on all Cabinet Member report and written reports on Planning and Licensing decisions. In addition, members have been able to submit written Questions at Any Time, particularly in relation to Covid-related matters.

In the interests of open government, there was a need to re-commence meetings, once the law was changed to permit this to be done safely and remotely. We have endeavoured to do this in a pragmatic and phased manner, with the emphasis on getting this right rather than rushing to arrange virtual meetings quickly.

Therefore, we called for a further report with proposals for the phased introduction of remote Council meetings, recommended protocols and procedures for the conduct and management of these meetings and a training and development programme for members to ensure that they were able to participate fully in these revised governance arrangements.

The Report sets out the proposal and Cabinet was asked to approve and endorse the revised governance and democratic arrangements and the proposed Protocol for the conduct of remote meeting.

Although this was intended to apply during the immediate Covid-19 recovery period, we recognised that there would be a continuing need for the flexibility provided by remote meetings in terms of the local government equalities and diversity agenda.   Therefore, these procedures would be kept under review and re-evaluated. We would look to refine and improve the remote arrangements, where appropriate, and would continue to look at further enhancements in technology.

This meeting today was the next step, as it was being broadcasted live. The press and pubic were able to click on the link published with the Cabinet agenda to view these proceedings via the live-stream. 

This technology could then be rolled-out to other Council and Committee meetings.

The forward work programme proposed that we hold a remote full Council AGM on 28th July, to deal with statutory appointments. August recess would be used to plan for the re-commencement of Planning and Licensing Committees as  ...  view the full minutes text for item 10.

The Leader presented the report, which was the authority’s third Strategic Equality Plan. This strategy represented an evolution from our 2016-2020 plan, with more outcome based objectives that were developed by working closely in partnership with various teams across the authority and in collaboration with key stakeholders and communities.

The Equality Objectives within this Strategic Equality Plan, have a good mix of internally focused objectives, such as our commitments to improving our workforce diversity through greater positive action, and more externally focused objectives such as our ongoing commitment to improving community cohesion across the city. This balance of internal self-reflection and an outwardly focused commitment to improve equality in key areas of our society is the strength of this strategy and I am confident it represents a positive step forward for Newport City Council.

The past few months, and no doubt the next few months to come, have been challenging, and have exposed many of the structural and social inequalities that continue to persist in our society, from the global Black Lives Matter protests, to our exit from the European Union, and of course the ramifications of the global COVID-19 pandemic. We find ourselves at a societal cross road as we look to recover and learn from events that have touched us all, but have impacted specific groups in our communities so acutely.

The Leader moved for the adoption of this strategy and thanked both the Cabinet Member for Community and Resources, David Mayer and Cllr Mark Whitcutt for their contributions to the plan and the Strategic Equality Group over the past four years.

The Leader invited Comments from Cabinet:

Councillor Mayer felt that Newport was ahead of the curve to address inequality in 2012.  This paved way to integrate equality in all services.  The Problems identified during the Covid pandemic brought this into the public eye.  The Equalities team worked hard to embed this practise into the report and Councillor Mayer thanked all the team who contributed for their hard work.

Councillor Rahman echoed the comments stating that it was an important piece of work on what the Covid pandemic had uncovered and highlighted the risks and vulnerability of front line workers with no other choice but to risk catching Covid to earn a living to support their families.  Work therefore needed to be done to address this.  Councillor Rahman was part of the task force looking at the socio economic links in the BAME community, with the Welsh Government.  With this in mind, he felt that Newport was ahead of WG and reason for that was because of the excellent work of officers involved at the outset.  The Councillor also referred to the support provided for people with disabilities as well as the LGBTQ+ community support networks.  Finally, Councillor Rahman thanked the Leader for her outstanding contribution and thanked officers for their hard work.

Councillor Giles also thanked everyone associated for their work with the youth council, who stepped up to the plate to support young people and  ...  view the full minutes text for item 11.

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