Agenda item

Context:

The purpose of this report is to provide Members with information on the revenue and capital outturn position of the Authority at the end of reporting period 1 which represents the financial outturn position for the 2018/19 financial year based on May inclusive activities.

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;

·         Monitor the achievement of predicted efficiency gains or progress in relation to savings proposals.

Recommendations:

That Members consider a net revenue forecast of £471,000 overspend.

Members consider a capital outturn spend of £35.7m, which accords with budget provision for the year, after proposed slippage of £75,000. This describes a breakeven position not uncommon for this early in the year, although there is a potential for additional 21c schools costs in respect of additional asbestos removal and treatment costs not anticipated, which colleagues indicate could be the order of £350,000.

Considers the use of reserves proposed in para 3.8.1.

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

Members note the extent of movements in individual budgeted draws on school balances, and acknowledge a reported net forecast deficit of £622k resulting, and support the amendments to MCC’s Fairer Funding Regulations as described in para 3.8.13 for onward engagement with schools forum and governing bodies.

Members Scrutiny:

In response to a number of Member questions:

In response to a question regarding the asbestos problem in 21^st Century Schools, given the age of the schools it was common for asbestos to be a useable building material.  There is now an understanding that during a project review the building materials will be tested and an allowance made for the professional disposal of such materials.

The continuing trend of overspending in the Passenger Transport Unit was challenged.  The Assistant Head of Finance explained we rely heavily on the PTU service in such a rural authority.  The extent of PTU cost mean it is a significant area to identify if we could do things more economically or sustainably.  It was recognised that capacity wise, in terms of both PTU and the officer support, it would be a phased approach rather than all achieved in April.  The Officer noted that they should have been more prudent in estimation of progress.

It was explained that during the budget process the financial planning assumption on a 1% pay award had increased to a financial agreement of a 2% pay award, equating to just over £1million, which meant we had to find the resources to afford that.  A proposal to sell the effect of our recycling credits to improve another authority’s performance had been put forward.  By the time Blaenau Gwent decided to not invest the budget had been settled, so needed to be managed through the budget monitoring process.

Clarity was sought around the ongoing position of the ADM.  The Assistant Head of Finance explained that the optimism of some of the forecast figures in the monitoring report was reflected in Members being asked to consider the sustainability of the Tourism, Leisure and Culture Services

Committee Conclusion:

The Chair thanked the team for the report and congratulated staff on the incredible job they do.  Looking forward, there are challenging times ahead and councillors are under increasing pressure to provide residents with a high standard of services.

The Council need to continue to lobby Welsh Government for a fairer settlement in order to continue to provide the core services and look at other ways of delivering as far as leisure and tourism are concerned.