Agenda item

Consideration was given to report of the Chief Officer Resources.

The Chief Officer Resources presented the report which provided the forecast financial position across all portfolios for the current financial year.  The overall forecast outturn at June 2021 was a favourable variance of £2.494m, after the application of Welsh Government Hardship Funding.

The table at 5.1.2 of the report highlighted the variances across each portfolio and indicated additional expenditure incurred in relation to the Covid pandemic response and recovery.  The forecast included actual and estimated funding from the WG Hardship Fund to be £1.354.  Paragraphs 5.16 and 5.17 detailed the budget virements actioned to realign budgets during the year.   There were a number of adverse variances across the portfolios, and the most significant were detailed in table 2 at section 5.1.12.

The Chief Officer confirmed that Action Plans to address cost pressures had been included in the report at Appendix 3, and paragraph 5.1.14 to 5.1.39 provided a narrative for the main variances across each portfolio.  Paragraph 5.1.41 provided a summary position with fees and charges for the year, and Appendix 2 provided an analysis of income received for the financial year against individual budgets.

Table 3 of the report summarised the expected year end position for the Council’s General Reserves, and based on the current favourable position this was forecast to increase to £10m by the end of this financial year.  The Officer said Members would recall that during the July Joint (Budget) Scrutiny the 2021 draft outturn position on earmarked reserves was £20.7m which included school balances.  Significant elements of those earmarked reserves related to grant funding held in respect of specific projects or services, and was expected to be utilised in delivering the relevant service outcomes during the current and next financial years.

A Member asked what work was being done to mitigate the significant adverse variance within the Environment portfolio to bring it to a balanced position.

The Chief Officer Resources reported that the adverse variance was due to recycling collection, disposal of waste costs and disposal of recycling.

The Corporate Director Regeneration & Community Services explained that over the last 18 months during the Covid pandemic the Council had collected more residual waste resulting in increased disposal costs.  However, he confirmed that the Warden Service, which had been suspended during the Covid pandemic, had now been reintroduced to ensure we get back to pre-pandemic residual waste levels. 

He also reported that the level of recycling collected had increased, particularly cardboard, however, the market price for cardboard had dropped significantly which resulted in less income being received.  He confirmed that a review of the Council’s contracts for disposal of recyclate materials was being undertaken, looking at shorter term contracts to enable the Council to respond to market prices.  He also confirmed that all opportunities to fund the ongoing demand and purchase of recycling receptacles was being explored.

The Corporate Director said there was no budget surplus within the Portfolio, but assured that all aspects were being considered.

The Member said general management of the Environment portfolio budget needed to be considered in terms of the political decision making process.

In response to a question raised by a Member, the Service Manager Neighbourhood Services reported that the costs per property for all recycling receptacles was £64.61.  The cost for receptacles for the 387 new builds currently in development within the Borough was approximately £25k. 

The Member pointed out that £25k for recycling receptacles for new builds was quite a small portion of the overall adverse variance of £138,485 within the recycling collection budget.

A Member sought an explanation on section 5.1.6 of the report, namely the Learning Disabilities Team restructure.

The Corporate Director Social Services explained that a review of the Learning Disabilities service was undertaken which recommended a 0-25 years, and a 25 and over approach.  As a result, the service was restructured and the 0-25 service now sat within Children’s Services and the over 25’s within Adult Services, and the budgets had been changed to reflect the new arrangement.

Another Member referred to the fluctuation in costs of recyclate materials, particularly cardboard, and asked whether this would have balanced out.

In response the Chief Officer Resources said this depended on the value of cardboard moving forward.  She said this was a forecast for the year based on the current price of cardboard.  If the price of cardboard increased the forecast for the year would improve.

A Member sought assurance on the figure detailed for the Transformation Fund, and also asked whether the revenue contribution for agile working included any potential increase to the rental of Anvil Court.

In relation to the Transformation Fund, the Officer confirmed that the forecast of £165k was the agreed committed amount, however, she confirmed that any changes would be reported to Members.  In relation to agile working, the Officer said this figure did not include any potential rental increase, as the forecast was based on the current lease arrangement.  The lease was due for renewal in a few years, so any future rental figure for Anvil Court would not be known until negotiations had concluded.

A Member expressed concern regarding the ongoing demand for new recycling receptacles due to vandalism and theft and asked what was being done to mitigate this moving forward.  She also expressed concern regarding the increase in rental for the Council’s business units, and also the lack of units available for companies wishing to expand. 

In relation to recycling receptacles the Service Manager Neighbourhood Services it was difficult to control people’s behaviour and the Council was limited in what action it could take.  However, Officers had engaged with the youth service to identify hot spot areas and engaged with young people in the community, and a further engagement exercise was intended this year.  He also pointed out that the situation may have been exacerbated last winter as the schools were closed due to Covid.

In relation to the increase in rental of the Council’s business units, the Corporate Director Regeneration & Community Services said the Council took a decision to be a more commercially minded organisation, and part of that decision was the introduction of full care and repair leases for our industrial units, and to charge a market relevant rent.  He pointed out that whilst office and retail rental had decreased over the last year, industrial rentals were strong and had increased.  He assured that the Council was keen to protect businesses and had undertaken a huge effort to move a significant amount of money to help and protect businesses in Blaenau Gwent during the last 18 months.  He pointed out that occupancy was up at 90% and business growth was doing well.

A Member referred to the adverse variance in the Council Tax Reduction Scheme and asked whether this would be off-set by money from Welsh Government.

In response the Chief Officer Resources explained that CTRS additional costs did not form part of the Hardship Fund, however, Welsh Government have indicated that this would be reviewed later in the year. 

Another Member expressed concern regarding the lack of detail in the appendices.  He also referred to the Council’s healthy level of reserves and said some of this money should be used to set more realistic budgets moving forward, particularly within the Environment Portfolio.

In response to a question raised by a Member regarding the contingency – pay award, the Chief Officer Resources reported that a contingency of 2% had been estimated, however, this had not been formally agreed.  The latest offer currently being considered by the Unions was 1.75%.

The Member then referred to section 5.1.29 of the report, namely legal fees within Children’s Services and the Corporate Director of Social Services reported that a collaborative approach with a neighbouring LA was currently being discussed.

Another Member agreed with previous comments regarding the lack of information, particularly information on the Council’s reserves, and asked that the report on the forecast general and earmarked reserves scheduled to be submitted to the Joint Scrutiny Committee in November include information from Quarter 4 of last year.

The Chief Officer Resources confirmed that the normal General Reserves report would be submitted to the next meeting of the Committee and include information from Quarter 2 onwards. 

Another Member referred to Appendix 1c and asked whether the £205k paid to Awen Trust meant a reduction in the money paid to Aneurin Leisure Trust.

The Chief Officer Resources confirmed that responsibility for managing the Metropol had transferred to Awen Leisure.  As a result, there had been a virement of budget between the Trusts.

A Member requested a breakdown on the income generated from recyclate materials, and the Service Manager Neighbourhood Services undertook to provide this information.

The Committee AGREED to recommend that the report be accepted and Members noted the virements detailed in paragraphs 5.1.4 to and 5.1.7.