Agenda item

Revenue Budget Monitoring -2020/2021, Forecast Outturn to 31 March 2021 (As at 30 September 2020)

To consider the report of the Chief Officer Resources.

Minutes:

Consideration was given to report of the Chief Officer Resources.

The Chief Officer Resources presented the report which provided the forecast financial outturn position across all Portfolios for 2020/21.  The overall forecast outturn was an adverse variance of £3.402m.  However, this was before the application of Welsh Government Hardship Funding which reduced the forecast adverse variance to £0.248m which was a much improved position when compared to the forecast at June 2020 which indicated an adverse variance of £1.2m (after the application of Hardship Funding and Furlough Funding). 

 

Welsh Government’s announcement of £260m financial support for LA’s to the end of March 2021 meant the Council was able to change some of the assumptions used to forecast the outturn position.  As a result, the assumptions in the report changed from the previous quarter, and it was now assumed that where we are in line with Welsh Government guidelines, additional Covid related expenditure and loss of income would be funded by Welsh Government. 

 

The table at section 5.1.2. highlighted the financial position across all portfolios, and identified additional Covid related costs to be £3.2m, however, £3.15m of Harding Funding was estimated to be received.  The Council had also claimed Furlough Funding from the National scheme and £183k was built into the forecast.  Welsh Government had also considered claims from LA’s for loss of income for the first 2 Quarters of the year, and the Council had received £1.1m relating to those claims, of which £744k was been built into the forecast.  The Officer said when all this was taken into account the net impact on the Council’s revenue budget was a forecast adverse various of £0.248m.

 

The Chief Officer then went through the Portfolio Analysis highlighted at section 5.1.7. of the report and referred to the fact that Corporate Services was now forecasting a favourable variance of £87k compared to the adverse variance at quarter 1.  This was due to WG loss of income funding being received, and the Chief Officer reported that correspondence had recently been received from WG indicating that loss of income funding would be made available to the Council for quarter 2.  There had also been an increase in the Corporate Services departmental budget of £53k.

 

A Member referred to the money spent on consultancy fees across all Portfolios and said this should be detailed within the report. He also requested an update on the position of the grounds maintenance budget within the Environment Portfolio

 

In response the Chief Officer explained that the expenditure for consultants was reported separately and included within each Portfolio’s expenditure throughout the year.  An analysis of this expenditure, across the board, had been requested by a Member at the previous Council meeting and this was currently being generated for circulation to Members.

 

In relation to grounds maintenance, the Chief Officer said this was detailed at Appendix 2e of the report.  The budget for grounds maintenance was £942,857k, and was currently forecasting an adverse variance of £17k which was a much improved position when compared to quarter 1 where it was forecasting an adverse variance of £83k.

 

A Member commended the report, and said he would like to note his appreciation of the support received from Welsh Government via its Hardship Funding, during the Covid pandemic.

 

Another Member referred to Adult Services and said it was likely that specialist assistance would be required for our vulnerable adults following the Covid pandemic, and asked whether any additional funding had been considered.

 

The Chief Officer said no specific funding had been identified.  However, whilst some services had been suspended as a result of Covid, many services were continued even though they were delivered differently to ensure our customers have the support they need.

 

The Managing Director undertook to discuss this matter with the Corporate Director of Social Services.  However, if this was an area identified as a cost pressure moving forward it would be considered as part of the budget planning process, and a special Council meeting would be held in due course to consider the revised MTFS.

 

Another Member referred to Appendix 1, and expressed concern regarding the level of legal costs within Social Services.

 

In response the Chair of the Social Services Scrutiny Committee confirmed that work was being undertaken that would hopefully involve other LA’s to share the costs.  It was specialised work, and unfortunately at the moment the Council had to bear these costs.

 

The Member also referred to Appendix 2a and enquired regarding the increase in the Festival Park budget.  The Chief Officer explained that the budget was in relation to the Council’s SLA with the current owners of Festival Park to maintain grounds and the woodland areas, and this small adverse variance was expected for this year.

 

The Member also expressed concern regarding the impact of the Covid pandemic on NNDR.

 

In response the Chief Officer explained that the Council was the collection agent for NNDR, so the main impact would be felt by Welsh Government.

 

The Member then referred to Appendix 3, namely school catering/school cleaning and asked why this was forecasting a favourable variance due to the significant additional cleaning that had been undertaken during the pandemic.

 

The Chief Officer explained that any additional costs incurred as a result of Covid could be claimed from the Hardship Fund.

 

Another Member referred to section 5.1.26 of the report and asked whether stopping communal waste collection points would increase recycling rates and reduce fly tipping, and he also questioned the green waste recycling costs.

 

The Corporate Director Regeneration & Community Services confirmed all the issues would be considered as part of the Council’s waste and recycling strategy.  In relation to the green waste recycling costs, the Corporate Director explained that the contractor closed for business which meant that a, more costly, contingency arrangement was put in place in the short term, however, a new contract was now in place, and the increased tonnage collected during the first lockdown was partly offset by the WG Hardship Fund. 

 

The Member then referred to Aneurin Leisure Trust and asked whether the funding they received from the Council would be reduced in light of their staff being paid 80% furlough funding, and also if the £42k ring fenced for library books would also be withdrawn as libraries had been closed during the pandemic.

 

The Chief Officer explained that furlough funding was from National Government, and whilst the Leisure Trust had benefitted from this funding to cover some staffing costs, the Council had also received WG Hardship Funding for quarter 1 for loss of income in relation to the Leisure Trust.  However, this did not fully cover the costs, and as a result the Council are continuing to pay the management fee as agreed.  She confirmed that the situation would be monitored to ensure an equitable share of resources between the Council and the Leisure Trust.  In terms of the funding for library books this had already been paid to the Leisure Trust as part of the management fee.

 

The Corporate Director of Education explained that whilst BG Libraries had limited opening over the year due to Covid, Welsh Government would still be assessing our performance against the Welsh Public Library Standards.  As a result, that allocation of funding would be used to enable other means of accessing books, i.e. digitally, and had been earmarked for those purposes.

 

A Member referred to page 37, cross cutting budget, and asked what savings had been made on printing costs during the pandemic, and the Chief Officer Resources undertook to provide an analysis.

 

Another Member then referred to the adverse variance within the Nursery Units budget, and asked how much of this related to occupancy, and also whether the Council was paying NNDR on those units requiring refurbishment, and whether the bid for capital funding for Roseheyworth Industrial Estate had been submitted.

 

The Corporate Director Regeneration & Community Services confirmed that the adverse variance was in relation to occupiers and not vacant units.  The adverse variance had reduced as a result of WG loss of income funding received in relation to the business rates break offered in April.  He confirmed that the majority of occupiers had now entered into repayment plans, and when the Council start to receive this income a more accurate budget figure would be provided.

 

He said the Covid pandemic had hit businesses extremely hard, but the Council was focussed on securing funding to ensure that those businesses have the support they need.  In terms of the number of vacancies, he confirmed that this figure had not varied particularly, and units were still being let.  In relation to Roseheyworth Industrial Estate, funding had been secured to bring units back into use and all four units had now been let. 

 

In terms of NNDR he confirmed that work was ongoing as part of ‘Bridging the Gap’ activity to mitigate NNDR and manage our industrial estates.

 

The Committee AGEED to recommend that the report be accepted and Members provide appropriate challenge to the financial outcomes in the report. (Option 1)

 

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