Agenda item

Context:

To scrutinise the revenue and capital outturn position of the Authority at the end of reporting period 3 which represents the financial outturn position for the 2017/18 financial year.

Recommendations Proposed To Cabinet:

1.    That Members consider a net revenue outturn underspend of £653,000, an improvement of £694,000 on period 2 (month 7) outturn predictions.

2.    Members consider a capital outturn spend of £46.8 million against a revised budget of £47.2 million, after proposed slippage of £11.8 million, resulting in a net underspend of £395,000. 

3.    Considers the use of reserves proposed in paragraph 3.7.1 of the report.

4.    Supports the apportionment of general underspend in supplementing reserve levels as described in paragraph 3.7.3 of the report, below, i.e.:

Priority Investment Fund                            £155,000

            Capital Receipts Generation Reserve     £50,000

Balance Invest to Redesign Reserve       £448,000

            Total                                                               £653,000

5.    Members note that the low level of earmarked reserves will notably reduce the flexibility the Council has in meeting the challenges of scarce resources, going forward.

6.    Members note the extent of movements in individual school balances placing emphasis on schools to review the extent that recovery plans can be delivered over shortened timescales, and appreciate a net use of balances of only £94,000 instead of the original budgeted intention of schools to draw on balances by £877,000.

Member Scrutiny:

·         In response to a Member’s question regarding the cost to the Authority due to the recent harsh winter, the Assistant Head of Finance stated that this would have been part of a bid to Welsh Government in relation to a proportionate funding return.  Details would be sought and passed on to the Select Committee.

·         Our approach to adult social care is about care in the community and care at home.  It is welcome that our age of people going into residential care units is likely to be less than the Welsh average. However, this has implications getting to people’s homes during the winter and can be more onerous due to inclement weather conditions.

·         Monmouthshire’s costs for the additional gritting of roads at the end of March 2018 was over £400,000.  £33,000 was returned from Welsh Government.  The decision to allocate this funding was based on its RSG and capital funding programme.  Historically, Monmouthshire is the worst funded per capita via this method.  Any changes to the funding formula has to be by agreement of the 22 local authorities in Wales. The formula was established by the 22 local authorities.

·         The Assistant Head of Finance informed the Select Committee that the Welsh Government was intent to derive discretionary tax raising powers in the next 12 months. One of the issues being considered was the income tax consequence helping to afford social care.  A 1% increase to income tax levels would likely have a £200,000,000 effect in Wales which still would not be sufficient to satisfy all of the budget pressures.

·         Budget Planning for the Directorate has never failed to produce a surplus with good medium term financial planning being undertaken.

·         Capital slippage is not a manufactured figure.  However, slippage figures are used to affect treasury costs.

·         In response to a Select Committee Member’s question regarding the use of red and black to identify figures in budgetary reports that are in credit / deficit, it was noted the Authority is following the common convention in accounting terms.

·         It was noted that the new Corporate Director for Social CareSafeguarding & Health would be in attendance at future Select Committee meetings to answer questions in respect of performance issues and financial matters that affect the Directorate.

·         A Members’ seminar to be held in the autumn of 2018 to help Members gain a better understanding of the Authority’s budget process.

·         The Assistant Head of Finance encouraged Members to meet with him to discuss particular financial issue in more detail.

·         The Assistant Head of Finance stated that he would liaise with the Welsh Local Government Association regarding inviting a representative to attend a Joint meeting of Economy and Development and Adults Select Committees to discuss the Local Government Funding Formula.