Agenda item

Consideration was given to the report of the Chief Officer Resources.

The Chief Officer Resources spoke to the report which detailed information in relation to the draft outturn reserves position for 2020/2021. It was noted that the overall level of both general & specific/earmarked reserves had increased during the year from £14.7m to £28.6m, an increase of £13.9m and the Chief Officer noted the factors which had contributed to the increase.

The Chief Officer Resources advised that the position of reserves provided a buffer to deal with unexpected future issues. The significant elements of the earmarked sums related to grant funding held in respect of specific projects or services that would be utilised in delivering the relevant service outcomes. The Chief Officer anticipated that in future years it was probable that there would be restrictions on public spending in order to mitigate the extraordinary levels of borrowing incurred by Central Government in dealing with Covid-19. The Chief Officer felt that it was prudent to retain the appropriate levels of earmarked and general reserves to assist with such a funding situation that potentially could be similar to that experienced during the last decade during the years of austerity.

The Chief Officer Resources reported that the Joint Scrutiny Committee understood the need to maintain good prudence going forward in respect of reserves to ensure good financial resilience of the Council.

The Leader advised that there was regular monitoring of reserves by respective portfolio holders and collectively by the Executive. The monitoring of reserves had been enhanced in the last few years which had strengthened the financial resilience of the Council. The level of reserves had not been nowhere near where they should be and although current levels are more favourable further work was needed to ensure the Authority was in a better position for the future. The Leader concurred that at some point in time the monies distributed to Welsh Government and other governments from Central Government would need to be addressed, however Leader had hoped that it would not be as severe as austerity years and the responsible politicians must do all they can to ensure that going forward the Authority was prepared to cater for future budgets.

RESOLVED that the report be accepted and

a)   considered the use of general and earmarked reserves during 2020/2021;

b)   the significant increase in general and earmarked reserves as a result of the exceptional circumstances in the 2020/2021 financial year be noted;

c)   the draft outturn position of the General Reserve at £7.820m represents 5.78% of net revenue expenditure, above the 4% target level be noted;

d)   the need for ongoing prudent financial management given the potential for future public spending restrictions required to fund the impact of Covid-19 be considered; and

e)   the continued challenge to budget overspends was given and implement appropriate service Action Plans, where required.

f)     The maintenance of usable reserves at an adequate level was crucial to the Council being able to meet future liabilities arising from risks for which specific provision has not been made.