Agenda item

To submit a report by the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer setting out the financial performance of the Council’s services at the end of Quarter 2 of the 2019/20 financial year was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that based on information to the end of Quarter 2, the overall projected financial position for 2019/20 including Corporate Finance and the Council Tax fund is an overspend of £1.935m which is 1.43% of the Council’s net budget for 2019/20. Specific points to note include the following –

•           That Quarter 2 figures indicate significant demand pressures within the first 2 quarters of the year in Adults’ Services (details as at paragraphs 3.2.2 and 3.2.3 of the report). The service was £963k overspent for the period with the forecast outturn for the year as a whole being a predicted overspend of £1, 214k (4.82%) due largely to 20 new cases, 7 of which alone account for additional expenditure in the region of £700k with the total additional costs amounting to around £960k. It is therefore important to note how quickly escalating numbers and the type of acute and complex provision that are often linked to these cases can impact on Adults’ Services’ finances and the Council’s wider budgetary position.

•           That it has been highlighted that the Council is liable to pay holiday pay to supply staff based on the amount of time worked dating back to 2015 at an estimated cost of £94k plus on-costs. As this would put school budgets under further pressure, it is proposed that with the Executive’s approval, these costs be funded from the General Reserve which has increased by £479k due to the return of 50% of core budget from schools previously provided by the Council for increased teachers’ pensions costs which has since been met by Welsh Government through a grant award to the Council. 50% of the surplus funding is being retained by schools and 50% is being returned to the General Fund thereby providing more capacity in the General Reserve to fund these school related costs.

The Director of Function (Resources) and Section 151 Officer referred to Council Tax collection and the impact of the increased premium on long-term empty homes on the number of empty homes on the Island which in turn has reduced the income which the Council derives from the Council Tax premium as reflected in paragraph 5.1 of the report as owners of empty homes take steps to remove their liability by disposing of their properties. The effect is made clearer in the report under item 9 in relation to the Council Tax Base for 2020/21.

The Executive in noting the information presented noted also that although the decreasing number of empty/second homes may mean less income for the Council, the higher Council Tax premium on second and long-term empty homes is serving its prime purpose of bringing more empty homes back into use. The Executive further noted with regard to the projected overspend on the 2019/20 Revenue Budget that the financial pressures in Adults’ Services need to be closely monitored.

It was resolved –

•                       To note the position set out in appendices A and B in respect of the Authority’s financial performance to date and expected outturn for 2019/20.

•                       To note the summary of contingency budgets for 2019/20 as detailed in Appendix C to the report.

•                       To note the position of the invest to save programme in Appendix CH.

•                       To note the position of the efficiency savings for 2019/20 outlined in Appendix D.

•                       To note the monitoring of agency and consultancy costs for 2019/20 set out in Appendices DD, E and F.

•                       To approve the use of the Schools’ Pension Reserve to fund outstanding holiday pay entitlement for school supply staff dating back to December, 2015 at a current estimated cost of £94k plus on-costs which is estimated at £110k in total.