Invitees

Councillor Huw David - Leader

Councillor Hywel Williams - Deputy Leader

Councillor Stuart Baldwin - Cabinet Member for Communities

Councillor Nicole Burnett - Cabinet Member for Social Services and Early Help

Councillor Dhanisha Patel - Cabinet Member for Future Generations and Wellbeing

Councillor Charles Smith - Cabinet Member for Education & Regeneration

Mark Shephard - Chief Executive

Lindsay Harvey - Corporate Director - Education and Family Support

Gill Lewis - Interim Chief Officer Finance, Performance and Change

Claire Marchant - Corporate Director - Social Services and Wellbeing

Janine Nightingale - Corporate Director - Communities

Kelly Watson - Chief Officer Legal, HR & Regulatory Services

The Interim Chief Officer Finance, Performance and Change explained that, as requested, she would not go through all the details in the report as Councillors had been given the opportunity to hear the report previously, but commented, for the record, that Members would see a summary of the financial position and drew attention to the narrative which demonstrated that it was an incredibly unique position, this year. As explained previously at Cabinet and Council, the money from the Welsh Government (WG) hardship fund in the first instance, the money from the significant grants that were received in the last quarter, at least £9m in terms of one-off grants that were for specific purposes and the subsidy on Council Tax collection, were the reasons why the year end position looked so different from what had been expected and the position reported to COSC in quarter 3 that had been expected.

The second point, which had been made at Cabinet and Council, was that the overall position remained quite difficult going forward. There were incredible pressures, the Country was still not out of the pandemic and the Directorate Budgets in the main still had an underlying deficit position. The schools’ position, in particular was masked by nearly £9m of one-off grants, whereas actually what had been forecast was the majority of schools being in deficit.

It was that uncertainty of the pressures of the future and as Members would have seen in the press, a number of Directors of Finance having to issue Section 114 Notices where their local authorities were actually in danger of going bankrupt, in around 35 Councils.  A tale of two halves was being seen, of a unique significant surplus but the underlying position could be quite perilous.

Members of the Committee asked the following:

A Member referred to the Interim Chief Officer Finance, Performance and Change mention of the grants and hardship funds that had been received in the last few months and the forecast at COSC Q3, which had been a quite different position, and asked if the budgets were foreseeable.  The current outturn budget masked the real position, but Bridgend was one of 22 Local Authorities in Wales and how many local authorities in England and Scotland were in the same boat.

The Interim Chief Officer Finance, Performance and Change clarified that she felt that the picture was not real, as it stood.  It was a true picture in terms of accounting and recording the entries and gave a position, in terms of the earmarked reserves and what those were for, but it did not give the real picture.  Just two items could make up £2m in deficit, most of the schools were close to running into deficit positions and some of them were in deficit.  It was unique in terms of timing, but it was not unique across Wales.  Each of the 22 Welsh local authorities were in a similar position in terms of grants and the hardship fund, but were not all in the same position in terms of their balance sheets and their strengths of reserves.  Audit Wales were completing a second piece of work on financial sustainability, which said that despite the underlying deficit position, the Council still had a fairly strong level of reserves, which is where the Interim Chief Officer Finance, Performance and Change wanted to be going into a very uncertain future in terms of the pressures being faced.  She was heartened by this as she was constantly looking at other councils that were facing very difficult positions, a lot of which had entered into large commercial enterprises and some getting into difficulties.

A Member referred to the two particularly volatile budgets, referenced in the report, namely Adult Social Care and Home to School Transport, and the decision by the WG to review the statutory distances for Learner Transport and the Cabinet decision held pending the review outcome. She sought reassurance that Officers were still working on the policy and asked if Members could be updated on what was happening, so that when the WG Review was completed, action could be taken to ensure this pressure was alleviated.

The Corporate Director - Education and Family Support provided assurance that with the overspend position being dealt with, Home to School Transport was a significant matter within the Directorate and this was being worked on continuously. The outcome of the WG review was awaited, but procurement was being examined to make sure it was being delivered as effectively and efficiently as possible.  The Corporate Director - Education and Family Support agreed to provide an update of this ongoing work.

Clarification was sought whether the 35 councils that had declared as close to bankruptcy referred to by the Interim Chief Officer Finance, Performance and Change, included any of the 22 Welsh local authorities.

The Interim Chief Officer Finance, Performance and Change explained that she could not say if any of the 22 were, although she noted that Merthyr Tydfil County Borough had a very public letter about their financial position prior to Covid-19 and there were a number of councils that were struggling with underlying deficit position that were greater than this Council.  The 35 she had referred to, was a Local Government Association (LGA) research piece. The same piece of work had not been done in Wales, although through the Welsh Local Government Association (WLGA) and the Section 151 Officer Group, a piece of work was being collated on pressures and that position, so there would probably be some further information. From her own contacts, some were facing quite difficult decisions although none of the 22 local authorities had issued a 114-section notice in Wales.

A Member enquired whether the WLGA research would be shared with Members.

The Interim Chief Officer Finance, Performance and Change explained that the WLGA survey that was being done, was more for the WLGA to have a position to lobby the WG in terms of the pressures, as a coordinated response. What the Local Authority would receive was a piece of work from Audit Wales on financial sustainability, that was due, late summer, and that would expected to be delivered to the Audit Committee, who took a very keen interest in this area as well.

A Member asked in respect of 4.1.11 the £882k disallowed, if examples of what that included could be provided.  She reiterate that she had raised the issue of Home to School Transport since she had been elected and highlighted the need for a one council approach. The Council was still paying for Home to School Transport, for children that wouldn’t be needed if safe routes were provided and asked why this wasn’t being done, particularly with an overspend, and should be looked at as a priority. The Member also questioned that the Council was no longer accepting children on buses who would pay, because the Council had deemed them to have a safe walking route.

The Interim Chief Officer Finance, Performance and Change confirmed that the majority of disallowed expenditure was for ICT. WG deemed ICT to have a longer shelf life than just the immediate pressure, which was entirely reasonable, so the Council had received 50% of that expenditure back. There were some small amounts disallowed, which had been claimed on administration and things like that. In addition, the Council had chosen to extend the parking offer, which was deemed a local decision, so the loss of income on that was disallowed. There was quite an element of consistency; there was a panel that scrutinised both the costs and the loss of income and the Interim Chief Officer Finance, Performance and Change felt comfortable that the disallowed amounts were consistent with others.

The Corporate Director - Education and Family Support explained that hecouldn’t comment on individual cases but what he could say was that there were some safe routes to school identified and they would make use of those where possible. He agreed that the Council did need to make sure that these were looked at and explored across the whole County Borough. One of the challenges of paying cases was as a result of Covid-19, with the need to manage places on school buses very carefully. He suggested that if there were individual cases, these could be sent through to the team to look at.

The Member confirmed that she had put in a Member referral with regard to the one case. She highlighted the issue at Coity and gave an example of children that got a on a bus in Coity, that could see the school from their houses, but there was no safe route because of the lack of footpath.  The council had been paying for the bus since the school opened in 2015 and yet if a small section of footpath was put in place, there wouldn’t be the need to pay for the bus.

The Chair asked as part of ongoing communication with what the Officers were doing on the Home to School policy, whether the Corporate Director could make sure that this could be considered further.

The Corporate Director - Education and Family Support confirmed he was happy to consider.

RESOLVED:          That the Committee noted the update on the Council’s revenue financial performance for the year ended 31^st March 2021.