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 2020/21 financial year was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that based on information to date, the overall projected financial position for 2020/21 including Corporate Finance and the Council Tax fund, is an underspend of £1.156m which is 0.81% of the Council’s net budget for 2020/21. Whilst welcoming the performance on which the prognosis is based the Portfolio Member cautioned that the situation can change significantly by year end especially when the ongoing effects of the Coronavirus pandemic are factored in with particular regard to the uncertainty around the return to normality of the Council’s services. The Welsh Government has provided councils in Wales with £232m to date to meet additional costs associated with dealing with the pandemic and to cover the loss of income incurred through the closure of services.

Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel reported that the Panel in considering the report felt that it provided a clear and self-explanatory statement of the Quarter 2 position and the Panel noted and welcomed the positive performance. The Panel was however concerned about the uncertainty going forwards including the lack of clarity  about next and future years’ funding.

The Director of Function (Resources)/Section 151 Officer guided the Executive through the significant service variances at Quarter 2 noting that the service budgets are expected to underspend by £1,595k due to reduced demand for Children’s Services and the impact which the closure of schools during the period April to July, 2020 has had on central education budgets. Welsh Government grant funding for loss of income has been included in the Quarter 2 calculations and this has contributed to the improved position especially with regard to the Leisure Service. The number of claims on the Council Tax Reduction Scheme was expected to rise significantly as a result of the economic fallout from Covid-19 and although the summer saw a spike in the number of claimants on the scheme the situation has since stabilised and claims have reduced. Whilst the extension of the Furlough scheme is thought to have helped ease the worst of the pressure on the scheme, the number of claims is 2.7% higher than it was at the end of March, 2020 and the cost of meeting the increased claims will fall to the Council. Council Tax income is down approximately 2% compared with the same period last year; the enforcement process has since resumed but the full effect of non-payment will not be seen until the debt collection process has been completed and an assessment of bad debt made. 

With regard to Covid-19 related expenditure from April to September, 2020 funded by Welsh Government, the Council has to date claimed £3.28m for additional costs arising from the pandemic of which £3.228m has been paid by Welsh Government. The balance of £52k shown as outstanding in Table 2 of the report has now also been paid. A further claim for 273k has been submitted for October, 2020. In relation to Welsh Government grant funding for loss of income form services during the pandemic a balance of £591k is outstanding as per table 3 of the report. However, the claim was only made at the time of the report’s drafting and there is usually some time lag between submission and payment. The Officer concluded by saying that while the immediate financial situation is encouraging, the Council is entering the challenging winter quarter when pressures on services - in particular Highways and Adults’ Services - can and do increase.  

It was resolved –

•           To note the position set out in Appendices A and B of the report in respect of the Authority’s financial performance to date and expected outturn for 2020/21.

•           To note the summary of Contingency budgets for 2020/21 detailed in Appendix C of the report.

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

•           To note the position of the efficiency savings for 2020/21 in Appendix D of the report.

•           To note the monitoring of agency and consultancy costs for 2020/21 in Appendices DD, E and F of the report.