Agenda item

Budget Monitoring - Month 2


There are many links between this report and some of the discussions held so far. I apologise that you are receiving this report that presents the position in Month 2 in May, considered by Cabinet in late July but due to officer shortages and the summer break of meetings, it has not been possible to bring this to you any earlier but hopefully I can provide you with an updated position, particularly in respect of the Welsh Government Hardship Fund.  I’d also like to apologise for an error in terms of the appendix on page 33 of the agenda which provides the full council position rather than the areas in your remit, but we will focus on these.


The overall forecast deficit on the revenue account is presented on page 23 of the agenda and reports a £9.02m deficit, but I feel it’s important to explain this and explain which relate to our core service delivery and which relate to effects of the covid pandemic. The distinction is important because we have accounted from them in the hope of recouping some of the costs and lost income from the Welsh Government Hardship Fund. At the point this report was written, we weren’t aware what monies we might receive, but we have now learnt that Welsh Government is continuing the fund through to March 2022, but there will be a tapering off of funding which need to be factored in.


The core focus for the finance team is detailed on Page 26 of the pack, highlighting the core service delivery deficit £2.5 million, which mainly comprises pressures associated with children’s services demand and similarly in adult services, largely due to the need to recruit additional staff to meet increased demand. Fleet maintenance pressures are affecting the Passenger Transport Service budget and there are increased costs associated with complex additional learning needs cases. Also there are costs associated with Landlord Services, due to the need to meet income targets.  It’s important to note that pressures are supported by the collection of income tax and capital expenditure, through capital receipts. It’s not a sustainable way forward and we will need to consider this in the medium term financial plan.


In terms of services that fall under the remit of this committee, the forecast overspend is 2.6m but some of this is covid related and can be recouped and offset by Welsh Government funding. We do have some non-covid related overspends which need to be carefully managed by budget recovery plans. The officer talked members through each of the overspends in turn which were displayed on the screen.


The officer also presented the capital position, highlighting that the assumed break-even budget at month 2 is susceptible to change due to price increases across many areas and a fuller position will be presented at month 6.  The chair thanked the two finance officers for their presentation of the report and invited questions from the committee.


Member Challenge


           A lot of the figures seem to be not achieved due to covid. In terms of car parks for example, I thought these were cost neutral, so how would the loss of use due to covid affect that budget?


With some services, we are budgeted to meet certain targets, so for example, school meals being served differently means take up of these will have affected the bottom line and present as a cost pressure. Car parking costs are used to offset other costs such as road safety and highway costs, so this did affect the budget and present as a pressure. We do need to have a certain level of pay and display parking to hit that income target.


           My question is about waste service provision. Now that social distancing is no longer required, I assume the additional vans required for waste collections services are no longer required.


Yes, you are correct, this cost will be recouped from the Welsh Government and should not affect the future position.


           Are the Civil Parking Enforcement staff back in their normal roles?


Yes, they are, some were shielding, and some were sick, but enforcement should resume now with a full complement of staff and we can report on this at month 6.


           Are we due to receive a grant for car parks or is it amalgamated in the hardship funding?

We have a deficit in the car park budget due to income lost but it will be covered by the hardship fund.


The Deputy Chief Executive thanked the finance team for their hard work in trying to balance budgets during unprecedented times. He explained there has been significant reliance on the covid hardship fund and we have been suitably funded by that and without it, the position would have been untenable. We have a few significant risks, firstly in terms of the hardship fund as the money will taper during the last 6 months of funding, so for the current financial year, we are content we can continue to recover income but there is no expectation this fund will continue next year which does present us with risks.  We will need to bear in mind that some of these issues won’t just fall away. Leisure centres and the need for social distancing affects income generation and similarly with carpark revenues, so we need to understand what is covered, homelessness being a key example. We are significantly underfunded through the settlement so post May 2022, there are clear risks to manage and mitigate. There are still core service overspends in adult services and additional learning needs, which bear heavily on the council’s finances, so there are a host of issues to grapple with, whilst trying to set a budget for next year.


Chair’s Conclusion:


The chair offered her thanks to officers for the comprehensive report and the additional context provided to assist members in understanding the latest budgetary position.


Supporting documents: