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Agenda item

Revenue Budget Outturn 2020-21

Minutes:

The Interim Chief Officer – Finance, Performance and Change presented a report, the purpose of which, was to provide Council with an update on the Council’s revenue financial performance for the year ended 31st March 2021.

 

By way of background, the report reminded Members that on 26th February 2020, Council approved a net revenue budget of £286.885 million for 2020-21. As part of the Performance Management Framework, budget projections are reviewed regularly and reported to Cabinet on a quarterly basis. The delivery of agreed budget reductions is also kept under review and reported to Cabinet as part of this process.

 

She explained that the 2020-21 financial year had been a unique and complex year in managing the financial position of the Council primarily as a result of the Covid-19 pandemic. Significant changes have occurred throughout the year as circumstances altered and services were supported in different ways to deliver outcomes in the best way possible. A Covid-19 Hardship fund was set up at an early stage by the Welsh Government to the tune of £188.5 million which the Council was able to draw on for financial support.

 

The Council had been extremely successful at securing support for many of the additional costs incurred along with loss of income claims. Our claims against the WG Hardship fund totalled £21.5 million of which only £882,000 were disallowed.

 

Additional to the assistance and support from the WG Hardship fund were specific grants received to help cushion the effects of COVID on the delivery of services. These included ICT for digitally excluded learners, concessionary fare reimbursement and local authority cyber security along with specific support for schools in for school counselling services, face masks and support for additional cleaning costs. Furthermore, significant grants were received in the last quarter of the financial year.

 

The Interim Chief Officer – Finance, Performance and Change, confirmed that the other significant change between quarter 3 and quarter 4 was the £1.261 million contribution from WG in February 2021, in recognition of the reduced council tax collection rates experienced by Councils in 2020-21 as a consequence of the Covid-19 pandemic. The key areas of investment were outlined in the report and shown in more detail at Appendix 1.

 

The Council’s net revenue budget and final outturn for 2020-21 was shown at Table 1 in the report.

 

The overall outturn at 31st March 2021, was a net under spend of £432,000 which has been transferred to the Council Fund, bringing the total Fund balance to £9.771 million in line with Principle 9 of the Medium Term Financial Strategy (MTFS).

 

Table 1 highlighted the changes referred to of £6.6 million since quarter 3 on total Directorate Budgets, and a change of £4.549 million on total Council Wide budgets. Table 2 in the report, highlighted the main reasons for the change and additional funding received by the Council since quarter 3 that support the changed outturn position.

 

Since quarter 3, the Interim Chief Officer – Finance, Performance and Change confirmed that the authority had successfully claimed £2.144 million of Hardship funding, along with £1.066 million to support loss of income experienced by the authority as a result of the Covid-19 pandemic. Further detail was provided on the movements since quarter 3 at individual

Directorate level and on Council wide budgets in paragraph 4.3 of the report.

 

The main financial pressures are in the service areas of Home to School Transport and Adult Social Care. These two alone had an underlying pressure of £1.864 million. It should be noted she added, that these budget areas can be volatile and small changes in demand can result in relatively high costs being incurred.

 

The net budget for the financial year was set assuming full implementation of the current year budget reduction requirements across the Council’s budget, which amount to £2.413 million. Where proposals to meet this requirement have been delayed or are not achievable directorates have been tasked with identifying alternative proposals to meet their requirements such as vacancy management, or bringing forward alternative budget reduction proposals. These were set out in paragraph 4.2.4 of the report.

 

The next part of the report highlighted the effect that the Covid-19 pandemic had on the Council and the Authority’s response to this. The information in Table 3 and Table 4, gave further details on this.

 

Table 5 in the report, then detailed Outstanding Prior Year Budget Reductions and in paragraph 4.2.2 of the report, it itemised in monetary terms, those proposals still not achieved.

 

Table 6 then included information relating to the monitoring of Budget Reductions for 2020-21. The most significant budget reduction proposals not achieved in full and the action required to achieve them in 2021-22, were outlined in Table 7 of the report.

 

A summary of the financial position for each main service area was attached at Appendix 4 to the report and comments on the most significant variances were provided at paragraph 4.3 (Directorate by Directorate).

 

The Interim Chief Officer – Finance, Performance and Change concluded the report, by detailing information on Council Wide Budgets and Earmarked Reserves.

 

The Deputy Leader thanked the Interim Chief Officer – Finance, Performance and Change for looking after the Authority’s finances during such a difficult time over this last 14 month or so period and prior to that. He commended the Welsh Government Hardship Fund, as without the £21.5m funding the Council had received through this, it would be in a very difficult position. He also added that the Council Tax Reduction Scheme, would continue to help constituents who were single occupants in properties, as well as those on low income. He would ensure that financial pressures that existed in Directorates would continue to be targeted as future budget reductions.

 

A Member asked that if the Authority knew it was going to be in such a favourable financial position, due to the funding provided by Welsh Government under the above Fund, which including assisting the Council on cost recovery, would the Administration have still increased Council Tax this year by 3.9%. He also asked for an explanation as to why there were specific pressures in the areas of Home to School Transport and Adult Social Care

 

The Deputy Leader stated that this was a question that was retrospective in its nature and that with the benefit of hindsight the above may have been approached differently. However, this was not the case at the time the MTFS was approved by Council earlier this year, at a time when the local authority found itself in a very difficult financial position.

 

The Cabinet Member – Social Services and Early Help, advised that she was fearful of the existing pressures Social Services presently faced, which she unfortunately anticipated, would continue in the future. These related to Covid-19 and pressures around Long-Covid, as well as individuals continuing to require both support through Adult and Children’s Social Services. The Council and its partners were obligated to look after the most vulnerable in society, she added.

 

The Cabinet Member – Education and Regeneration, confirmed that Home to School Transport continued to be a budget pressure, due to austerity more than any other reason. The proposal to cut the budget of Home to School Transport was still in the MTFS as a targeted reduction. It should be noted he reminded Members, that the Council still continued to provide this service at a more generous rate than that recommended by Welsh Government.

 

The Corporate Director – Social Services and Wellbeing advised that there were three underlying reasons why there continued to be an overspend in Adult Social Care. Firstly because of demographics with an ageing population whereby people were living longer. Secondly, as a result of the outcome of the pandemic and the effect it’s had on services pressure wise and lastly the cost of care, namely for the workforce and commissioned services, which would be longer term pressures.

 

RESOLVED:                            That Council noted the Revenue Outturn position for 2020-21.

 

Supporting documents:

 

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