Issue - meetings

Division/Wards Affected: All

Purpose: To provide Members with an updated forecast of the revenue and capital outturn position for the current financial year.

This report will also be considered by Select Committees as part of their responsibility to,

•      assess whether effective budget monitoring is taking place,

•      monitor the extent to which budgets are spent in accordance with agreed budget and policy framework,

•      challenge the reasonableness of projected over or underspends, and

•      monitor the achievement of predicted efficiency gains or progress in relation to savings proposals.

To provide an update on the financial impact of Covid-19 on the Council.

Authors: Peter Davies, Chief Officer for Resources (Section 151 officer)

Jonathan Davies, Acting Assistant Head of Finance (Deputy S151 officer)

Contact Details: peterdavies@monmouthshire.gov.uk; jonathandavies2@monmouthshire.gov.uk

That Cabinet recognises the improvement in the forecast deficit at month 6 of £1.94m with the Council’s core service delivery, a £1.438m reduction in the forecast from month 2 when taking into account the expected non-teaching pay award.

That Cabinet request that the Senior Leadership team manage the forecast deficit on core service delivery of £1.94m, both through continuing budget recovery action and the expectation of further specific grant funding from Welsh Government before the year-end, recognising the long history that the Council has of working within budget.

That Cabinet recognises the importance consequence of a balanced budget position being achieved for 2021/22, in that it safeguards the need to draw on limited one-off reserve headroom retained to assist with meeting the financial challenges over the medium term and where uncertainty remains on the extent of Welsh Government funding.

That Cabinet recognises an overall net revenue forecast deficit at month 6 of £5.91m, which takes account of a further forecast deficit of £3.97m that is directly associated with the extraordinary financial pressures attached to Covid-19.

That Cabinet can be reasonably assured based on commitments from Welsh Government, that all Covid-19 associated cost pressures and income losses that are eligible to be met by the Welsh Government Covid-19 Hardship fund will be funded to the end of March 2022.

That Cabinet note that there remains significant Covid-19 related cost pressures and income losses forecast after the end of March 2022 which presently have no funding commitment from Welsh Government. The Council will need to carefully assess the risk of these pressures during the ongoing budget strategy for 2022/23 and the mitigating measures available in the event that no further funding comes forward.

That whilst the Council is grateful for the funding commitments made to date by Welsh Government through the Covid-19 Hardship fund to the end of March 2022, Cabinet will continue to make strong representations to Welsh Government for further clarity on funding for the ongoing pressures post March 2022. This is both in the form of continuing to respond to the direct impact of the pandemic but just as importantly, the wider and longer lasting indirect impact of the pandemic on Council services, particularly where this is now becoming evident in the areas of Homelessness, Children’s services, Adult social care and Children’s additional learning needs.

That Cabinet recognise the ongoing risk of the awaited outcome of pay negotiations for non-teaching staff and that in the event that any pay award is agreed above the current forecast of 1.75%, that this will present a further budgetary pressure. Welsh Government have been clear that no compensating funding is anticipated and given that the Minister confirmed via the final settlement that this already took into account any subsequent pay awards.

That Members note that the overall revenue outturn position continues to be subsidised by £2.2m of capital receipts which are being used to fund identified eligible expenditure under the flexible use of capital receipts directive. Reliance on this mitigation is not a  ...  view the full decision text for item 3b