Agenda item

Consideration was given to report of the Chief Officer Resources.

The Chief Officer Resources presented the report which provided details on the:

·        Provisional outturn position at the end of 2020/2021

·        Details of significant adverse variances

·        Provisional outturn for Fees & Charges

·        Progress on the achievement of the Bridging the Gap Projects for 2020/2021

The report formed part of the financial reporting framework to Members.

The Officer went through the report in detail and highlighted the key points contained therein. The overall financial position across all portfolios at 31st March 2021 was a favourable variance of £2.639m (1.7%), against a total revenue budget of £152m.However, the figures

were provisional and subject to external audit.  The outturn was a significant improvement on the forecast financial position at the end of December 2020, at which time the forecast was a favourable variance of £0.6m.

The Table 1 at section 5.1.3 of the report highlighted the provisional outturn across all Portfolios.

The Chief Officer reported that following a review of the year end position, and in support of the Council’s financial resilience, a further transfer to earmarked reserves of £1.2m had been made with the balance of £1.4m transferring to General reserves.

A Member said this was the most favourable financial position he had seen since becoming an elected Member, and thanked his colleagues at Welsh Government for their support during the Covid pandemic.  He said every facet of the budget had been put in place with the support of WG Hardship Funding.  However, he pointed out the support received had highlighted the volatility of the Council, and without that financial support, he said the Council would be in a serious position.

He also questioned the political decisions taken within the Environment Portfolio which showed a significant adverse variance in light of the positive financial position of the Council. 

The Member also questioned the need for a second HWRC, particularly in light of the shortfall in income expected in relation to the sale of recyclate materials.  He said in his opinion, the concerns and pressures within the service should have formed the basis of the decision to open a second HWRC facility.

Another Member referred to the one-off financial support provided by Welsh Government highlighted at section 5.1.8 of the report, and asked whether any unspent monies in relation to social distancing signage would have to be returned to WG.

The Chief Officer Resources said she was unaware of the terms and conditions of the funding relating to social distancing signage.  However, she explained that if the funding was hypothecated, any unspent monies would have to be returned, but if the funding was un-hypothecated it could be retained by the Council and spent elsewhere. 

In response to a question raised by a Member regarding the £500 payment to care workers, the Chief Officer Resources said this payment would also be made to care workers within the private sector operating within Blaenau Gwent.

The Member then referred to section 5.1.30 and questioned the adverse variance within the winter maintenance budget.

The Service Manager Neighbourhood Services explained that part of adverse variance related to additional equipment that was required.  He also pointed out that whilst snowfall during the winter was minimal, it was a cold winter, with the gritting team out sometimes twice a day, which increased standby payments and out of hours.

A Member referred to previous comments in relation to the need for a second HWRC facility, and pointed out that recycling was driven by targets set by WRAP and Welsh Government.  The Council had responded, and to date had not incurred any financial penalties as a result of not achieving these targets. He said residents wanted an additional facility because the site at New Vale lacked capacity to cope with demand at the site, and when fully operational, the second HWRC would have a positive impact on the fly tipping currently being experienced within the Borough.  He said the Council needed to ensure that residents had every opportunity to recycle in order to achieve its targets and prevent any potential fines being imposed.

In response a Member said the Council had to measure what was needed as a resource against what we could afford.  He recalled that when a second HWRC was initially proposed during the previous administration a number of senior Officers were adamant there was no need for a second facility.  He concluded that on the basis of the figures, in his opinion, one HWRC facility was sufficient.

A Member requested that additional information be provided in future reports on the level of WG Hardship Funding that had been received against each budget.

The Chief Officer Resources confirmed that this would be provided in future reports.

In response to a further question, the Chief Officer said 2020 was an unexpected year for everyone, and a pressured year for the Council in terms of delivering services.  She had significant concerns at the beginning of the year around the financial impact of the pandemic, but due to the one-off financial support received from Welsh Government the Council were able to weather the storm, and along with other LA’s, were able to set aside money to hopefully support our financial resilience moving forward, and enable us to deal with any unexpected pressures in short to medium term.  However, the Chief Officer said she had longer term concerns as the UK Government had borrowed significant amounts of money to support its response to the pandemic, and that borrowing would have to be paid back at some point.  As a result, potentially our future settlements from UK Government to Welsh Government may be impacted in the medium to longer term and may not be as positive as predicted, and therefore it was important to have sufficient reserves.

A brief discussion ensued regarding the cost of recyclate materials when the Service Manager Neighbourhood Services explained that costs were driven by market forces and there had been a significant decrease in the value of all materials.  There were still disposal costs associated with the materials which did not reduce in line with sales.

The Committee AGREED to recommend that the report be accepted provided the appropriate challenge to the financial outcomes in the report.