Issue - meetings

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

It was resolved –

·      To note the position set out in Appendices A, B and C of the report in respect of the Authority’s financial performance to date and expected outturn for 2025/26.

·      To note the summary of contingency budgets for 2025/26, detailed in Appendix CH.

·      To note the monitoring of agency and consultancy costs for 2025/26 in Appendices D and DD.

·      To note the monitoring of Cost of Change Fund expenditure for 2025/26 in Appendix E.

·      To note that the estimated balance of the Council’s general balances as at 31 March 2026 stands at £18.949m.

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 4 2025/26 was presented for the Executive’s consideration.

Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance, Corporate Business and Customer Experience presented the report noting that the overall projected financial position for 2025/26, including corporate finance and the Council Tax fund is an underspend of £2.631m (1.36% of the net budget for 2025/26). The draft outturn position is better than the Quarter 3 forecast and the projected underspend, and its impact on the Council’s general balances, strengthens the Council’s financial position allowing greater flexibility when developing the 2027/28 revenue budget.

The Director of Function (Resources)/Section 151 Officer reported that in respect of  services and corporate budgets specifically, the outturn position shows an underspend of £1.3m against a budget of £192.5m, equating to under 1% of the total budget (Table 2 refers). The remaining underspend relates to Council Tax, with core Council Tax income £119k above budget and the Council tax premium £1.212m above target. The increase in income is largely due to properties moving from business rates to Council Tax following  changes in eligibility rules for self-catering accommodation.

He emphasised that the overall budget underspend masks ongoing pressures in certain areas and is largely attributable to non-recurring factors such as one-off grants, reserves, staff vacancies and increased income, including a GwE closure grant. Appendix C provides detailed analysis of budget variances and highlights continuing underlying demand pressures in Adult Services (£1.097m) and Children and Families Services (£1.923m), the latter driven primarily by rising costs and numbers of out of county looked after children’s placements.  The Council has sought to mitigate these pressures by developing inhouse provision, such as the Cartrefi Clyd.

In response to a query regarding the risk of appeals from owners of self-catering properties moved from business rates to Council Tax, the Director of Function (Resources)/Section 151 Officer advised that the risk had been recognised at the end of the 2024/25 financial year, and £900k had been placed in an earmarked reserve to cover potential repayments arising from appeal decisions, some of which could be backdated to April 2023.

Executive members also expressed concern about the reliance on grant funding and the way the current grant funding system operates. They highlighted the challenges created by uncertainty over whether grants will be received, the timing of awards, and the fact that many grants are tied to specific projects that may not be a priority for the Council. Members noted that this uncertainty makes financial planning more difficult and that it would be helpful if Welsh Government incorporated more grants into the core funding settlement so that councils know where they stand financially.

The Director of Function (Resources)/Section 151 Officer confirmed that the Council receives approximately £30m in grants in addition to the funding settlement. Some are recurring, some come with spending conditions and others are intended to support budget pressures. Grant funding is  ...  view the full minutes text for item 8