Agenda item

Budget Monitoring 2022-23 - Quarter 1 Revenue Forecast



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 for 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 position as at 30th June 2022.


A Member queried an underspend of £459,000 in the Communities Directorate as she was concerned that most constituent complaints arose in the that Directorate and that replies to Member Referrals commonly stated there was insufficient budget to undertake the works required. She also queried how there was a £95,000 shortfall on budget reductions in Communities when an underspend of £459,000 was envisaged.


The Cabinet Member for Communities advised that the underspend was projected not confirmed.


The Corporate Director for Communities clarified that for  2021-22 there were delayed budget savings of £160,000, including  a £100,000 saving for the  Permitting Scheme, which had been proposed to  charge utility companies that dig up roads, however Welsh Government had not endorsed the Scheme or responded to its proposal.


In relation to the Community Recycling Centre (CRC) in Pyle, the Director confirmed that a licence had not been received from Natural Resources Wales (NRC) and that it had been raised politically in view of the operational issues being caused.


She confirmed that with regard to the £150,000 in year budget reductions, £55,000 had been achieved but  £95,000 could not be met due to two areas. 


She advised that the first was the unsuccessful replacement of biodegradable food waste bags with plastic bags. She explained that food digested at a much faster rate than the biodegradable bags and that the company had therefore been taking the food out of the bag, putting it into the digester and throwing the bag away. She confirmed that the current bags cost £35,000 more than the single use bag but that a national debate about the micro particles that might be present have prevented the switching and the saving.


She advised that the second area where a saving of £60,000 had been unsuccessful was the commercial letting of a wing in Ravens Court, due to the continued occupation of the vaccination centre and Council occupied parts of the building itself. She advised that they were undertaking a future services model however until it was clear that the Council no longer required the accommodation, the wing could not be let.


The Corporate Director for Communities confirmed that the Quarter 1 projection was an underspend of £459,000. She referred the Member to page 17 of the Report pack which provided the breakdown of where potential under and overspends might occur in the Directorate to achieve the position of £459,000 underspend. She cautioned that the figure would change each Quarter.

She confirmed that that there were current underspends on waste, with a 3.9% reduction on the monies paid for the material recycling centre. However, as the tonnage of waste collected was increasing, she anticipated that the underspend could be cancelled out during the year.


She highlighted that there had also been savings in the streetlighting budget from the introduction of LED lights with a projected a possible underspend of £271,000. However, the cost of energy was increasing exponentially and there was going to be a cost price inflation which needed to be monitored.


There was a projected overspend in Corporate Landlord due to shortfalls in occupancy in Bridgend market, the Science Park and the Innovation Centre representing a £230,000 income loss.


However, those shortfalls in the Corporate Landlord Department could be offset against the underspend of £157,000 due to vacancies which had not been recruited to successfully.


She confirmed that in most years, the Communities Directorate usually broke even with a small margin either slightly overspent or slightly underspent. However, she did not envisage the projected underspend by the end of the year, given the difficult Medium Term Financial Strategy (MTFS), without some very significant grants and revenue support.


A Member asked, in relation to the relocation of the Household Recycling Centre from Tythegston to Pyle, what the alternative one-off efficiencies were that were being considered to deliver a balanced budget position. In addition, he noted the Welsh Government announcement that all those aged over 50 would be eligible for a booster vaccination and queried whether it was envisaged that an income would be generated from Ravens Court owing to that. Finally, he asked whether the projected shortfall of £273,000 or 42.5% of the overall reduction target was an adequate position and, given the anticipated financial uncertainties whether it was a sustainable position.


The Corporate Director for Communities confirmed that the main aim was to deliver the £60,000 saving and so was working with NRW and Kier. By way of background, she said it was disappointing that when the application was made to NRC for an operator’s licence for the CRC, designed to NRW’s specifications, it should have taken 12 weeks but due to resource issues it was not considered for 9 months. She confirmed that the £60,000 was not due to the CRC at Pyle but rather the lease payment at Tythegston and that the Tythegston site could not be relinquished until the move to Pyle was achieved.


She confirmed that NRW had rejected the application due to a permitted request being necessary to use the fire service hydrant on the road outside which she stated was easily resolved so they had appealed and resubmitted to NRW to ask them to condition the licence rather than to reject it. She hoped to achieve some saving in year when the licence was received, and the CRC at Pyle could be opened but they had extended the licence at Tythegston to September with the ability to extend to April if needed. 


With regard to the vaccination centre at Ravens Court, she confirmed that they had asked to continue occupation of those wings and there was a commercial rate rental income from that which would continue.


In relation to the projected shortfall of £273,000, the Corporate Director for Communities clarified that that sum was across the Council as a whole with the shortfall in the Communities Directorate being £95,000 based on the waste food bag and Ravens Court let she had outlined earlier. 


A Member highlighted the helpful explanation provided by the Corporate Director for Communities regarding the projected £459,000 underspend but queried whether the confusion was due to the terminology ‘projected outturn’ and whether it should be reflected as ‘run rate’.


The Corporate Director for Communities confirmed that in accountancy terms, there were projections but agreed that the situation was dynamic especially in Quarter 1 but that it was based on knowledge and the current situation.


The Chief Officer for Finance, Performance and Change advised that at the end of Quarter 1, several things required assumptions to be made based on the knowledge available at the time. This was revised regularly as more information became available and the situation within budgets became clearer.


The Member wanted the Committee to be clear on the distinction between run rate and projected outturn and the Chief Officer for Finance, Performance and Change confirmed that the use of certain terminology would be borne in mind in future reporting.


The Leader confirmed that it had only been confirmed in a meeting with Chief Executive of the Health Board that week that they wanted to continue the use of Ravens Court and highlighted it as a good use of forecasting in the report. In addition, he reiterated that the financial position would look different in future Quarters to Quarter 1 and, particularly with the pandemic and inflation, forecasting was difficult with the uncertainties and factors outside the Council’s control.


A Member queried, with reference to paragraph 4.1.6 of the report, whether any figures were available regarding how much of the £1 million carried into 2022-23 approved by Corporate Management Board (CCMB) to support free car parking had been used. In addition, she noted the significant budget pressured identified from vacancies and sought a statement regarding the percentage of vacancies and steps being taken to alleviate the pressure.


The Leader confirmed that the vacancy rate had increased significantly with Social Care being one of the areas with the highest vacancies. Within the last month, there were a series of recruitment fairs in Sarn, Pyle and Bridgend and an ongoing campaign promoting vacancies. Particularly in social care, market supplements had been considered and introduced where there was a business case, to try and tackle vacancies repeatedly advertised. He highlighted how that reflected the overall tightening of the labour market which was more competitive and saw employers having to compete for staff in way not seen for a long time.


The Deputy Leader highlighted that recruitment had been taking place for some time across the county borough and acknowledged the difficult position in social care. She impressed on Members the need for social workers, that some teams were working at over 50% vacancy rate and that there were more agency staff than would be preferred. She also highlighted the increasing need to review HMRC rates for travel currently at 45 pence per mile and that Bridgend pays a higher rate of 47 pence per mile. She stated that the position should be that people went to work to earn money to pay bills and contribute to society.


The Deputy Leader continued that all Directorates were losing staff to other organisations who pay more. The Welsh Local Government Association (WLGA) were doing work around the issue.


The Chief Officer – Legal & Regulatory Services, HR & Corporate Policy confirmed that work was being done on HR processes and vacancy rates but highlighted that the difficulty was Council wide with impacts felt throughout. She highlighted that the Council was looking at different ways and initiatives to look for and recruit staff. She advised that she could provide Members with information regarding current recruitment issues, vacancy rates and data regarding repeat advertisements for job vacancies.


In relation to the free car parking, the Corporate Director for Communities confirmed that the offer of 3 free hours at the Rhiw in Bridgend and John Street in Porthcawl had been extended and that the income lost was between £36,000 and £40,000 per month. This was seasonal and dependent on time of year, therefore, annually the sum was around £400,000. However, the income received from all car parks across the borough was in the region of £1.3 to 1.4million which was significant, particularly with the anticipated difficult MTFS. She concluded that the hardship fund enabled the offer of the free car parking covering the lost income in the region of £400,000.


A Member referenced paragraph 4.1.9 of the report; that the MTFS included a £500,000 budget pressure allocation with £60,000 for Multi-Agency Safeguarding Hub (MASH)/Information, Advice and Assistance (IAA) and safeguarding. She highlighted that safeguarding issues had risen significantly and that the team were overstretched and sought clarification on the allocation sufficiency.


The Corporate Director for Social Services and Wellbeing assured that the £60,000 allocation related to specific managerial resources and supervision resources within the service. The service previously had one team manager but now had two substantive team managers. She clarified that the pressure was in addition to a pressure which had already been approved as part of the MTFS and was approved as part of a bigger budget pressure for children's social care that had included four additional social workers.


She highlighted that MASH and IAA had been designed and set up around 5 years ago based on 200 contacts per month with the service but that they were now seeing 600. The service was being managed through earmarked reserves, to ensure sufficient capacity to sustainably meet demand and keep caseloads at a reasonable level for the workforce. Some external expert support had been engaged to work over the summer period on a business case and an indicative budget pressure had been put forward for next year; the detail around the size of that budget pressure would come through the business case work.


A Member suggested that all should use the page numbers on the public Agenda pack so that the public may also follow.


A Member asked whether the budget had been set on the current workforce with a number of vacancies, or what the full complement of staff should be.


The Chief Officer for Finance, Performance and Change confirmed that the budget would have been set on the Establishment, i.e., the number of posts within the authority. The report highlighted a budget underspend in certain areas as a result of vacancies because all posts were fully costed in the base budget.


A Member noted that one of the biggest pressures faced was in relation to inflation which he noted was headed towards 10% by the end of year. He queried what the expectation was that the Council would receive further in year requests from external contractors, particularly in the Communities Directorate, and what were the plans to mitigate it. He referenced a case where an external contractor had requested an increase in relation to highway resurfacing and queried whether the Council would be able to deliver what it expected to deliver if there were further requests in relation to inflationary increases.


The Chief Officer for Finance, Performance and Change confirmed that they were hearing from suppliers and providers in particular with regard to the inflation issue and primarily around fuel costs. However, she confirmed that this also impacted on the Capital Programme. She advised that the requests were being dealt with as well as possible and as they came in. Whilst needing to remain mindful of the pressures on suppliers, a balance would be needed between either a reduction in service to meet the additional costs or an additional budget pressure. She suggested that each case needed consideration individually to ensure maximisation of the contract whilst remaining mindful of money and efficiency.


The Leader confirmed that the area of concern was being raised with Welsh Government as it was a challenge faced by all local authorities across Wales and the UK. He stated that UK Government needed to reflect that in additional funding, within year, for Welsh Government that could be passported to local authorities. He acknowledged that Welsh Government were helping where possible and highlighted that they had increased the grant funding for the updated 21st Century School Modernisation Programme by £12 million. The increase was, in part, to reflect higher targets regarding the net zero carbon agenda but was also a reflection of much higher construction costs.


A Member asked, given the tight margins within Directorates to make some of the budget reduction proposals, what consideration had the Cabinet had given to rolling back some of the discretionary services provided by the Council to only offer statutory services, if no additional funding was forthcoming, in year, from the UK Government. Alternatively, would there be any scope within the MTFS budget reduction contingency reserve to absorb some of the pressure that would arise from inflationary pressures, Brexit pressures, Covid-19 legacy and other costs referred to continue with the delivery of the current service.


The Leader advised that all discretionary services were important to the community and relieved pressures on statutory services, saving money in long and short term. He said the biggest and most obvious example were the leisure services with Bridgend having the biggest GP referral scheme in Wales which enabled people to stay healthier and more independent for longer, saving on people’s care needs. Therefore, he did not want to make the mistake of cutting back on key discretionary services to deliver a short-term budget savings which would cost communities. He would be very resistant to the simplistic cutting of services that were not deemed statutory but acknowledged that the labelling of services at statutory was not straight-forward following the Well-being of Future Generations (Wales) Act and other legislation whereby services that would traditionally have been labelled as discretionary were arguably helping to deliver on key legislation.


The Chief Officer for Finance, Performance and Change confirmed that there was some money within the contingency fund that could be used to absorb some of the pressures. However, reserves could only be used as a one-off. Therefore, if the pressure was a one-off that would abate over time, reserves could be used if the pressure was to be built into the base budget as an ongoing cost, then decisions would need to be made with regards to level of service.


A Member noted that with inflation set to rise to over 10% by the end of the year that anything below a 10% pay increase for staff would effectively represent a pay cut. He sought an indication on the progression of discussions locally with trade union colleagues and with Welsh Government.


The Deputy Leader advised not going against NJC bargaining framework, the national negotiating position. She agreed that staff needed an appropriate pay rise but suggested that it needed to be fully funded by Westminster with a consequential budget required for synergy across public services in Wales. She stated that staff were the biggest resource and the most valuable thing and therefore needed to be valued appropriately.


The Leader reiterated support for a pay rise for staff which kept pace with inflation. However, as pay is negotiated at a national level, pay increases had to be fully funded by central government. He acknowledged that workers were experiencing the cost-of-living crisis and highlighted how an overall pay increase would with the difficulties being faced in relation to recruitment and retention.


A Member asked, with reference to paragraph 4.2.5 and 4.2.7 of the report, what alternative reduction proposals were being considered.


The Corporate Director for Education and Family Support confirmed adult community learning was a significantly appreciated part of service delivery. Recently, the Welsh Government terms and conditions on the use of grant money for admin and management purposes had changed and capped at 3% which necessitated a change. Therefore, a regional approach was required. He confirmed that they worked closely with Bridgend College, a key partner in Bridgend and also across the Central South Consortium area, working closely Rhondda Cynon Taf. One thing being considered what how other providers could provide the services for adults in Bridgend, maintaining the same high quality and maintaining the MTFS commitments.


A Member noted the projected overspend of £220,000 in relation to learner support at paragraph 4.3.1 of the report and sought clarity on the position that it was due to learners awaiting placements at Heronsbridge or Ysgol Bryn Castell (YBC). She queried whether this was as a result of capacity issues and whether these would be resolved when Heronsbridge was moved. 


The Corporate Director for Education and Family Support confirmed that some year groups in YBC were at capacity. In the last two years, he noted the significant changes to emotional, social and behavioural challenges presented by some learners in schools and stated that when bespoke or tailored provision was required for those learners, they did not have capacity in some areas in YBC. Therefore, a graduated response was required to support the needs of those learners and to provide additional staff with the skills and experience to support those needs. In the short term, he confirmed that they were working with YBC’s governing body and the Principal Education Psychologist to look at how to expand capacity at YBC and would be looking at an independent review in the new school year of capacity to ensure needs of all children across the local authority as safely and as well as possible.


He confirmed that one key area was for the new Heronsbridge school to expand provision which would alleviate some of the needs going forward. He reflected that Bridgend was lucky to have two excellent special schools and wanted to ensure the provision was maintained for all learners at the same level of efficacy available currently. 


A Member noted a recent Cabinet meeting had approved Hackney Carriages to increase their charges and, with reference to the rising cost of fuel, queried whether the projected overspends in home to school transport were realistic and whether the increase to Hackney Carriage charges could act as a precedent for taxi firms calling for increased charges for contracts. 


The Corporate Director for Education and Family Support agreed that it was an area of unprecedented challenges which had been the topic of discussion across local authorities in Wales. He highlighted the 33% increase per litre of fuel over the past six months which had proved to be very challenging for some transport providers.  He acknowledged the statutory duty to provide home to school transport for eligible learners and recognised the good transport providers in Bridgend who worked closely with them to deliver the key service despite it being challenging for them.


He advised that the recent tender exercise had indicated that the cost in that area had gone up and the need for some pressure in that area and, because of the volatility, projection was challenging. However, with regard to the contracts, they had sought to build in the costs over the longer term to make sure that the volatility was minimised as far as possible for the Council.


A Member asked, with reference to paragraph 4.3.1 of the report regarding schools delegated budgets, what the total sum of the deficit balance was of the five primary and one secondary school and what central local authority support was provided to get them into a balanced position.  In addition, he queried whether the grant funding which had been provided by central government, resulting in a number of schools being in a surplus position, mask the challenges faced by some schools and whether the local authority would be looking to claw back some of that money or allow the schools to keep it and remain in a surplus position.


The Cabinet Member for Education confirmed that provided the school had a financial plan for the surplus, which the Corporate Director for Education and Family Support and his team would go through with the schools, funds would not be clawed back.


The Corporate Director for Education and Family Support reiterated that there was no intention to claw back surplus from schools confirmed that there was a financial scheme, a statutory document that need to be followed. He confirmed that his team went through the formal process of analysing all school budget positions and highlighted the importance of doing so to maximise the use of school budgets for the needs of learners.


He paid credit to Chairs of Governors, Governing Bodies and head teachers for the remarkable efforts they had made over the challenging past two years. Whilst grateful for the additional grants received these have provided issues in themselves. Whilst there was a healthy budget surplus position, they were working with schools to ensure that was spent for the benefit of all learners.


The Corporate Director for Education and Family Support agreed that there were five schools representing a deficit budget and whilst he did not have the total amount of projected schools’ deficit budget to hand he agreed to provide this after the meeting.


However, what was important was to work closely with School Finance Officers on vacancy management and to ensure wherever possible, school budgets were managed, and grants maximised and to support schools effectively in conjunction with the School Budget Forum.


A Member noted, with reference to paragraph 4.3.2 of the report regarding out of county provision for residential care, the high budget and that the number of placements had risen from 13 to 16. She queried what was being done to bring the number of out of county placements back down to thirteen or less and whether the increase was a result of the staffing issues experienced.


The Corporate Director for Social Services and Wellbeing confirmed that the out of county residential budget was very volatile and demand led. Each child was assessed, and their care plan built on their individual needs. Some care plans would indicate an out of area placement was required because it was in the best interests of the child with some out of county placements being children living with family, connected persons or foster carers or in a specialist residential provision not available in the county borough.


Therefore, whilst a change of three might be seen as a concern, the budget was within what might be expected in a budget driven by the needs of children and young people and she confirmed that work was taking place nationally, regionally and locally across Wales to develop sufficiency of provision. She highlighted that many of the children who lived out of area, lived in neighbouring authorities or across South Wales, and that the authority made every attempt to keep children as connected as possible to the local area through schools and connection to families and aimed to return them safely to the area as need be.


The Corporate Director for Social Services and Wellbeing confirmed that whilst work would continue trying to reduce the number of children out of area, those placements would always be available if it was in the best interest of the child to do so.


The Deputy Leader added that some placements would be Court directed with the local authority having no say on where a child would be placed. In addition, she wished to note that the only secure unit in Wales, Hillside, was in a neighbouring authority and that it was an exceptionally costly placement.


A Member noted and welcomed the projected overspend of £185,000 on equipment and adaptions as he felt there would be a degree of success in people being discharged from hospitals into their homes which were fit for purpose and where they could live independently. Whilst noting it as an ‘invest to save model’, he queried what contribution the Health Board were making into the service area and if they were not, whether they should.


The Corporate Director for Social Services and Wellbeing confirmed that this budget pressure was met by the investment of Winter Pressures monies from Welsh Government that come via the Health Board. However, she highlighted the partnership working with the Health Board to invest that into areas such as this which support hospital discharge and was confident of seeing some investment through this avenue later in the year. In terms of sustainable and recurring investment, she advised that investment in this area from the Health board was not seen as part of their recurring budget but hoped for a move towards more integrated budgets to meet the needs of people with health and care needs at the point that they present.


In relation to the savings associated with street lighting, a Member asked whether all Council owned streetlights had switched to energy efficient light bulb and if not, she queried whether some of the savings could be utilised to change all lights thereby further increasing the savings. In addition, in relation to unadopted lights, she asked whether there would be any pressure bringing those streetlights up to standard in readiness for adoption, or whether those lights would need replacement once adopted.


The Cabinet Member for Communities clarified that the projected underspend on street lighting was part of the overall picture and offsetting overspends. In relation to new developments, he understood that they were fitting new LED lights in accordance with the specification provided to them by the authority.


The Corporate Director for Communities confirmed that all new streetlights were LED specified. She also confirmed that around 90% of the borough’s 16,000 streetlights had had the new bulbs fitted. However, she advised that she was concerned as the scheme to change the bulbs had been undertaken by use of a loan which would be repaid from the savings. Whilst the invest-to-save had been successful, the energy price inflation meant that the savings would narrow moving forward.


The Member understood that some developments were quite old and might not have received the current specifications. For example, Persimmon Homes had advised her that they were using different light bulbs to local authority.


The Corporate Director for Communities clarified that all adopted streetlights owned by the Council were included in the programme. 


In relation to the projected underspend of £175,000 in Highways Services, a Member noted and understood that it was primarily due to staff working on capital schemes but queried if the capital schemes were completed or ongoing and, if it was to be an ongoing prioritisation, whether there was concern about day-to-day jobs within the service.


The Corporate Director for Communities confirmed that the underspend was because they were generating incomes by charging time to the Welsh Government for work on grant schemes such as, the Active Travel Scheme, design of the Penprysg Bridge and the 20mph Scheme.


A Member noted with concern the projected overspend of £265,000 in Fleet Services due to reduced productivity levels and queried how it was being mitigated.


The Corporate Director for Communities agreed that it was a concerning picture but that there was a good joint fleet services model between the Council and South Wales Police at Ty Thomas. She advised that there had been some issues with the charging regime as there had been a significant amount of sickness in the service area which resulted in a reduction in chargeable work; hence the projected overspend. However, she stated that there was a more fundamental issue in that police and Council staff were trained to work on each other’s vehicles but the police were going to regrade their officers to a much higher rate. Whilst both would be trained to work on a plethora of different vehicles, including electric and hydrogen, there would be a disparity in grading. She confirmed that that this was the second year where there was a projected overspend as a result of not getting enough income in to cover the cost of the service. There was to be a fundamental review of how the service operated and the service was financed with South Wales Police. She confirmed that she was content to bring the matter back to discuss with Scrutiny for monitoring.


A Member noted that homelessness was a key corporate priority and a corporate risk for the Council. He asked whether the underspend masked the pressures in that area.


The Chief Officer for Finance, Performance and Change confirmed that some money had been received from the hardship fund to help with ongoing costs into the year and agreed that although an underspend was reported, there were pressures within the budget, such as temporary accommodation costs. She agreed that budget pressures and significant service pressures were anticipated on that budget.


A Member queried, with reference to Appendix 2, whether the language used was consistent across all Directorates. He noted in Communities there was reference to ‘should be achieved’ which was marked as green in some areas and ‘achieved’ and queried whether that was a projected status.


The Chief Officer for Finance, Performance and Change confirmed that it related to the projected status for the year but agreed that the narrative could be tighter to be clear on what had been achieved and what was still to be achieved for the remainder of the year. 


A Member asked, in relation to Appendix 3, what was included in the £1.634 million underspend in the Council Wide Budgets.


The Chief Officer for Finance, Performance and Change advised that it included a number of things but highlighted the Council Tax Reduction Scheme and that a lot of work would be done to ensure that people were aware of available support.


A Member highlighted the impact of the volatility of the price of fuel on services, providers and the Council budget and recommended the need to be mindful of this going forward when scrutinising related reports.


Following detailed consideration and discussions with Officers and Cabinet Members, the Committee made the following Recommendation:


  1. The Committee highlighted the impact of the volatility of the price of fuel on services, providers and the Council budget and recommended the need to be mindful of this going forward when scrutinising related reports.


and the Committee requested:


  1. Information regarding current recruitment issues, vacancy rates and data regarding repeat advertisements for job vacancies.


  1. The total amount of projected schools’ deficit budget for 2022-2023.


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