Agenda item

The Leader presented the report that provided Cabinet with the September revenue monitoring position which shows an under-spend of nearly £1.7m; the under-spend includes £1.4m of uncommitted contingency which if required will reduce the overall under-spend.  The Leader reported that the contingency may be required as progress is made through the remainder of the financial year, with the impact of the Covid-19 second wave being unknown.  Therefore, expenditure the Council may need to pick up may be over and above that available to the Council from the Welsh Government Hardship Fund. 

The reported under-spend at this stage of the year is a positive position for the Council and is an improvement on the previous position reported to Cabinet for July.  The September Monitoring report reflects the clarification of funding that has been made available by Welsh Government in relation to Covid-19 related loss of income and increased expenditure.

Another positive reported is that there has been an improvement in the service areas’ forecasts, including a £400k improvement in the projected delivery of savings. 

The following key budget issues were identified which Heads of Service have been asked to review and put in place mitigating actions to resolve:

·         In spite of the improvement previously reported, there is still £1.1m of savings which are yet to be delivered.  This is largely due to the Covid pandemic which has delayed the implementation of the savings, but as the pandemic continues there is a risk that the delay in delivering these savings may continue into the next financial year.  Therefore Heads of Service need to agree actions to mitigate these delays if savings continue to be undelivered.

·         As reported in previous months there is increased demand reported in a number of areas of social care including Children’s Independent Fostering Agency spend showing a forecast overspend of £450k and Emergency Placements in the current circumstances projecting an overspend of £354k. 

·         Schools’ position has changed since the previous forecast and is showing an in-year over-spend of £1.3m, which will mean them going into an overall deficit balance position of £186k.  This highlights a very challenging position, and it is recognised that schools are delivering through unprecedented and uncertain times.  However, as the year progresses, with Welsh Government confirming increased costs of cleaning and cover for staffing which is Covid-19 related being reimbursed through the hardship fund, there is still the potential for this position to improve. 

The Leader confirmed the over-spend highlighted is offset by savings across service areas, including

significant staffing savings and also reflects a saving on the Council Tax Reduction Scheme budget of £900k.   However, this is offset somewhat by a £500k overspend on Council Tax income collection, which has seen a significant decrease in collection since the start of the pandemic, and an amount will have to be set aside at year end for the possibility that this may not be collected.  It is important to note that the Council Tax Reduction Scheme position reflects that Welsh Government have funded the increase in demand for the scheme resulting from the pandemic.  The Leader was pleased to see such very positive support from Welsh Government in relation to this.  

The Leader summed up by confirming that overall, whilst this monitoring report is showing an overall under-spend position, this is in the backdrop of uncertainty surrounding the pandemic for the remainder of the financial year, and will be monitored closely and updated in future reports.

Cabinet was asked to:

·         note the overall budget forecast position and the significant overspending areas which is predominately resulting from undelivered MTFP savings impacted by the on-going pandemic, the risks associated with this and recommend that HoS continue to focus on implementation of agreed savings as soon as is possible;

·         note the planning assumptions within the forecast position and in particular, the uncertainly around (i) the ongoing impact that Covid will have upon service areas and (ii) funding support available from Welsh Government (WG) for the remainder of the financial year;

·         note the forecast movements in reserves;

·         note the significant financial challenges facing schools and the serious impact it will likely have on the Councils other revenue budgets and reserves and that further work is in progress to review forecasts.

Decision:

Cabinet voted and unanimously agreed the report and for the Corporate Management Team to take a targeted approach to reducing spend across service areas whilst ensuring management of key budgets and risks.