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, 2023/24 was presented for the Executive’s consideration.

Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance presented the report saying that based on the data to the end of Quarter 2, the overall projected financial position for 2023/24 including Corporate Finance and the Council Tax fund is a projected overspend of £0.364m which represents 0.21% of the Council’s net budget for 2023/24. Whilst this is an improved position from that reported at the end of Quarter 1 and is a robust performance given the challenges, some services specifically Adults and Children’s social care remain under considerable pressure as reflected by Table 1 in the report and are overspent which is offset only by under expenditure in other services within the Council. The Portfolio Member for Finance referred to the UK Government’s Autumn Statement last week which made no mention of additional funding for local government either in England or Wales which was worrying especially given the perilous state of some councils’ finances. The award of an extra £305m to Wales (a consequential of increases in spending in England) is unlikely even to cover increased pay costs in Wales before the pressures arising from increased Teachers’ pension costs are also taken into account. The local authority financial landscape in Wales is therefore concerning. 

The Director of Function (Resources)/Section 151 Officer advised that whilst the figures in being based on six months of actual expenditure are therefore firmer, the coming winter period can be challenging especially for Adults’ Social Care and Highways. The cost-of-living crisis has not abated and is likely to result in increased demand for a range of Council services. Whilst the non-teaching staff pay award for 2023/24 has been settled and the costs met from the existing provision the settlement being the same as the sum offered by the Employers back in March 2023 there is no indication that Welsh Government will provide additional grant funding to cover the cost of the Teachers’ pay increase as from September 2023 as it did in 2022. The main budget variations in the report relate to Adults and Children’s services with the position of the former having improved while the latter has deteriorated due principally to extra costs as a result of changes to current placements. Council Tax income is close to the budget and Council Tax collection rates have returned to pre-Covid levels. A rebate of £1.2m on the rates payable on Oriel Ynys Môn has been secured following appeal and will be added to the Council’s balances.

The Executive’s members considered the report and issues were raised including the possibility of Welsh Government imposing a penalty for non-achievement of recycling targets for 2021/22 and 2022/23 which could impact the outturn position of the Waste Management Service although it was also noted that recycling rates are back on an upwards trajectory helped by input from WRAP Cymru. Members recognised that many challenges lie ahead especially with regard to the 2024/25 budget and that some services are coming under increasing pressure especially social care after many years of under investment nationally. The importance of continuing to monitor budget performance was emphasised so that pressure points can be identified and prepared for when developing the 2024/25 budget. The timeline with regard to negotiations on 2024/25 pay settlements and implications for setting the budget were discussed with the Director of Function (Resources)/Section 151 Officer advising that pay settlements for 2024/25 will remain challenging because of the increase in the National Living Wage which will affect the care sector in particular and therefore the Council as a commissioner of care services and also because of the current inflation rate. A provision for pay increases will have to be made in the draft budget pending confirmation of the Union’s submission and Employer’s offer for 2024/25 after the New Year.

It was resolved –

·      To note the position set out in Appendices A and B in respect of the Authority’s financial performance to date and expected outturn for 2023/24.

·      To note the summary of Contingency budgets for 2023/24 detailed in Appendix C to the report.

·      To note the monitoring of agency and consultancy costs for 2023/24 in Appendices CH and D.