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

Councillor Robin Williams, Portfolio Member for Finance reported that the 2020/21 financial year has been exceptional because of the Coronavirus pandemic which has had a significant impact on the normal delivery of the Council’s services. As such the financial performance does not reflect what would happen in a normal year. The net revenue budget for 2020/21 was £142.146m and based on information at the end of Quarter 3, a year-end underspend of £1.472m is projected. In welcoming the forecast underspend on service and corporate budgets the Portfolio Member cautioned that the situation may yet change in Quarter 4.

The Director of Function (Resources)/Section 151 Officer highlighted amendments to the report at Appendix B viz. Total Corporate Finance under the Estimated Outturn 31 March, 2021 at Q3 column  should read as an overspend (not underspend) of £160k and the Total for service budgets for 2020/21 under the same column should read as an underspend of £1.906m (not £1.746m). The Director of Function referred to the main budget variances which included those service areas particularly affected by Covid 19 for example Central Education where the closure of schools has led to reduced or no demand which has contributed to the overall underspend. He highlighted current risks and assumptions in relation to individual services specifically with regard to Children and Families’ Services and Adults’ Services wherein the demand which has likely been suppressed during lockdown, could increase when society reopens and normal service delivery is resumed.

The Council’s financial position has been greatly helped by the significant support provided by Welsh Government without which the forecast outturn would be a sizeable overspend. Details of Welsh Government’s Covid-19 grant funding to date are provided in section 9 of the report and this covers expenditure incurred by the Council in dealing with the pandemic and compensation for loss of income due to pandemic restrictions.

Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel reported that the Panel in scrutinising the revenue budget performance, had raised concerns about the erosion of the tax base as a result of self-catering properties switching to business rates and the implications for Council Tax income and also the number of ordinary properties converting to self-catering accommodation and the implications for housing on the Island. The Panel had further highlighted the need for ongoing monitoring of the level of demand in Children’s Services in order to be alert to any upturn as pandemic restrictions are eased.

The Executive collectively acknowledged the support by Welsh Government which had spared the Council from having to use its reserves to meet Covid-19 related expenditure and pressures, and was grateful for it. The Executive further recognised the additional work and effort put in by the Finance Service’s staff in administering and distributing Covid-19 business support grants in the period.

It was resolved –

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

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

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

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

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