Agenda and minutes

2020-21 Initial Budget Proposals, Corporate Scrutiny Committee
Monday, 13th January, 2020 9.30 am

Venue: Committee Room 1, Council Offices, Llangefni. View directions

Contact: Ann Holmes 01248 752518 

Items
No. Item

The Chair welcomed all those present to this meeting of the Corporate Scrutiny Committee and he extended a particular welcome to Sioned Rowe as the newly appointed Scrutiny Officer, and to Councillor Peter Rogers who was returning to Council business following a period of recuperation after knee surgery.

1.

Declaration of Interest

To receive any declaration of interest by any Member or Officer in respect of any item of business.

Minutes:

No declaration of interest was received.

2.

Minutes of the Previous Meeting pdf icon PDF 311 KB

To present the minutes of the previous meeting of the Corporate Scrutiny Committee held on 21 November, 2019.

Minutes:

The minutes of the previous meeting of the Corporate Scrutiny Committee held on 21 November, 2019 were presented and were confirmed as a correct record.

3.

2020/21 Budget Setting - Revenue Budget Initial Proposals pdf icon PDF 1 MB

To present the report of the Scrutiny Manager and the Director of Function (Resources)/Section 151 Officer.

 

Minutes:

The report of the Scrutiny Manager outlining the context to the 2020/21 budget setting process was presented for the Committee’s consideration. The report incorporated at Appendix 1, the report of the Director of Function (Resources) and Section 151 Officer on the initial proposals for the 2020/21 Revenue Budget and the factors having an impact thereon.

 

The Chair clarified that the budget setting process for 2020/21 has been delayed due to the General Election in December, 2019 and consequently, the later than usual announcement of the provisional local government settlement.

 

The Portfolio Member for Finance summarised the situation by saying that although the budgetary position for 2020/21 is better than anticipated due to an increased provisional settlement announced by Welsh Government on 16 December, 2019 which is to be welcomed, the financial  circumstances overall remain challenging. The Council’s reserves have reduced having been used to meet cost pressures in areas where demand has been and continues to increase including Adult Social Care and Education which suggests that those services’ base budgets may need to be reviewed and/or realigned. Welsh Government assumes a 7.1% increase in Council Tax levels, and the settlement although improved, in real terms is only on a par with the Welsh Government support received back in 2012/13. The Portfolio Member said that he therefore advised taking a prudent approach in terms of making recommendations with regard to the 2020/21 Revenue Budget.

 

The Director of Function (Resources)/Section 151 Officer guided the Committee through each of the sections in the report at Appendix 1 on the proposed revenue budget for 2020/21.The following main points were highlighted and elaborated upon –

 

           The main assumptions in the Medium Term Financial Plan approved by the Executive in September, 2019. These have been taken into account in calculating the standstill budget for 2020/21.

           The calculation of a standstill budget for 2020/21 as a starting point for the budget setting process. The standstill budget is a budget which provides resources to operate services at 2019/20 levels but updated to reflect any known changes outside of the control of the services (committed changes) and to reflect the costs in 2020/21.

           The committed changes and their impact in terms of adjustments made to the budget as set out in paragraphs 3.1 to 3.10 of the report.

           Changes made to contingency budgets (built into the budget to cover fixed term costs, potential risks or to meet unexpected events) as shown in Table 1 of Appendix 1. The improved financial position in 2020/21 allows the Council to reduce the Salary and Grading Contingency as it is not expected that significant reductions will have to be made to staffing numbers in 2020/21.

           Staffing costs and their effects on the budget. Uncertainty around the pay award for non-teaching staff as from April, 2020 and for teaching staff from September, 2020 is a risk to the budget. The budget for the Council’s non-teaching staff is in the region of £45m per annum inclusive of NI and pension  ...  view the full minutes text for item 3.

4.

2020/21 Budget Setting - Capital Budget Initial Proposals pdf icon PDF 1018 KB

To present the report of the Scrutiny Manager and the Director of Function (Resources)/Section 151 Officer.

 

Minutes:

The report of the Scrutiny Manager incorporating the report  of the Director of Function (Resources)/Section 151 Officer on the initial proposals for the 2020/21 Capital Budget was presented for the Committee’s consideration.

 

The Director of Function (Resources)/Section 151 Office in highlighting the main points and elaborating thereon –

 

           Referred to the limited scope to consider various options for the Capital Budget in comparison with the Revenue Budget.

           Outlined the principles of the Capital Strategy approved by the Executive in February, 2019 on which the draft Capital Budget for 2020/21 is based (paragraph 2.2 of the report refers).

           Clarified with regard to funding the capital programme (Table 1 of the report) that the draft Local Government settlement figures encompass the General Capital Grant and Supported Borrowing; whilst capital grants for specific purposes have increased, the level of funding under both these headings has remained fairly constant over a number of years thereby limiting the Council’s options in terms of capital expenditure.

           Confirmed a £500k allocation from the Capital Reserve (leaving a forecast balance of £640k) to meet any emergency capital works required during the year and/or provide match funding should the need arise.

           Provided a rundown of the existing assets to be refurbished and/or replaced in line with the capital strategy approach, and the sums allocated thereto as per section 4.2 and Table 3 of the report adding that unless the Capital Grant is increased in future, the Council will find it difficult to achieve even the minimum of maintaining current assets.

           Summarised the other one-off bids for additional funding approved by the Senior Leadership Team for inclusion in the 2020/21 capital programme after assessment by the Finance Team using the Capital Strategy scoring mechanism (Table 4 of the report refers – total recommended allocation £2.174m)

           Referred to a number of other projects identified by the bidding process which do not require funding in 2020/21 but may need to be funded in 2021/22 or beyond as itemised in section 5.4 of the report.

           Clarified the position with regard to 21st Century Schools’ capital programme and the Housing Revenue Account capital programme.

 

Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel reported from the Panel’s meeting of the 9 January, 2020 where it had given detailed consideration to the initial 2020/21 capital budget proposals. The Panel had recommended that the following proposals for the 2020/21 Capital Budget be supported –

 

           Refurbishment/Replacement of assets £5.158m

           New one off capital projects £1.924m

           Leisure Facilities Improvement Fund £0.250m

           21st Century Schools £9.039m

           Housing Revenue Account £17.138m

 

Total New Expenditure £33.609m together with slippage of £3.294m from 2019/20 bringing the total Capital Budget for 2020/21 to £36.903m.

 

Having considered the report and the information presented verbally at the meeting, the Committee resolved to recommend the Capital Programme of £36.903m for 2020/21 as outlined, to the Executive.

5.

Finance Scrutiny Panel - Progress Report pdf icon PDF 1 MB

To present the report of the Scrutiny Manager.

Minutes:

A progress report on the work of the Finance Scrutiny Panel over the past 12 months to December, 2019 was presented for the Committee’s consideration.

Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel presented the update report to the Committee.

 

Having considered the report, the Corporate Scrutiny Committee resolved to note the following –

 

           The progress made to date with the work of the Finance Scrutiny Panel, both in terms of achieving its work programme and measuring impact and added value.

           That processes pertaining to budget monitoring for 2019/20 appear to be fit for purpose.

           The ongoing financial scrutiny development programme for Panel members which is being delivered by CIPFA Wales.

           That the Panel has escalated to the Committee’s attention, its continued concern regarding budget pressures in demand led services (social services and education) and that it continues to closely monitor the situation and has arrangements in place to ensure regular dialogue with Directors and Heads of Service to provide an explanation of the financial situation in both services and the impact of mitigation measures in place to control overspends. The Committee further notes that the Panel will continue to report back on its findings as the situation evolves.

           Arrangements to report to this Committee and the Executive on a 3 monthly basis on progress made by the Panel in implementing the forward work programme with more frequent reporting arrangements to be introduced if there is a specific risk to be addressed.

6.

Forward Work Programme pdf icon PDF 637 KB

To present the report of the Scrutiny Manager.

Minutes:

The Committee’s forward work programme was presented for consideration.

 

It was resolved –

 

           To agree the current version of the forward work programme for 2019/2 and,

           To note progress thus far in implementing the forward work programme.