To receive a verbal report.
Councillor Dafydd Roberts, Chair of the Finance Scrutiny Panel provided a verbal report of the matters discussed at the Finance Scrutiny Panel’s 9 September, 2021 meeting as follows –
· Revenue Budget 2021/22 Quarter 1 update
The Panel having received a verbal presentation by the Director of Function (Resources)/Section 151 Officer on the 2021/22 Quarter 1 position, noted the following –
· That it was premature to come to a conclusion about service budget performance on the basis of Qt1 data as much can change in the coming months. Elements likely to generate in year savings include schools’ out of county placements; green waste income and the school meals contract.
· Budget pressures in Adults’ Services and the need also to keep an eye on the Children and Families Service’s budgets although these are currently underspent.
· Concern about the condition of roads and highways and in light of the Highways Service’s positive financial position the need to consider completing essential road maintenance work this year.
· That the Authority continues to be compensated by the Welsh Government for loss of income under a number of headings including parking and leisure centre fees.
The Panel in noting that the 2021/22 Revenue Budget is underspent at Quarter 1, resolved to recommend to the Scrutiny Committee that in light of the Highways Service’s positive financial position, consideration be given to completing essential road maintenance work this year.
· Capital Budget 2021/22 Quarter 1 update
The Panel having received a verbal presentation by the Director of Function (Resources)/ Section 151 Officer noted that the capital budget Q1 performance reflects the previous pattern of underspend with slippage most likely under the following headings –
· The Council’s housing development programme
· WHQS council housing modernisation programmes
· Disability adaptations in schools
· The Schools’ Modernisation Programme
· Flood prevention schemes
The Panel in noting the underspend on the 2021/22 Capital Budget at Quarter 1, noted also the likelihood that in future years the capital budget could be implemented to a different timescale so that it is set earlier in the year thereby enabling projects to commence sooner thus avoiding a significant underspend by the end of the year.
· Medium Term Financial Review
The Panel having received a verbal presentation by the Director of Function (Resources)/Section 151 Officer, raised the following points –
· That a number of factors may impact on the Council’s Medium Term Financial Plan including the increase in NI contributions, inflation and pay rises thereby adding to the Council’s costs.
· That savings are assumed under headings in relation to education out of county placements; green waste income, school meals income and those deriving from working differently.
· The significant challenges in trying to forecast cost pressures in the care sector
· The challenges also in trying to project the financial provision required for the next 3 years
The Panel having considered the information presented, noted the latest position with regard to completing the Medium Term Financial Review.
· Council Tax Premium on Second Homes – Consultation on the Level of the Premium
The Panel having received a comprehensive verbal presentation by the Director of Function (Resources)/Section 151 Officer which set out the main messages from the recent consultation on the level of the Premium on 2nd homes., noted the following –
· That there had been a total of 1,397 responses to the 6 week consultation – 1,069 by Anglesey residents and 261 by second home owners.
· That a total of 1,256 of respondents stated a post code local to Anglesey.
· That Welsh Government is also arranging a national consultation on the challenge of second homes.
· That a number of responses recognised the challenge as significant and one that would be addressed by raising the Council Tax Premium alone. As there is a high risk that a number of second homeowners will seek to flip their properties over to business rates, there needs to be clarity around the financial implications of raising the Premium in terms of potential loss of income to the Council via Council Tax.
· That it was recognised however that any financial loss to the Council from properties switching to business rates would not be long-term because of the way Welsh Government calculates each local authority’s SSA through a funding formula that takes account of income collected via Council Tax.
The Panel having considered the information presented, noted that any proposal to change the level of the Second Homes Premium would be scrutinised as part of the 2022/23 budget setting process and it recommended to the Corporate Scrutiny Committee that the Panel should respond to Welsh Government’s consultation on the challenge of second homes including by bringing pressure to bear on Welsh Government to close the current loophole whereby second homes are able to switch from the Council Tax system to business rates.
It was resolved to accept the report of the Chair of the Finance Scrutiny Panel on the matters discussed at the Panel’s latest meeting, to note the points brought to the Committee’s attention and to thank Councillor Dafydd Roberts for the feedback.