Venue: MS Teams
Contact: Anne Jenkins, Governance Team Leader Email: Cabinet@newport.gov.uk
Apologies for Absence
Declarations of Interest
The Minutes of 16 June 2021 were accepted as a true and accurate record.
The Leader presented the report. This report fulfilled the Council’s responsibility to receive and approve an annual treasury management outturn report each year. The report dealt with the outturn for 2020/21 and had already been reviewed by the Audit Committee where no comments were made and would go to Council following this Cabinet meeting.
The report presented the following information:
· Details of capital financing, borrowing, debt rescheduling and investment transactions
· Reports on the risk implications of treasury decisions and transactions
· Details the outturn position on treasury management transactions in 2020/2021 which confirmed compliance with the treasury limits set by Council.
The Covid pandemic had an impact on Treasury Management during 2020/21. Since the early days of the pandemic the Council had to monitor a significant increase in cash-flow activities throughout 2020/21, coming from the making of business grants and the Business Rates Relief Scheme in particular, and also by its own increased costs and lower income level. The Welsh Government provided significant up-front cash-flow support to ensure Councils were adequately financed to administer the business rates and business grants scheme, reimbursed Councils throughout the year for their increased costs and reduced income, as well as loading its RSG grant support towards the first half of the year. Alongside the slippage in the delivery of its own capital schemes and underspending on its revenue budget, this meant cash-flow was more positive than a ‘normal year’ which gave rise to lower borrowing activity and much more short term investing activities.
This did not reduce the need to borrow commitment the Council had but did slow down the pace at which that borrowing was taken up towards that commitment level.
Notwithstanding the aforementioned, in line with the agreed Treasury Management Strategy, the Council still continued to be both a short-term investor of cash and borrower to manage day-to-day cash flows in 2020/21.
Turning to borrowing activities specifically. Whilst the Council had significant long-term borrowing requirements, the Council’s current strategy of funding capital expenditure utilises ‘internal borrowing’ rather than undertaking new borrowing where it could. It can do this because of its ‘cash-backed’ reserves and at 31 March 2021, the level of internal borrowing was about £107m which saved, at current interest rate levels, about £2.4m in interest costs annually compared to physically borrowing this level of cash.
The financial year was relatively quiet in terms of borrowing activities, as shown in Appendix B to the report:
· The Council repaid a short-term loan taken out in March 2020 to specifically cash-flow and facilitate early payments of business grants in April. This was reimbursed by the Welsh Government and the loan repaid, as planned in June 2020.
· In March 2021 the Authority undertook borrowing on a short term basis in order to cover normal day to day cash flow activities.
· Lastly, a minimal amount of new long-term borrowing was required to be taken out in the second half of the financial year totalling £94k. This borrowing was from ‘Salix’ which was interest free and was ... view the full minutes text for item 4.
The Leader presented the report. The report detailed the final outturn position of the Authority for the financial year 2020/21 that ended on 31 March 2021.
2020/21 had been a year like no other. As the Covid pandemic developed rapidly from March 2020, services were reprioritised to deal with the immediate response to support communities across Newport and this lasted, to various extents, for all of the financial year. Although there were significant additional costs incurred to deliver this response to our communities these costs were funded by the Welsh Government.
Not only did the council work closely with the Welsh public sector to support communities and businesses across Wales, we also acted as an agent for the Welsh Government in processing £51m of support payments across a number of government led schemes plus a further £20m of business rates holiday for the leisure and hospitality sectors.
The underspend of £14m had arisen, in the main, due to services being diverted from their regular activities in order to prioritise Covid response. Specifically:
· The council received in the region of £23m of one off Welsh Government funds to compensate the Council for additional costs incurred in response to the pandemic and the lost income experienced due to Covid restrictions;
· There were significant underspends across all service areas due to changes in service provision and working practices, and;
· Linked to the above, there was an underspend against the general revenue contingency budget, council tax reduction scheme and council tax income – all of which were non-service budgets.
There had however been some one off and recurring issues that were raised within the report that would be addressed by officers, for example, the delivery of savings. Whilst 82% of the savings target was achieved in 2020/21, there were delays in implementation due to the impact of Covid and robust plans were needed to ensure that these savings were fully delivered in addition to the new savings agreed for 2021/22.
Furthermore, impact on operational services due to the continuing pandemic and the additional work this created was unknown at this time. Although, the Welsh Government hardship fund was set to continue for the first six months of 2021, what happened beyond this time remained unclear.
Section 4 of the report explained in detail the areas that had the potential to affect the financial position in the current year, 2021/22 and these areas would continue to require specific oversight from the Senior Leadership Team.
As for the position of schools, these variances were covered by the school balances reserve, the overall underspend of £14m did not include the schools position. For 2020/21 schools underspent by £8.4m which would see school balances increase from £1.1m to £9.5m as at the 31 March 2021. Schools made significant savings during the period of school closures, not only as they had the ability to claim for additional Covid related costs, but also due to over £4.7m of unexpected grants being received in late March.
The projected school balances improved ... view the full minutes text for item 5.
The Leader presented the report. This report provides the final Capital outturn for the 2020/21 financial year. Specifically, it requests:
· approval of budget carry forwards to fund slippage of existing project expenditure into the new financial year at £7.134m,
· approval for new capital projects to be added to the Council’s Capital Programme. These are very significant at £24.795m, and
· approval for a revised Strategic Outline Plan (SOP) figures for the Education Band B capital programme to be provided to Welsh Government with the intention of collectively reviewing the affordability of existing aspirations and potentially sourcing additional funding.
It also provides an update on the current available capital resources (‘headroom’), including the confirmation of Welsh Governments grant funding of £7m towards the new leisure centre project and impacts and action taken on that.
The Council has set an extensive capital programme that reflects a seven year commitment. Table one in the reports shows how that has changed over the financial year and shows the Councils capital commitments and spend in the city now totals £274m over the life of the programme, across all service areas.
Table two in the report shows the position in 2020/21, which is the focus of this report. It confirms a small underspend on completed projects of £749k and the report details those. It also highlights the need for slippage on spending of £7.1m where projects delivery and spend have fallen behind the financial profile for those. The capital budget for 2020/21 has been reviewed and reduced over the year, but this slippage has still occurred and is significant at about 21% of the budget, though consistent with previous years. Details of the major areas of slippage are included in the report.
Slippage of the capital programme is a recurring theme and can sometimes be caused, in part at least, by late notification of external grant funding which leaves little time to deliver projects in the same year. In saying that, as the report shows, slippage, alongside the significant increase in new projects which are included here for our approval has increased the budget to about £100m in the current 2021/22 financial year.
This clearly now requires a review and the whole programme reviewed in terms of timing of delivery. This will happen over the Summer/early Autumn and I would ask that senior officers do this as robustly as they can – it needs to be realistic and allows the Corporate Management Team and Cabinet to take a view on that and deal with any issues it may highlight.
We are also being asked to approve, as usual, new capital projects to be added to the overall programme. In this report, we have an unprecedented amount of new additions, the vast majority funded from Welsh Government grants, which were only confirmed from February onwards. Some of which had a significant impact on the city. These included:
· Nearly £1.7m on ‘place-making projects’ which was currently being developed,
· Nearly £10m on ‘active travel schemes’ which would provide a huge ... view the full minutes text for item 6.
The Leader presented the report. In February 2021, a discussion paper was presented to Overview and Scrutiny Management Committee titled ‘Responding to the New Normal’. This detailed how the Council had responded to the Pandemic and the benefits and challenges associated with the new ways of working which were implemented.
A follow up paper, in essence the report put to Cabinet, was presented to OSMC in June 2021 for comment.
Cabinet were asked to agree to a series of recommendations, which would set the direction of travel for the organisation. These took into account both the experience and evidence gathered over the last 15 months, organisational commitments, opportunities that had arisen, staff expectations and legislative requirements.
If Cabinet agreed with the recommendations, then the commencement of consultation with Trade Unions and staff would take place to discuss any potential changes to terms and conditions of employment and develop more detailed plans in association with the use of the Civic Centre, prior to a final report being presented to Cabinet in the Autumn.
Both Members and officers of the Council adapted to the way in which they worked in order to respond to the Covid 19 Pandemic. The Council’s focus was to ensure the safety of the public, our staff and Elected Members.
Whilst this had been incredibly challenging it created opportunities, like many other public and private sector organisations, have explored.
The report covered four main areas:
· Our staff,
· The use of our main building, the Civic Centre and how we worked with the public,
· How we managed the democratic functions of the Council, and
· How we utilised technology
The first key decision was whether to press forward with the cultural and operational changes implemented as a result of the pandemic, or return to the pre-Covid model.
Maintaining the flexibility that the Council’s Covid response created enabled us to meet our Corporate Plan commitment of freeing up 20% of the Civic Centre to save money and create space for commercial and social innovation.
Having more staff working from home or close to home supported the Climate Change agenda and helped work towards carbon net zero. 45% of all carbon emissions in Newport came from transport. The report showed that 75% of staff commuted to work by car before the Pandemic.
In relation to staff, the councilconsidered responses from employees during the pandemic. Many appreciated the opportunity to work flexibly and this had an impact on staff sickness. However, it was also worth noting that the reduction in stress related absence was not as positive and we needed to consider the well-being impacts on staff. The Council was were currently consulting with Trade Unions on a new Wellness at Work Policy and this should result in an improvement in levels of support for staff.
The report highlighted the potential remuneration that would be to considered for staff if we designated their home as a place of work. It should be noted that the report was not advocating that staff should ... view the full minutes text for item 7.
The Leader presented the report. This report was prepared by the Chief Education Officer with a decision being required by Cabinet.
The Welsh Government procured Meridiam Investments as its private sector partner to work on the delivery of education and community facilities in Wales under the Mutual Investment Model (MIM) of the 21st Century Schools Programme, and confirmed this as their preferred delivery method moving forward.
Some Local Authorities and Further Education institutions already entered into a Strategic Partnering Agreement with Welsh Ministers which supported this arrangement, and this outlined how the relevant parties would act together over the long term in a collaborative partnering manner to support the delivery of education and community facilities and infrastructure services across Wales.
The original Strategic Partnership Agreement was completed in September 2020, but there was now an opportunity for other Local Authorities who were not part of this arrangement to enter into a supplemental “Deed of Adherence”. This would enable Newport to become a party to the Strategic Partnership Agreement for an initial term of 10 years.
The decision to enter into this Deed of Adherence at this stage did not commit the Council to any MIM project, nor was there any immediate financial impact. It simply provided the Council with a “seat at the table” to set priorities and have an understanding of the delivery plans for other participants across Wales.
In entering into this Deed of Adherence, the Council was required to nominate a “Participant Representative” to sit on the Strategic Partnership Board, and the report recommended that the Chief Education Officer be nominated to undertake this role.
Whilst making no commitment to specific projects, agreeing to enter this Deed of Adherence would ensure that the Council was able to access the benefits associated with the Strategic Partnership Agreement over at least the next 10 years.
The Leader invited the Cabinet Member for Education and Skills to speak on the report.
The Cabinet Member advised colleagues that the 21st Century Band B Welsh Education partnership was a supplemental agreement, which would ensure local authorities could work together collaboratively, to work up qualifying projects to ensure there was capacity, capability and a focus on best practice.
It was an opportunity to draw down on a range of strategic support and infrastructure service and procurement enabling and developing a project or a new build, which could be seen to sector leading and importantly value for money.
The Cabinet Member also recommended approval of Sarah Morgan to be the Council’s participant representative on the strategic partner board as this would ensure consistency and continuity in any decision making process.’
(a) Approved the execution, delivery and performance of a supplemental agreement to the WEP Strategic Partnering Agreement dated 30 September 2020 (the “Deed of Adherence”) and from the date of execution of the Deed of Adherence to give effect to and be bound by the terms of the WEP Strategic Partnering Agreement dated 30 September 2020 as a ... view the full minutes text for item 8.
Leader presented the report. This Cabinet Report was an update on the Council’s and its partners’ response to the Covid-19 crisis supporting the City (Residents and Businesses) to comply with the current restrictions and progress in the Council’s Strategic Recovery Aims and Corporate Plan.
· Since the last Cabinet meeting June, Wales started to see the Delta variant emerge as the most dominant strain.
· In Newport, cases were being reported to the Test, Trace and Protect service and remained low and contained into small clusters. The service alongside Aneurin Bevan University Health Board, the Council and other partners were working proactively to support those affected and to break the chain of the virus spreading.
· The vaccination programme in Wales delivered by NHS Wales, ABUHB, with the Council’s (Newport Live) support continued to be successful as it progressed towards under 25s receiving their first dose and those receiving their second dose.
· The vaccination programme delivered in Wales in not just one of the best in the UK but in the world and it was important for those who had not taken up their vaccination to do so as it not only protected the individual but others.
· The Welsh Government Roadmap was phasing into Alert Level 1 restrictions over this summer period. This cautious approach was taken due to the emergence of the Delta variant and further understanding required on the impact that this was having on those that received their vaccination and those that had not been vaccinated.
· It was important for residents and businesses to continue to adhere to the restrictions as we went through the final stages in the roadmap.
· As the Welsh Government advised, we would have to learn to live with the virus and would remain vigilant throughout the year.
· The Council continued to deliver services whether this was across residential homes, visiting clients, collecting waste or staff working from home.
· Schools continued to respond and support pupils where covid cases were reported.
· Funding was confirmed for the relocation of the Information Station to the Central Museum and Library building.
· Newport Live continued to engage and supported young people in Newport working alongside community safety partners.
Further updates on the Council’s progress would be provided next month.
Comments from Cabinet Members:
§ Councillor Truman briefly referred to the delta variant, which was on the increase and that Environmental Officers and Trading Standards Officers were working jointly with the Police to inspect various public premises to ensure that the right precautions were in place to protect the people of Newport. In addition, officers we giving out business advice and on some occasions, issuing improvement and closure notices as well as being on hand to provide advice and work on some of the clusters within Newport. The Cabinet Member supported the advice in Wales that social distancing be continued.
§ Councillor Davies mentioned that the delta variant impacted on young people directly and schools had seen an impact, it was hoped that younger people would be sensible in ... view the full minutes text for item 9.
Leader presented the report, which was an update on the post Brexit/trade arrangements since December 2020.
Since the previous report in June 2021 the deadline (30 June 2021) for EU/EEA citizens to apply for EU Settled Status had passed.
The UK Government (Home Office) reported that many citizens had applied and received the outcomes of their Settled Status application.
This Cabinet, Welsh Government and other local authorities maintained that people from the EU, EEA or Switzerland were and would always be welcome in Wales and Newport. The contribution that this made to our communities, public services and businesses was invaluable.
The Home Office reported 5,020 people were granted Settled Status and 3,350 granted Pre-settled status in Newport. While this was very positive for Newport, there were still people who would not have applied and were likely to be some of our most vulnerable citizens.
The Council’s frontline services had already seen EU residents and their families experiencing hardship was a result of their migration status. Now that the deadline passed, it was expected that the numbers would increase in the next year.
Newport Council, alongside its partners, would continue to do its utmost to ensure people were supported to exercise their rights in the UK and raise awareness across staff and other professionals of the needs of EU citizens.
Since the new trade arrangements were in place with the EU, it was a challenging time for businesses across Wales to adjust and comply with the new regulatory requirements.
The wider economy was also facing many challenges with supply chains and costs of particular goods and services increasing to meet consumer demand.
There were also certain sectors in the economy such as transport and hospitality that were also facing labour market shortages. While much of this could be contributed towards the Covid crisis there was also evidence indicating that Brexit was having an impact on particular areas of the economy.
To date, the Council and the delivery of some of its projects did not identify any significant areas of concern in relation to their supply and costs. This would be an area which the Council would continue to monitor closely over the next six months.
With the UK no longer able to access European funding and existing EU funded projects finishing over the next 18 months, the UK Government launched two new funds: Levelling Up Fund and the UK Community Review Fund for local authorities across the United Kingdom to apply.
Despite the short timescales, which the Council had to prepare and submit applications, Newport was able to submit projects that would benefit Newport and its communities.
If successful, the Levelling Up Fund provided an exciting opportunity for Newport to regenerate the Northern Quarter of the City with the ‘greening’ of key areas and streets around the train station providing a gateway into the rest of the city centre.
For the UK Community Renewal Fund, we received 11 applications from private, not for profit, charity and other sectors of the economy. ... view the full minutes text for item 10.
This is your regular monthly report on the work programme.
Please move acceptance of the updated programme.
Cabinet agreed the Cabinet Work Programme for June 2021 to June 2022.