Agenda item

Revenue Budget Outturn 2021-22



Councillor Huw David - Leader of Council

Councillor Jane Gebbie - Deputy Leader of Council and Cabinet Member for Social Services and Early Help

Councillor Hywel Williams - Cabinet Member for Resources 

Councillor Jon-Paul Blundell - Cabinet Member for Education

Councillor John Spanswick - Cabinet Member for Communities

Councillor Neelo Farr - Cabinet Member for Regeneration

Councillor Rhys Goode - Cabinet Member for Wellbeing and Future Generations


Mark Shephard - Chief Executive

Carys Lord - Chief Officer - Finance, Performance and Change

Lindsay Harvey - Corporate Director - Education and Family Support

Claire Marchant - Corporate Director - Social Services and Wellbeing

Janine Nightingale - Corporate Director - Communities

Kelly Watson - Chief Officer Legal and Regulatory Services, HR & Corporate Policy





The Chief Officer – Finance, Performance and Change presented the report the purpose of which was to provide the Committee with an update on the Council’s revenue financial performance for the year ended 31st March 2022.


The Chairperson thanked the Chief Officer – Finance, Performance and Change and her teams for the comprehensive report and invited Members’ questions or contributions.


Members noted the impact Covid-19 had had on the budget, both positively and negatively and queried how easy it had been to work with Welsh Government regarding additional funding and how effective it had been.


The Chief Officer – Finance, Performance and Change confirmed that the last financial year had been the second of the hardship fund and therefore, the systems and processes in place to claim the money were already well established by the time of the claims last year. For 2021-22, the increased expenditure was claimed monthly and lost income was claimed on a quarterly basis to help with cash flow issues. The payment process had also been quicker during 2021-22 than in the previous year as Councils adapted to the system.


She advised that claims were scrutinised by Welsh Government but if any queries arose, they were sent back for clarification and monies released as soon as possible following the clarification. Additionally, if one element of a claim was being scrutinised, the other elements of the claim were paid in the meantime and did not, therefore, hold up the entire claim. The process had improved as familiarity with the systems improved.


Members asked for background regarding the amount of capital reserves held and confirmation as to why such large reserves were held.


The Chief Officer – Finance, Performance and Change confirmed that the reserves went up at the end of last year as a significant amount of money came through at year end which was unable to be spent effectively and efficiently so it had been carried forward. She confirmed that was one thing that reserves could be reused for.


In addition, a large sum had been moved into capital reserves to supplement the money from Welsh Government. She highlighted, particularly in the capital program, rising costs as material costs went up and supply chains were struggling, which had impacted on costs. In addition, the costs associated with the 2030 decarbonisation agenda and the Band B schools modernisation program were seeing increased costs so it was prudent to put some money aside to ensure that the commitment to that programme could be honoured. She reported that some spend on schemes involving highways and playgrounds were approved at the last meeting of Council and confirmed that some of the reserves were to help fund some big infrastructure projects whether funded alone or with some match funding from Welsh Government.


In relation to insurance costs, Members noted that the net budget set at £1.3 million had risen to an actual outturn of £2.84m and queried the nature and cause of the costs, whether there had been many small claims or several large claims and whether they were internal or external.


The Chief Officer – Finance, Performance and Change explained that in previous years and the first year of the pandemic, there had been a reduction but with a significant increase last year. Two years of claims might have been administered in the one year which built demand in the system. She confirmed that the position would be analysed and monitored carefully to understand whether it was going to be a long-term position requiring mitigation or whether the demand in the system had eased.


Members requested that following the analysis, information be provided to the Committee on the nature of the claims.


Members noted that a previous Corporate Overview and Scrutiny Committee had been told that there would be a fund of £1,000,000 to cover the payments that were not expected to be covered through Welsh Government funding as a result of the pandemic. With Covid-19 on the rise again, the Committee queried whether there would be any other monies held within the Chief Executive Directorate to provide support to other directorates if needed.


The Chief Officer – Finance, Performance and Change confirmed that within this year’s budget there was a base budget allocation of £1,000,000 as it became known that the hardship fund was going to end in the current financial year. There only commitment against it was in relation to personal protection equipment. She confirmed that there were some other short-term commitments against the reserve and that the Corporate Director – Education and Family Support was doing a lot of work in schools to ensure monitoring and support. However, demand on the base budget was low.


Members queried the nature of the overspend and significant increase in childcare legal costs and whether it needed to be considered for future allocation.


The Chief Officer – Finance, Performance and Change confirmed that the pressure was due to an increase in complex childcare cases where a lot of work had to be outsourced to Counsel. She confirmed that it was being monitored closely.


The Deputy Leader and Cabinet Member for Social Services & Early Help highlighted the authority’s responsibilities as Corporate Parents and that the increase was due to the number of children in court proceedings which required expert input.  She advised that she expected the cost to increase due to the considerable increase in the complex needs of young people. However, she wanted to reassure Members that the Council would do its utmost to support those young people.


Members queried, with reference to paragraph 4.3.1 of the report relating to the retendering exercise, whether a further large rise in taxi and minibus contracts was anticipated.


The Corporate Director for Education and Family Support confirmed that inflationary pressures were going to be difficult to manage. In conjunction with the Association for Directors of Education in Wales, they were working closely with transport providers around the pressures with the rise in fuel costs to maintain the statutory requirement to provide home to school transport for eligible learner. However, a significant uplift was anticipated and the new contract was likely to attract further uplift which was going to be challenging.


Members asked with regard to the anticipated introduction of the Welsh Government review on learner travel, what the authority’s preparedness was for receiving the report, considering its contents and how the authority was going to respond.


The Corporate Director for Education and Family Support advised the Leader had written to the Cabinet Member for Education and Welsh Language to ask for an update. He advised that over the last five years, Bridgend’s home to school transport policy had become more closely aligned with Welsh Government expectations. He highlighted the good relationship developed over the last two years with Welsh Government and hoped that if there were going to be significant changes following the report, that Welsh Government would share the proposals with Directors at an early stage and prior to publication.


Members asked whether the section 106 monies were included in the reserve figures for education or whether it was being held elsewhere acknowledging it was a considerable amount of money.


The Deputy Head of Finance clarified that they were revenue reserves that had been established and that section 106 funding was separate. They were included in the accounts and in the statement of accounts but not held in the earmarked reserves.


Members queried how they would know how much monies were being held from section 106 funding for each Directorate.


The Deputy Head of Finance confirmed that the monies were not received per Directorate as they might be for a particular area to provide a wide range of service such a, a playground, play areas, school, etc. She confirmed that there would be more detail contained in the statement of accounts and that the draft accounts would be presented to the Governance and Audit Committee in July but in the meantime, she could bring some details together.


The Leader confirmed that concerns around inflation of costs in home to school transport and other areas of inflationary pressures were being raised with the Welsh Local Government Association (WLGA) and could be reflected in the budget setting for Welsh Government.


In relation to the section 106 funding, the Cabinet Member for Communities advised that the Development Control Committee used to receive regular reports with the list of all 106 agreements. He acknowledged it was important for all Members to see and be aware of what agreements were within their wards, the amount and the time scales for implementing them.


Members noted the huge inflation in oil, diesel and petrol and asked what conversations were being held at WLGA level and with trade unions regarding the 45p per mile and supporting staff.


The Deputy Leader and Cabinet Member for Social Services and Early Help advised that she was the WLGA spokesperson for the workforce and that fuel costs and the cost of living were on the agenda for the next meeting of the Joint Council for Wales and reassured Members that those discussions were taking place.


In addition, she highlighted that Bridgend already paid staff at the rate of 47p per mile above the HMRC rate of 45p per mile. The Council needed to be clear on how it was going to sustain the position and noted that HMRC and the Westminster Government also needed to act on the issue.


In relation to junction traffic assessments, Members queried whether there would be ample assessments but not the ability to implement their findings due to lack of finances, whether revenue or capital.


The Corporate Director for Communities confirmed that there was an allocation this year of £3.5 million in the highway programme to address a number of issues, including road resurfacing, junction improvements and streetlighting. She advised that Cabinet had an ambition that it would be part of a rolling capital programme and therefore, any assessments would not be done in vain; the projects would be picked up but on a prioritised basis.


In relation to Appendix 3, Revenue Budget Monitoring – Year End Outturn, Members noted that there were going to be significant inflationary pressures that would impact on the services provided and asked whether any further support was expected from central government.


Additionally, Members noted the series of manifesto commitments which had been made by the executive and that delivery of those might be significantly affected by inflationary pressures. Members asked whether there was confidence that the Cabinet would deliver the manifesto commitments on time and on budget; particularly, whether they could deliver on their commitment to provide free school meals to all primary school children by September 2023.


The Chief Officer – Finance, Performance and Change confirmed that the revenue support uplift had been a one-off and was completely unprecedented. She acknowledged the inflationary pressures faced and reiterated the discussions taking place with the WLGA and the Welsh Government on the likely impact of them and trying to quantify it across Wales. It was uncertain whether any further monies would be forthcoming, but data was being collated to try and influence the settlement position for next year.


The Leader recognised that the roll-out of free school meals was a key manifesto for the executive and the Welsh Government and confirmed that the Welsh Government had been clear that they would provide the funding to deliver it and for the introduction of the 20mph limit on roads. He acknowledged the difficulties faced due to the rise in inflation and the cost-of-living crisis which made it difficult to make predictions regarding funding but confirmed that the UK Government was also being lobbied for funding.


The Cabinet Member for Education highlighted the importance of the manifesto commitment as no child should be hungry when attending school. He confirmed that the initiative would start in September with a phased approach with all infant school children expected to have free school meals by 2023. He acknowledged the exorbitant rate of inflation had meant that there were mild delays for junior school children but free school meals for all primary school aged children was expected by 2024 in line with the Welsh Government target.


He continued that there were about five schools in the borough that required extra equipment and space to be able to provide the free school meals and the rising costs and delays in planning meant that there would be a delay to 2024 but highlighted that it was within the term of this Council.


The Cabinet Member for Communities acknowledged the delays in the delivery of the manifesto commitment to increase investment in highways due to planning and resources but confirmed that it and the long-awaited investment in play areas would soon be visible. 


The Cabinet Member for Resources confirmed that there were 121 manifesto commitments at various stages of fruition. In relation to free school meals, he advised that that there was a £2 million project to get the kitchens ready to roll out the initiative. He was certain it could commence in September 2023 and hoped that that Welsh Government would help to bring the ambition forward. He continued that it was a fantastic initiative that would be delivered as quickly as possible.


RESOLVED: The Committee noted the report and requested the following:


-       Information be provided on the nature and source of insurance claims in 2021-22.

-       Information be provided demonstrating the Revenue Reserves held by Directorate. 


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