Agenda item

Revenue Budget Monitoring - Quarter 3, 2022/23

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 2022/23 financial year was presented for the Executive’s consideration.


Councillor Robin Williams, Portfolio Member for Finance, Corporate Business and Customer Experience reported that on 10 March, 2022 the Council set a budget for 2022/23 with net service expenditure of £158.365m, to be funded from Council Tax income, NDR and Welsh Government Revenue Support Grant. The overall projected financial position for 2022/23, including Corporate Finance and the Council Tax fund, is a projected underspend of £1.970m which represents 1.24% of the Council’s net budget for 2022/23. Both Adults’ Services and Children’s Social Care budgets remain under pressure but this is offset by underspending in other services, notably Waste Collection and Disposal. More information about budget variances is set out in the detailed report. Although as a report on the position at the end of the third quarter the final projected outcome can be made with a higher degree of certainty, unexpected events may occur before year end and Quarter 4 can be a high demand period both of which could affect the final outturn position.


The Portfolio Member for Finance cautioned that notwithstanding the forecasted overspend for services is £87k, Adults’ and Children’s Services are significantly overspent as shown in Table 4 of the report. Additionally, the underlying position is masked by a number of one off items (vacant posts, additional grant funding and use of reserves) that have contributed to a significant reduction without which the true financial position of the Council’s services would be much worse and would have weakened the Council’s financial resilience considerably.


The Director of Function (Resources)/Section 151 Officer referred to the funding shortfall in school budgets for pay as set out in Table 3 of the report due to the total cost of the pay award for schools being higher than that budgeted for in 2022/23. Although this pressure falls on other services as well, because the schools budget is delegated the additional cost would normally have to come from school balances; these are projected to fall as schools continue to utilise their reserves to balance their budgets leaving a minority of schools with little or no balances and the remainder with significantly lower balances than in the previous two years. It will therefore be difficult for some schools to fund the additional pay costs from their own reserves without a further budget allocation. This being so and given the extent of the shortfall of £1.074m, the Executive is asked to recommend that Full Council make up that gap from the Council general reserve with the additional allocation to be distributed to schools through the funding formula.


Referring to the overspend on Adults’ and Children’s Services, Councillor Alun Roberts, Portfolio Member for Adults’ Services confirmed that the demands on both services have been high. Care Inspectorate Wales’s recent performance evaluation review of Anglesey’s Social Services was positive and reflects the fact that the Council has been investing in those services in recent years to strengthen provision and to respond to demand.


Councillor Llinos Medi, Leader reflecting on the report highlighted the importance of prudent financial management and governance thereby enabling the Council to respond to changing circumstances.


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 2022/23.

·                To note the summary of contingency budgets for 2022/23 as detailed in Appendix C.

·                To note the monitoring of agency and consultancy costs for 2022/23 in Appendices CH, D and DD.

·                To recommend to the Isle of Anglesey County Council that Full Council approve funding of £1.074m from the Council Fund general balances to the delegated schools budget, to cover the additional pay costs above those originally allowed for in the 2022/23 revenue budget.

·                To approve the transfer of the net underspend on homelessness and homelessness prevention estimated at £260k to an earmarked reserve for homelessness and homelessness prevention in future years. This has occurred due to Welsh Government announcing a significant uplift of £373k to the No One Left Out grant.


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