Agenda and minutes

Joint Scrutiny Committee (Budget Monitoring)
Monday, 15th March, 2021 10.00 am

Venue: Virtually via Microsoft Teams - if you would like to attend this meeting live via Microsoft Teams please contact committee.services@blaenau-gwent.gov.uk

Contact: Democratic Services  7788

Media

Items
No. Item

1.

Simultaneous Translation

You are welcome to use Welsh at the meeting, a minimum notice period of 3 working days is required should you wish to do so.  A simultaneous translation will be provided if requested.

Minutes:

It was noted that no requests had been received for the simultaneous translation service.

 

2.

Apologies

To receive.

Minutes:

The following apologies for absence were received:-

 

Councillor S. Healy

Councillor M. Cross

Councillor T. Sharrem

Councillor G. Collier

Councillor G. Paulsen

Mr. T. Baxter (Co-opted Member)

 

3.

Declarations of Interest and Dispensations

To receive.

Minutes:

The following declarations of interest and dispensations were raised:-

 

Councillor B. Summers – Item No. 6 - Revenue Budget Monitoring 2020/2021 Forecast Outturn to 31st March 2021 (as at 31st December 2020) (Silent Valley)

 

Councillor M. Cook - Item No. 6 - Revenue Budget Monitoring 2020/2021 Forecast Outturn to 31st March 2021 (as at 31st December 2020) (Silent Valley)

 

Councillor P. Edwards - Item No. 6 - Revenue Budget Monitoring 2020/2021 Forecast Outturn to 31st March 2021 (as at 31st December 2020) (Markets)

 

Councillor J.C. Morgan - Capital Budget Monitoring

Forecast for 2020/2021 Financial Year (as at
31st December 2020) (THI Tredegar)

 

 

 

 

 

 

4.

Joint Scrutiny Committee (Budget Monitoring) pdf icon PDF 322 KB

To receive the minutes of the special Joint Scrutiny Committee (Budget Monitoring) held on 23rd February, 2021.

 

(Please note the minutes are submitted for points of accuracy only).

Minutes:

The Minutes of the Joint Scrutiny Committee meeting held on 23rd February, 2021 were submitted.

 

The Committee AGREED that the Minutes be accepted as a true record of proceedings.

 

5.

Action Sheet - 23rd February 2021 pdf icon PDF 91 KB

To receive the Action Sheet.

Additional documents:

Minutes:

The action sheet arising from the Joint Scrutiny (Budget Monitoring) Committee held on 23rd February, 2021; whereupon:-

 

Review of the Industrial Units

 

A Member raised concerns around the continued deficit reported for this area and that the same issues were continually raised. The Member noted that there was always a ‘proposed’ review to look at leases and encourage occupancy. The Member was of the opinion that the Authority should maintain relationships with occupiers to ensure units are up to standard and ready to be leased. It would also be beneficial if the industrial estates are attractive to potential customers.

 

The Member stated that if employment was to be created and sustained within Blaenau Gwent, the Authority’s industrial units needed investment to ensure they are fit for purpose.

 

The Corporate Director Regeneration and Community Services advised that the Authority had a high occupancy rates of industrial units. The Regeneration Scrutiny Committee had also considered a programme of works which had initially focused on the Roseheyworth Industrial Estate which due to the poor condition of the units had been left unoccupied, however, these units were now fully occupied. Therefore, the Corporate Director felt that where investment work was being undertaken it had shown benefits.

 

 

The Corporate Director added that over the last year the Authority had looked after existing businesses in Blaenau Gwent which was right and proper during the uncertain times of the pandemic.

 

The Corporate Director further reported that a vacant post had been filled within the Team for an officer to deal with units. There was 180 units across Blaenau Gwent and the Team was working their way through these units as they became vacant or with current leaseholders.

 

The Corporate Director Regeneration and Community Services confirmed that there had only been one review and an action plan had been developed. The Corporate Director concurred with frustrations that progress had been slow in the past year, however vacancies were low and occupancies were high in units. It was important that Blaenau Gwent’s industrial units continue to receive investment in order to attract tenants and all these objectives were included in the action plan.

 

The Book Fund

 

A Member reiterated the question raised at the last Joint Scrutiny Committee meeting in relation to the £50,000 spend on books in 2019/20 which had increased this year. There was approximately £82,000 ring-fenced for the book fund and the Member asked where the remaining money had been spent.

 

The Member noted that a report was to be considered by the Education and Learning Scrutiny Committee prior to a briefing note being provided, however, the Member felt that the report should also be presented to the Joint Scrutiny Committee for information following the request made.

 

The Corporate Director Education advised that a report had been presented to the Education and Learning Scrutiny Committee in relation to the Welsh Public Library Standard. A briefing note would now be drafted for Joint Scrutiny Members which detailed the historical spend and proposals going forward.

 

Councillor W.  ...  view the full minutes text for item 5.

6.

Revenue Budget Monitoring -2020/2021, Forecast Outturn to 31 March 2021 (As at 31st December 2020) pdf icon PDF 583 KB

To consider the report of the Chief Officer Resources.

Additional documents:

Minutes:

Consideration was given to report of the Chief Officer Resources.

 

The Chief Officer Resources advised that the report outlined the Forecast financial position to the end of March 2021 across all portfolios, forecast outturn for Fees & Charges and Progress on the Bridging the Gap Projects for 2020/2021.

 

 

The Chief Officer Resources noted that the overall forecast outturn as at December 2020 was an adverse variance of £4.719m. However, following  the application of Welsh Government Hardship funding the forecast was a favourable variance of £0.552m which was a much improved position compared to the forecast in September 2020 which reported an adverse variance of £0.248m after the hardship funding.

 

The Chief Officer Resources further spoke to the report and provided a detailed overview of the forecast overall financial position across all portfolios as at 31st December, 2020 and outlined the main adverse variances. The Chief Officer noted that Action Plans to address the cost pressures were detailed in Appendix 4.

 

At this juncture the Chair invited questions/comments from the Committee.

 

A Member referred to overspending in certain budget areas which he felt was no fault of the department or staff but was around the decision making of Members. The Member noted the Environment Portfolio position which was in deficit with little or no attempt being made to address the budget pressure. There appeared to be no effort to counteract these cost pressures and the Member was of the opinion that the Authority had a duty of care to ensure budget are kept in a favourable position in light of the hardship monies being received from Welsh Government. The Member felt that the Executive Members responsible for the Environment Portfolio and the Regeneration Portfolio should be tasked to give consideration to these ongoing cost pressures.

 

The Member further noted the favourable variance being reported for the second HWRC in Roseheyworth and it was confirmed by the Corporate Director Regeneration and Community Services that the favourable variance was due to the delay in opening as well as income being forecasted for diverted black bag waste.

 

 

 

 

The Member advised that he did not feel that an Authority of this size needed a second HWRC and he had been critical of the decision taken. The Member was of the opinion that Members expected too much and felt that the report highlighted the amount of work needed to balance the budget. The Member noted that some matters were seasonal, however it was also down to the decision making in these areas and the responsible Executive Members should look how the reductions could be achieved in order to reduce these cost pressures.

 

The Chair noted that the decision for a second HWRC site in Roseheyworth had been a Council decision and the Chair stated that he welcomed the decision as there was a need for a second HWRC.

 

Another Member noted the comments made in relation to overspends in portfolios and asked if the relevant amount of monies was being allocated to budgets to prevent overspends.  ...  view the full minutes text for item 6.

7.

Capital Budget Monitoring, Forecast for 2020/2021 Financial Year (As at 31 December 2020) pdf icon PDF 431 KB

To consider the report of the Chief Officer Resources.

Additional documents:

Minutes:

Consideration was given to report of the Chief Officer Resources.

 

The Chief Officer Resources spoke to the report which noted the Forecast financial position to 31st March 2021 across all portfolios and gave details of the significant adverse and favourable variances as contained in the report.

 

At this juncture Members raised questions, observations and comments in relation to the report presented.

 

A Member asked if the costs incurred for the New HWRC Site in Roseheyworth were related to Covid-19.

 

The Chief Officer Resources advised that the costs were due to increased costs of the contractor which related to measures put in place due to Covid-19 to ensure work continued during the pandemic.

The Corporate Director Regeneration and Community Services added that these costs had been reflected in contracts across the UK during the pandemic. The costs related to workforce having to implement social distancing and the cost of raw materials had risen and there had been delays in sourcing materials outside of the UK. The Corporate Director added that negotiations are ongoing to ensure increased costs are kept to a minimum.

 

A Member asked if the Workplace Transformation costs included the relocation of Democratic Services to the General Office. The Corporate Director Regeneration and Community Services confirmed that these monies were for previous works around the transformation programme. The 2021/2022 budgets would include costs incurred for the Democratic and Community Hubs.

 

In response to a question raised about Ebbw Vale Test Track, it was confirmed that the costs reported in the scrutiny reports regarding Consultancy fees related to costs incurred for 2018/19 & 2019/20. The £50,000 for 2020/2021 reported in the capital report was additional.

 

The Member felt that a report should be presented to the relevant Scrutiny Committee.

 

This course of action was AGREED.

 

The Committee AGREED, subject to the foregoing that the report be accepted and

 

 (a)        appropriate challenge was provided to the financial outcomes in the report;

 (b)        continued support for the appropriate financial control procedures as agreed by Council; and

 (c)        the budgetary control and monitoring procedures in place within the Capital Team, to safeguard Authority funding be noted.

8.

Use of General and Earmarked Reserves 2020/2021 pdf icon PDF 597 KB

To consider the report of the Chief Officer Resources.

Additional documents:

Minutes:

Consideration was given to report of the Chief Officer Resources.

 

The Chief Officer Resources advised that the report provided the forecast reserves position for 2020/2021 as at Quarter 3 and noted the statutory requirements concerning Local Authority Reserves as detailed in the report.

 

The Chief Officer Resources referred to Section 6 of the report which detailed the overall summary of the forecast financial position in relation to the balances in general and earmarked reserves at 31st March, 2021. The Chief Officer outlined Table 1 which showed the increased forecast position for the general reserve at year-end 2020/2021. The balance represented 5.28% of net revenue expenditure which was above the 4% target level of £5.414m. This indicated further progress towards strengthening the financial resilience of the Council and provided a buffer to deal with unexpected future issues.

 

The Chief Officer Resources reported that the forecast increase in general reserves was the result of a number of factors which included a forecast net portfolio underspends of £0.552m and an agreed budget contribution in 2020/21 of £0.200m. This supported medium term financial planning and strengthened the Council’s financial resilience. The Chief Officer Resources also noted the forecast level of earmarked reserves as at 31st March 2021 which was anticipated to be £9.189m which was an in year increase of £0.917m and the Chief Officer noted that further details of earmarked reserve movements was outlined in Appendix 1.

 

The Chief Officer Resources advised that the level and adequacy of reserves are regularly reviewed and monitored through regular outturn/forecast reporting. However, in comparison to other Welsh Authorities, Blaenau Gwent still had one of the lowest levels of general and earmarked reserves. In order to meet the Welsh average, general and earmarked reserves would need to increased significantly to approximately £26.4m.

 

The Chief Officer noted that failure to increase reserves would attract criticism from regulators.

 

In response to a question raised around the level of reserves, the Chief Officer Resources advised that £1m monies had been planned to put into ear marked reserves for next year as part of the budget setting process, however this report details the 2020/2021 position.

 

Another Member raised concerns around the level of monies agreed to be placed into reserves for the next financial year and strongly disagreed to this course of action whilst the residents of Blaenau Gwent have had a great deal of hardship during the previous year.

 

The Member further referred to the overspends in some Portfolios and asked if monies would be taken from reserves to ensure these budgets are balanced.

 

The Chief Officer Resources advised that no monies would be taken from reserves as the Council forecast a favourable position, subject to no significant issues. The Chief Officer added that in most instances overspending budgets are offset by underspends in other areas and there would be no need to use reserves to balance an in-year budget.

 

The Member felt it was important that budgets are realistic to prevent overspends. The Chief Officer Resources added  ...  view the full minutes text for item 8.