Decision details

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 sustainable measure in the longer term and its core purpose is to generate ongoing revenue savings and/or transform service delivery in a way that reduces costs or demand for services in future years for the Authority.

That Members note the forecast 93% delivery of the budgeted mandated savings as detailed in appendix 3 and as agreed by full Council previously and the implicit remedial action/savings included in the financial outturn to compensate for circa 7% savings (£324k) reported as delayed or unachievable by service managers.

That Cabinet notes the extent of forecast movements in Schools reserve usage contained in table 4 and appendix 1 which is informed and driven by the school investment plans that were supported by the significant and unprecedented late grant support provided by Welsh Government to schools at the end of 2020/21.

That Cabinet considers the forecast capital outturn spend of £27.6m as outlined in appendix 1 that would result in forecast slippage of £51.7m, noting the continuing delays in progressing some of the key capital projects due to the ongoing challenging operating conditions and impact both internally and externally in relation to Covid-19.

That Cabinet approve the Capital budget revisions as listed in appendix 4 to this report resulting from the notification of external capital grant awards to the value of £3.0m and draw on Section 106 balances of £293k.