Decision details

That Cabinet recognises a balanced net revenue budget position at outturn after accounting for transfers to earmarked reserves that represents a significant improvement of £5.15m from the overall deficit reported at month 9, primarily as a result of:

·       Receipt of £5.29m of Welsh Government Covid-19 hardship funding since month 9 to compensate the Council to support its enhanced costs of service delivery and loss of income as a direct result of Covid-19 impact;

·       Receipt of significant unbudgeted Welsh Government grants that were communicated to and received by the Authority late in the financial year and that have offset core budget funding;

·       Underspends across many service areas as a result of the pandemic and where services have been reduced or stopped, travel requirements have reduced, office and buildings have remained closed and substantial staff vacancies have remained unfilled.

That Members acknowledge the extent that the Welsh Government Covid-19 Hardship Fund has covered all Covid-19 related additional costs directly incurred during the financial year of £11.25m together with compensation for loss of income of £8.38m.

That Members note the 85% delivery of the service specific budgeted mandated savings as detailed in Appendix 2 and as agreed by full Council previously and the implicit remedial action/savings included in the financial outturn to compensate for circa 15% savings (£734k) reported as delayed or unachievable by service managers.

That Members endorse the strategy applied to replenish earmarked reserves as noted within the report to support future financial challenges and ensure financial resilience during a period of significant uncertainty as we continue to recover from the pandemic and as the delivery of our services change in light of a severely altered socio–economic landscape, and as wider policy commitments, both locally and nationally begin to take shape.

In taking the approach set out above, Cabinet recognises the extraordinary nature of the 2020/21 financial year and accepts that there remains significant recurring service pressures and risks in 2021/22 and over the medium term.

Cabinet notes the unprecedented improvement in Schools reserve balances of £3.85m as contained in Appendix 1 that has resulted in 15 of the 17 schools entering the year in deficit returning to a surplus balance. This reflects the significant levels of grant support from Welsh Government that was notified late in the financial year primarily relating to Schools Revenue Maintenance Grant and Recruit, Recover and Raise Standards.

That Cabinet endorses the requirement for schools carrying significant surplus balances that are above levels guided by Welsh Government to provide investment plans setting out how they intend to spend their significant surplus balances, whilst also appreciating that the inherent structural budget deficits that have led to 17 schools being in deficit at the start of the year remain and require resolution irrespective of additional funding received.

That Members consider the capital outturn spend of £19.0m, introducing an underspend of £3.18m primarily due to underspending of the capitalisation directive budget and specific grant related schemes and that this subsequently releases £1.08m of capital receipts back to reserve for future capital investment.

That Members note the slippage requests of £49.92m as listed in Appendix 5 along with the related presumptions made around financing consequences as detailed in Appendix 1, and accept that officers will make a further assessment of the justification for scheme slippage and make recommendations back to Cabinet for final approval as part of the month 2 financial monitoring for 2021/22.