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 updated Members on the Council’s revenue financial position for quarter one as at 30 June 2021 whilst noting time had moved on since this had been reported to Cabinet in July and she would pick up some of the key themes.

 

She reminded Members that Council at its meeting on 24 February 2021 approved a net revenue budget of £298.956m for 2021-22 and this was the first progress report against that budget.  Table 1 provided a summary of the information and set out the projected position which was showing a projected £1m overspend although she reminded Members that the Outturn report gave a very different picture at the time mainly because there was significant amounts of Covid money and additional grant monies and noted that Members would see financial pressures coming through on many of the budgets. This was clear moving into the 2^nd Quarter with particular pressures in Adult Social Care across the whole of Wales. She wanted Members to understand that those pressures were still there, and it was important that Members looked at the significant underlying pressures in some of the services and don’t just take from the outturn report there appears to be a very good financial position.

 

She took Members through Table 1, noting that a £1m Covid recovery fund had been established which has been used carefully on phased car parking offer, phased rental income increases for BCBC rental properties, waiver of sports fees, summer play etc. none of which were claimable against the hardship fund as local decisions weren't claimable.

 

Table 2 gave a flavour of Covid claims, noting that there was still a pressure on council tax and the council tax reduction scheme and financial hardship is expected as furlough unfolds. A 1% council tax drop was £1m and there was no support indicated yet from Welsh Government (WG). It was noted at 4.1.13  that pay and prices remained volatile and it was not clear on all the pay awards although there was  some indication that some of the teachers pay would be funded centrally.  Inflation continued to run at quite a high level and it was something that hadn’t been planned for so there was a need to ensure there was enough money in the prices budget.

 

Table 3 set out the prior year savings which had mainly been achieved although there was a shortfall still of £310k which was unlikely to be met and this needed to be considered. 

 

Table 4 and Appendix 2 showed the year's performance which had been a remarkable achievement in many respects in difficult circumstances with all the savings likely to be achieved apart from the relocation of the recycling centre which was delayed.

 

There was a continued need for savings over the life of the MTFS for 2022-2023 to 2025-2026 and it was noted from the projections that another £22m was likely to be needed depending on the level of settlement WG. 

 

Paragraph 4.3 of the report onwards provided a lot more detail on each of the Directorates.

 

The Chair thanked the Interim Chief Officer Finance, Performance and Change for her presentation following which Members of the Committee asked the following:

 

A Member noted the Covid recovery fund and asked if this recovery of monies, e.g., the £35k put into car parking fees, had that been successful.

 

The Head of Operations - Community Services explained that in order to encourage footfall, as part of the bounce back recovery from Covid, the offer had been made with both the three hours free in the Rhiw car park in Bridgend and the free from 12 to 3 o'clock in John Street in Porthcawl. What was incredibly difficult to do was actually baseline the footfall against a norm noting that during the pandemic initially footfall was decimated and although it was returning, still wasn't back to normal levels so it was very difficult to measure.

 

The Member asked for a little more detail on the split in relation to the £1m Covid recovery fund.

 

The Chief Executive confirmed that his understanding was it was about £100k - £120k in relation to sports fees and about £18k to £20k in respect of the car parking offer, although a full breakdown could be provided to the committee if they wished.

 

The Leader clarified that in respect of the summer play activity, the Council had planned more investment to provide a comprehensive range of summer play activities for children and young people but then WG had quadrupled the amount of funding they normally awarded. This was an example of how the budget was uncertain, noting that the Council continued to make the case to the WG for funds for those additional pressures.

 

The Interim Chief Officer Finance, Performance and Change suggested that that a breakdown of the Covid recovery fund could be circulated to members.

 

The Member enquired what was actually being asked for in respect of claiming for the loss of income. She noted that many of the £2.127m was on hold or pending and asked if this was actually putting a financial pressure on the council with staff trying to collate the information that WG were asking for.

 

The Interim Chief Officer Finance, Performance and Change acknowledged that the Covid claims had been incredibly pressurised and involved a huge amount of extra work not just for Finance but for the Directorates as  well, although the Council had a very good relationship with WG Officials in terms of being clear what could be claimed and as a result had been incredibly successful in getting costs claimed back.  Effectively it was like running almost two financial systems e.g. Covid costs, Covid loss of income and loss of council tax and the rest in separate areas.

 

The £2m that was on hold was really a time delay, as the Council had now received some, although she didn’t have the exact figure to hand but was hopeful that most of that would be received.  The main areas of loss of income had been Halo and leisure and the car parking already mentioned. There had been an ability to claim car parking last year, but this was no longer available.

 

A Member noted that the report on page 19 talked about the net budget for social services and an under spend of over £600k however page 20 then talked about staffing vacancies and delays implementing a restructure and asked for further clarification in relation to the narrative.

 

The Corporate Director - Social Services and Wellbeing acknowledged that the situation in domiciliary care and care and support at home was a difficult one to explain and understand. There were significant levels of vacancies in the in-house service with a restructure being consulted on at the moment. There was a big push, in terms of recruitment into those vacancies in-house, and some actions in terms of being more flexible around the contracts offered in-house. There were also some systemic issues, that needed to be addressed. At the same time a significant increase in need for care and support at home, had been seen, with independent sector providers providing more care and support at home than ever before. This was still not enough to meet the need and demand for domiciliary care services despite the significant amounts of money that were being invested into care and support at home.

 

The Cabinet Member for Social Services and Early Help confirmed that she spent her weeks looking at the figures and the balance was completely off within social care and until the workforce issue could be sorted out through recruitment, it was very difficult to reinstate that balance.  There was a need to respond to demands and needs and pay in order to make sure that residents were looked after so reinforcing and prioritising the workforce had to happen.

 

The Member understood the pressures in home care but asked if this was a significant pressure on recruitment elsewhere in the Council, thinking of a council-wide approach market supplements would be offered and asked if the Council was in a position to offer market supplements to home care staff.

 

The Corporate Director - Social Services acknowledged that the Council didn’t currently have a market supplement policy although she understood that one was well into development and that would be brought forward later in the year for consideration by members. She noted that the next meeting of SOSC2 on 23 September would consider, in some detail, the action plans around care and support at home. This was a challenge, not just across Bridgend but the whole of Wales. As Director this was the highest priority, alongside some of the workforce issues in children's services.  What was seen in the budget, and this was a budget report, was that the budget spend didn't align with where the spend should.  The budget position reflected some of the challenges in the overall service position and one of the indicators of success moving forward, would be if the budget spend aligned better.

 

A Member asked once the staff need had been recruited to, would there be an overspend?

 

The Corporate Director - Social Services highlighted that the Council had set the budget to meet and to pay for the workforce that had been evaluated was needed, although she would seek to, within the relevant permissions, over recruit in this area. To be in a position where the budget was balanced probably meant a successful recruitment drive although potentially a little bit of overspend would be seen. What would then look to be done, in terms of service and financial terms, was reduce that spend on care homes for older people particularly, as it had been seen that the number of people who had their needs met through a care home placement, reduce over the years. One of the risks that Care Inspectorate Wales (CIW) highlighted, in their annual report, was that due to the challenges in domiciliary care they may see people going into care homes sooner rather than later, but this had not been seen and so the Service would look to rebalance that budget into more care and support at home, which was what the majority of people wanted.

 

The Cabinet Member for Social Services and Early Help emphasised the point made that an overspend in those services would mean a saving in the higher care intervention in terms of packages of care and would like to see a lot more investment in the early intervention services. There was a need to ensure the correct budgeting for prevention as when money was invested in prevention costs could be offset further along the line. 

 

A Member referred to 4.2.2 in relation to the Halo contract and asked how the Council was going to continue to maintain subsidising them.

 

The Corporate Director - Social Services explained, in terms of the partnerships with Halo and the cultural trust partner, that the Council had worked very closely with them throughout the pandemic to manage what had been a very challenging situation for leisure and cultural trust providers. The Service had worked closely with the Finance team and WG in order to maximise the claims in terms of covered hardship and closely with Halo around their restart and recovery plans, as restrictions were lifted, to look at how they had been able to maintain membership bases and their plans for increasing those membership bases going forward. In governance terms, there was the advisory board, which was well attended by Cabinet members, in order to shape and inform the future direction of services. What the Council would be looking for Halo to do, would be both a return to pre-Covid levels of activity and performance and to build on some of the learning through the pandemic, including where they could be innovative and creative, and continue to make digital offers alongside physical offers and to widen the access into leisure and leisure services across the county borough, as this was key to the health and well-being of the population. Finally, to look then what the impact of that was on the contract and in respect of the subsidies and the investment that they got from the Council

 

The Member felt it was going to be exceptionally problematic and something that needed to keep a big eye on. She was also concerned that Halo had reduced their ICT provision, prior to the pandemic. She appreciated more was being done online but her concern was vulnerable people being able to access their claims and felt problems were being stored up for the future.

 

A Member noted that the Interim Chief Officer Finance, Performance and Change had briefed Members that the Council was £1m overspent on the 1st Quarter, there was an above average demand going into the 2nd Quarter, which would be a significant budget pressure. Budget Management was being described as volatile and unpredictable, which was entirely understandable and WG continued to provide some grant funding, especially to support adult services. With that in mind, what was hoped to be achieved going into the second quarter, having learned what the first quarter is telling us.

 

The Interim Chief Officer Finance, Performance and Change was not anticipating a huge change in terms of quarter two, with volatility remaining. The settlement from WG was likely to be late again, which was a major factor in the MTFS, and furlough was likely to unfold in September, which would give a feel for the pressure on council tax reduction. If that became excessive there might be some thought in WG about whether there was any support. There also might be a firmer indication on the way inflation was going and the way pay awards were likely to go. It was difficult to predict what might happen in quarters three and four if the country was returned to lockdown as that would have a huge financial impact on the budget again.  Some savings were needed by the end of quarter two, so in October, she would hope to be able to highlight some areas where reductions could be made, as there were pressures in many of the services including education, communities and particularly in housing, with rising levels of homelessness. There also needed to be decisions on where money could be taken from the budgets, which was increasingly difficult, as nobody wanted to reduce services. If savings weren’t made and there were increasing new pressures, then there could be real difficulty because of the lack of ability to find monies from elsewhere. Reserves were healthy and the general reserve was at expected levels, nothing excessive. There was quite a significant amount of money in earmarked reserves, but the key was earmarked.

 

In essence the Interim Chief Officer Finance, Performance and Change didn’t think the Council could just hope that WG would come forward with a good settlement. There was a need to plan savings and if the worst was planned for some savings proposals could be moved forward a year if necessary, as there were no doubts that future settlements would be tough.

 

The Member acknowledged that the key here was WG support and asked what sort of discussions were ongoing in relation to the Council’s situation because he felt sure the situation was replicated elsewhere across Wales.

 

The Interim Chief Officer Finance, Performance and Change acknowledged that some councils were in a slightly worse position, some in a slightly better position but there was a huge consistency about the things that they were finding difficult to fund and their pressures had been very similar in terms of the claims on the hardship fund and the loss of income. The S151 Officers met fortnightly, now monthly with WG and the WLGA, so there was a huge amount of interaction, although that didn’t mean that those officials had any insight into what the WG budget could look like ultimately. There were significant pressures from health across Wales and from other areas e.g., economic regeneration, etc., so local government was just one voice at that table, although hopefully a strong voice.

 

The Leader confirmed that representations at a political level, mirrored those that had been made by S151 officers, across Wales and currently, due to the acute pressures on health and social care, because of the way they are so closely related, he, along with the WLGA leader were meeting with the health minister on a weekly basis to talk about the unprecedented pressures on social care and making the case for that long-term investment in the system. The Minister was listening to that, and certainly recognised the crucial role that social care played itself and also in terms of sustaining the NHS as well and he would continue to raise the need for investment in in local services.

 

A Member asked what kind of discussions were being on reduced council tax income and asked if this could be raised as a priority.

 

The Leader confirmed that had been raised and the Council had received some additional support from WG, but there was still a recognition that that pressure had not gone away. WG were committed to reviewing the way that local finances were raised although this was a long-term aspiration of WG, in terms of council tax reform.

 

The Member asked if there was now any indication of what the Council was going to receive in terms of this assistance.

 

The Interim Chief Officer Finance, Performance and Change confirmed no, was the honest answer with council tax collections still currently running at about 1% down. The collection rate was set at half a percent down on normal so she was hopeful that things may have improved by the second quarter. The Council had also been able to process some of the summons that were suspended because during the Covid year, although as time went on the ability to collect debt became less. There was still hope the last year’s collection would increase through that mechanism, as well as some upturn in this years and September and October would be critical.

 

A Member referred to COM19 and asked if there was further information as the narrative seemed vague and he was trying to figure out how the figure had gone from amber to red.

 

The Head of Operations - Community Services reassured Members that the department was staying on budget. In terms of the permitting scheme for roadworks this was outstanding, as other areas within the highways department had been concentrated on to make sure the budget stayed on track. Essentially this would be a scheme that gave better control over external roadworks when statutory undertakers e.g., gas companies, etc., came along to do works on the highways. It was hoped this would generate some money, but the main purpose was to give the Council better control and to actually limit the amount of time that statutory undertakers spent undertaking works on the roadway. Although this was already in existence in England it didn’t exist in Wales yet and it required a change in WG legislation to actually allow it to happen.  Whilst this would continue to be pursued it would take some time to deliver, although it felt like the Council was getting there.

 

A Member referred to page 30, in relation to the pay award, as the employers offer was 1.75% and asked for an update on the position and how the Council would mitigate the award.

 

The Interim Chief Officer Finance, Performance and Change stated that she did not think that anything had been absolutely signed sealed and delivered on teacher’s and other pay, but the Council had budgeted between 1.75% and 2% in the MTFS, so if it was below 2% this would be within budget. There was some indication that WG would make a contribution to the teachers’ pay award, which would be extremely welcome, and the suggestion currently was that the Council would fund the 1% and WG would contribute the 0.75%, but that had not yet been formally confirmed and that was only for a part year because the teachers’ pay crossed the financial year. She was fairly comfortable however, that the Council had budgeted for the pay awards aspect.

 

A Member referred to COM1 and explained that whilst it stated that the £300k was likely to be achieved in 2021-22, she was aware of asset transfers that hadn’t progressed, so wondered how this target would be achieved.

The Head of Operations - Community Services stated that firstly the £300k was the MTFS savings target and not the exact amount saved through CAT transfers. He provided Members with a brief overview of some of the CAT transfer successes, which were on an ongoing basis, whilst some were on the cusp, and would provide Members with a full breakdown of those which had transferred and those that it was hoped would be achieved, for members to view. He confirmed that an extra person had been recruited in the property department, to help with the lease process and a person had just been appointed to assist with the CAT process in addition to the CAT Officer. There was more to do to make sure the Service continued to achieve the £300k on a recurring basis and there was a need to ensure CAT transfer process was kept going. Savings didn't end at the end of the year, and future savings would need to be identified and depending on how many successful CAT transfers, these could then be tallied up to see if there were further savings that that could be offered, if the number exceeded the £300k.

 

Having considered the above report, the Committee requested the following:

 

1. A breakdown of the Covid recovery fund to be circulated to members.

 

2. A full list and breakdown of CAT transfers including those that it was hoped would be achieved be circulated to Members.

 

RESOLVED:          That the Committee noted the projected revenue position for 2021-22.