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  • Agenda item

    October Revenue Budget Monitor

    Minutes:

    The Leader confirmed there are still significant spending pressures, which are not diminishing, and the Leadership contest for the Prime Minister can only add to the situation Local Government is facing in these times of austerity.  The Council continues to show it is mitigating the pressures and the certificate of compliance issued by the Wales Audit Office confirms we are showing good financial management.

     

    This report shows the latest revenue budget forecasts to the year-end. The position has not changed significantly since this was last reviewed; the Council’s revenue budget is forecasting an underspend of approximately £3 million, which, whilst a significant figure, equates to approximately 1% of the Council’s budget.

     

    The Leader stressed the importance of noting that this report does not include any impact of the recent additional funding for this current year that Welsh Government announced recently.

     

    There has been robust planning and management of some of the budget risks with contingencies built in to manage those risks.  The built-in contingencies, other underspending and one-off income are currently offsetting overspending in four areas of activity.  Those activities are in the Council’s children & adult social care and education special needs areas and are forecast to overspend by some £5m this year.  Put simply, the demand is rising for these services and Newport’s demographic for adult social care is far outstripping previous years.

     

    At this point in the financial year, the Council can have increasing confidence in its forecasts and therefore it is proposed to put £2million of the underspend into the Invest to Save reserve to provide capacity for the Council to face the on-going future financial challenges. This will leave a sufficient level of underspend to deal with any further demand and cost issues that may arise between now and the end of the financial year or for investment; this will be closely monitored. 

     

    Regarding additional funds from Welsh Government mentioned earlier in the meeting, this will include new specific grants for this year for schools and social care, however, Newport awaits confirmation from Welsh Government on its share of the additional funds.  The extra funding will help to reduce the current schools’ and social care overspending this year and will therefore benefit the schools’ reserves position at the year-end, which will be very useful and much needed.  The next budget monitor to this Cabinet will incorporate the additional monies.  

     

    The Leader stressed that the job of managing budgets is becoming increasingly difficult and whilst the Council clearly have challenging areas, this Council continues to deliver robust management of the overall budget and the risks within it.  The Leader thanked her Cabinet colleagues and officers for the work done to date and asked that they continue to be vigilant and robust for the last quarter of this financial year.

     

    Cabinet colleagues reiterated the difficulties being faced in continuing to provide services in times of austerity.

     

    Decision:

    Cabinet agreed to:

    ·        Note the overall budget forecast position including use of all budget contingencies to balance forecast service overspending;

    ·        Agree to instruct all areas of the Council to maintain robust financial management;

    ·        Note the level of undelivered savings within each directorate and the risks associated with this;

    ·        Agree the transfer of £2million into the ‘Invest to Save reserve’;

    ·        Note the forecast movements in reserves;

    ·        Note the projected and worsening balances of individual schools over the next year.

     

    Supporting documents: