The Interim Chief Officer – Finance, Performance and Change reported on an update on the Council’s revenue financial performance for the year ended 31 March 2020.  She informed Cabinet that Council at its meeting on 20 February 2019 had approved a net revenue budget of £270.809 million for 2019-20.  She summarised the overall outturn as at 31 March 2020, which showed a net under spend of £563,000, which had been transferred to the Council Fund, which brought the balance to £9.339m in line with Principle 9 of the Medium Term Financial Strategy.  She informed Cabinet that Total Directorate budgets provided a net under spend of £1.765 million, and Council Wide budgets a net under spend of £7.690 million, offset by the requirement to provide new earmarked reserves for a range of new future risks and expenditure commitments to meet specific costs.  The main reason for the under spend of £6.050 million on ‘Other Corporate Budgets’ is due to the Welsh Government advising local authorities of additional grant funding being made available during 2019-20 to meet the increased cost of teachers’ pensions (£2,006,096), fire service pensions (£272,405), and teachers’ pay increases (£343,701), all of which were originally funded in full through the MTFS. The Interim Chief Officer – Finance, Performance and Change informed Cabinet that the under spend significantly masked the underlying budget pressures in some service budgets which were reported during the year and still persist, in the service areas of Looked After Children (LAC), Home to School Transport and Waste collection and disposal, where a number of historical budget reductions remain unrealised

The Interim Chief Officer – Finance, Performance and Change reported that the net position also took into account council tax income of £1.502m during the financial year.  One of the main reasons for the accrued council tax income was due to a combination of the removal of the discount and the Empty Property Strategy which has delivered a significant impact.  Additional properties built in 2019-20 has also contributed to the accrued council tax income. 

The Interim Chief Officer – Finance, Performance and Change outlined the position on the monitoring of budget reduction proposals, of the £2.342m budget proposals outstanding, £1.883m had been realised, leaving a balance of £459,000.  She informed Cabinet that of the budget reduction proposals for 2019-20 totalling £7.621m, there is a shortfall target of £806,000.

The Interim Chief Officer – Finance, Performance and Change commented on the financial position at 31 March 2020, highlighting the most significant variances.   The Interim Chief Officer – Finance, Performance and Change informed Cabinet of the uncertainties on other Council wide budgets and the financial impact of Covid-19 pandemic on the Council’s budget for 2020-21, any balance of funding from council wide budgets will be carried forward to meet pressures.  A covid-19 earmarked reserve has been created at year-end of £3m and once the financial position for 2020-21 is known with more certainty, any potential recurrent under spends will be considered for future MTFS savings.

The Interim Chief Officer – Finance, Performance and Change reported on the position on the Council’s earmarked reserves in order to meet the needs of the organisation which total £8.3m. 

The Deputy Leader welcomed the net under spend reported and informed Cabinet that he was grateful to the Welsh Government for the additional funding to meet the increased cost of teachers’ pensions, fire service pensions and teachers’ pay increases.  He expressed concern at the decrease in school balances during 2019-20.  The Interim Chief Officer – Finance, Performance and Change informed Cabinet that schools’ budgets are monitored throughout the year and schools are assisted in the recovery of their financial position.  The Corporate Director Education and Family Support informed Cabinet that a recovery plan is put in place where schools’ find themselves in a challenging financial position. 

The Cabinet Member Wellbeing and Future Generations informed Cabinet that she was pleased to see 866 empty properties brought back into use as a result of the implementation of the empty property strategy.  The Leader thanked the Finance Team for the careful way in which the finances of the Council are managed.  He highlighted the importance of the Council holding reserves which enables the Council to be able to respond in an agile way to pressures.  He stated that he was hopeful the Welsh Government would reimburse the Council with the expenditure it had incurred during the pandemic.

RESOLVED:            That Cabinet noted the revenue outturn position for 2019-20.