Agenda item

The Leader presented the report, which dealt with the revenue budget at the November 2020 position.  It confirmed the latest forecast showed an underspend of £2.7 million.  This was an increase on the September position which showed a forecast underspend of about £1.7 million, and reflected the improved forecast position within schools and also lower than anticipated demand currently being experienced with adult social care as a consequence of the ongoing Covid-19 pandemic.  The bottom line underspend was inclusive of the £1.4 million revenue budget contingency which was currently not required and accounted for just under half of the overall underspend.  Other in-year underspends were linked to some one-off budget savings this year due to, mainly, significant delays in recruitment and also far less miscellaneous expenditure being incurred than normal, for example travel/subsistence and printing costs.  The forecasts made the assumption that the current areas of spend and lost income in relation to the Covid-19 situation would continue to be reimbursed and supported by the WG. 

In terms of key issues, undelivered MTFP savings represented the largest individual budget issue at this time.  The performance on forecast delivery of savings was significantly impacted by the Covid-19 situation and whilst this position had improved since that reported in September, there remained over £1 million of undelivered savings.  Any undelivered savings at the end of the year would still need to be delivered as soon as possible in the following year but that would be in addition to any new savings for the 2021/22 financial year.  In that sense, whilst unavoidable, it would cause problems and be challenging. The Leader asked the Chief Executive, Heads of Service and Cabinet Members to focus on these now as much as was reasonably possible and continue the improvement.  This was carried out in the most challenging context and situation and the Council was doing what it could to reduce pressure for next year.  In addition to this, the other area of budget pressure was the continuing demand on social care budgets; children’s in particular, and a £725 thousand overspend was forecasted.  The overspends were offset by savings against other service / non-service areas totalling nearly £3 million, resulting in an overall underspend of £1.2 million, which was then added the currently unused general contingency budget of £1.47 million.

Whilst the level of forecast overspending across schools was an area of significant concern throughout the year, a forecasted underspend was anticipated as shown in the report.  Forecasts were reviewed in light of the impact of the pandemic and the reimbursement that the schools would receive from the Welsh Government hardship fund and one off funding received.  It was pleasing to note that school revenue budget forecasts had improved and this would increase the overall school reserves to nearly £1.7 million.  The Leader was mindful however that school budgets continued to be under significant strain and many schools were still projecting an overspend in the current year.  Officers continued to work with individual schools on their financial recovery plans and this was showing good results. 

The forecasts showed that the Council was in a good position to face the challenges that were met.  More work was required and was underway to review what unavoidable ‘catch up’ spending was needed to make next year and would be taken into account in assessing uses of the underspend. That element should not be significant in itself.  This would also allow the Cabinet to consider how best to utilise the underspend.  The Leader was mindful of the on-gong risks of Covid and uncertainty at this point of the full package of support that Councils would receive next year for unavoidable Covid related costs and lost income faced in the first quarter or half year.  Brexit was also potentially going to be an issue as much of the detail was still unknown and could have an impact.  These would be key issues to consider as well as other Cabinet priorities and the usual need for one-off funds to support projects.  The council would consider these in detail in due course but the position allowed flexibility to assess the above issues.

Comments from Cabinet:

Councillor Giles thanked all school staff, head teachers and Governers and would ensure support in every possible way for education to continue to provide a service to pupils.

Councillor Truman was concerned about the ambiguity around Brexit regulations and training for officers advising that clarification was needed. 

Councillor Cockeram referred to Children Services and child referral, which had increased during the pandemic and the need to be mindful of this, as another lockdown was a serious issue for the safeguarding of children.

Agreed:

Cabinet was asked to:

·         Note the overall budget forecast position and the significant overspending areas that was predominately resulting from undelivered MTFP savings impacted by the on-going pandemic; the risks associated with this and recommendation that Heads of Service (HoS) continued to focus on implementation of agreed savings;

·         Note the planning assumptions within the forecast position and in particular, the uncertainly around (i) the ongoing impact that Covid would 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 that had the potential to face schools in future should schools not manage within approved budget and the serious impact it was likely to have on the Councils other revenue budgets and reserves and that further work was in progress to review forecasts;

·         Note that work was in progress to identify the impact of unspent budgets and grant funded areas to determine what needed to be carried forward to next year.