The Interim Chief Officer Finance, Performance and Change reported on an update on the Council’s revenue financial position as at 30 September 2021.  She informed Cabinet that Council at its meeting on 24 February 2021 approved a net revenue budget of £298.956m for 2021-22 and she summarised the net revenue budget and projected outturn for 2021-22, which showed a net under spend of £2.084m, comprising £170k a net under spend on directorates and a net under spend of £5.9108m on council wide budgets, which was offset by a net appropriation to earmarked reserves of £4.004m.  She stated that the under spends masked an underlying position whereby the Welsh Government’s Covid-19 hardship fund, although extended until 31 March 2022 will be tapered with an expectation that services will return to pre-pandemic levels.  While financial pressures exist in Home to School Transport, Social Services and Wellbeing, Homelessness and Waste.   The Council had successfully claimed £15m in expenditure and over £5.5m in loss of income claims in 2020-21.  She stated that the Council will continue to claim from the Hardship fund against the eligible criteria and directorates will continue to capture costs incurred as a result of the ongoing impact of the Covid-19 pandemic.  Updates will be provided to Cabinet in the quarterly revenue budget monitoring reports. 

The Interim Chief Officer Finance, Performance and Change reported on the position on budget reductions proposals which totalled £1.760m in 2021-22, which currently showed a projected shortfall on the savings target of £65k.  She stated that the most significant budget reduction proposal unlikely to be achieved in full is the relocation of the Community Recycling Centre from Tythegston to Pyle resulting in the cessation of lease payments at the existing site (£60,000).  The new site in Pyle will be opening once related junction and road improvement works have been completed, both sites will be maintained until the new site is fully operational, the saving will not be achieved in full until 2022-23.  She stated that Directors will continue to work staff to deliver their proposals or alternatives and this is reflected in the forecast outturn for the year.  She also informed Cabinet of the high level of vacancies experienced which was affecting the delivery of budget reductions.

The Interim Chief Officer Finance, Performance and Change informed Cabinet of the review of earmarked reserves, whereby the Council is required to maintain adequate financial reserves to meet the needs of the organisation.  She stated that the net appropriation to earmarked reserves during quarter 2 is £4.004 million (£4.341 million additions offset by £0.337 million that have been unwound).  The additions relate mainly to   Capital Programme Contribution reserve which was established to avoid the Council needing to borrow, which would result in consequential borrowing costs on the revenue budget, and will be used to fund schemes within the capital programme, both current and future capital pressures.  She informed Cabinet of a recent Audit Wales report on the use of reserves by local authorities, wherein it was identified that the Council’s level of reserves was towards the higher end compared to other local authorities.  The Interim Chief Officer Finance, Performance and Change stated that the authority is in a good position in relation to its level of reserves, which was down to careful budgeting and a careful approach towards risks. 

The Deputy Leader in commending the report commented on the challenges in in making financial forecasts and that the authority is grateful for the funding it has received from the Hardship Fund.  He stated the authority will proceed with caution with its budget planning.

The Cabinet Member Wellbeing and Future Generations asked whether the staff vacancies are due to the under spend on the budget.  The Chief Executive stated that the high level of vacancies is of concern, particularly in some service areas where there are significant vacancies affecting service delivery, making those under spends undesirable.  He also stated that where difficulties to recruitment to vacancies continue, the Council would have to prioritise service delivery and deliver those services not as quickly as before.  He informed Cabinet that the Council has in place apprenticeships and graduate opportunities to grow its own. 

The Leader informed Cabinet that the first Joint meeting of the Welsh Government with the leaders of all local authorities in Wales had recently taken place, wherein discussions had focused on climate change and the need for a long term sustainable funding solution to be found for social care.

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