Issue - meetings

Consideration was given to report of the Chief Officer Resources.

The Chief Officer Resources presented the report which provided the Reserves outturn position for 2019/2020 as at Quarter 4 (31st March 2020).  Section 6 of the report provided an overall summary of the financial position in relation to the remaining balances in general and earmarked reserves at 31st March, 2020.

The Officer then referred Members to table 1 at Section 6.1.3 which showed the outturn position for the general reserve at year-end 2019/2020 to be an increase of £0.454m, to £6.348m. This balance represented 4.69% of net revenue expenditure, £0.934m above the 4% target level of £5.414m.  As a result of the positive provisional settlement, the Council approved an increase to Reserves in excess of £1.5m for 2020/2021 when setting the 2020/2021 Budget, to support medium term financial planning and strengthen the Council’s financial resilience

The Officer concluded that in in comparison to all other Welsh Authorities, at 31st March, 2018 Blaenau Gwent had the lowest level of general and earmarked reserves expressed as a percentage of Gross Revenue Expenditure. Comparative information drawn from audited statutory accounts indicated that this position had improved to the end of 2018/2019.  However, in order to meet the Welsh average, general and earmarked reserves would need to be increased significantly.

Appendix 2 Strategic Business Reviews

A Member asked why the procurement of specialist consultancy fees to support the Strategic Business Review had come out of earmarked reserves and not the Transformation Budget.

In response the Chief Officer Resources explained that the Transformation Budget was not established until the 2020/21 financial year, and these costs were incurred during the 2019/20 financial year.

The Committee AGREED to recommend that the report be accepted and Members considered the use of general and earmarked reserves for 2019/20; and

·        Noted the draft increase of the General Reserve in 2019/2020 to £6.348m, being 4.69% of net revenue expenditure (above the 4% target level);

·        Considered the impact the £0.454m favourable variance for 2019/2020 would have on the General Reserve target; and

·        Continue to challenge budget overspends and implement appropriate service Action Plans, where required. (Option1).

Maintenance of general 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.