Agenda item

(a)       That having considered the Revenue Budget Monitoring 2022/23 (month 4) report, the Committee confirms that there are no specific matters to be raised with Cabinet; and

(b)       That having considered the Capital Programme Monitoring 2022/23 (month 4) report, the Committee confirms that there are no specific matters to be raised with Cabinet.

The Strategic Finance Managers (Corporate Finance) presented reports on the 2022/23 month 4 position for the revenue budget monitoring for the Council Fund and Housing Revenue Account (HRA) and the Capital Programme, prior to consideration by Cabinet.

Revenue Budget Monitoring

On the Council Fund, the projected year-end position was an operating deficit of £0.285m (excluding the impact of the pay award which would need to be met from reserves), leaving a year-end contingency reserve balance of £6.911m (before the impact of final pay awards).  An update was given on the impact of Welsh Government (WG) Hardship funding, along with projected variances as detailed in the report including significant movements across portfolios.  The current position on Council Tax income and the impact of pay awards was reported under in-year and emerging risks along with other risks including projected overspends for Out of County Placements and Homelessness which continued to be monitored closely. All planned in-year efficiencies were expected to be achieved in 2022/23.  The current position with unearmarked reserves indicated a projected contingency reserves balance of £6.911m excluding the impact of final pay awards.  The projected position on earmarked reserves would be reported at Month 5.

On the HRA, projected in-year expenditure of £0.188m higher than budget would leave a closing un-earmarked balance of £6.287m, which was above the recommended guidelines on spend.

In expressing concern, the Chairman referred to the additional £2.2m of costs for variances outside the control of the Council.

Councillor Bernie Attridge asked for background on the reasons for three areas of overspend and why these had not formed part of projected budgets: (i) in-house residential care which was “due to staff and running costs”, (ii) overspend on legal costs in Children’s Services due to a rising number of court cases and using external legal professionals and (iii) Out of County Placements which included 40 new placements.  He also asked about the potential risk to the HRA on the loss of income for collecting water rates.

The Corporate Finance Manager explained that variances were inevitable given the wide range of services with significant budgets coupled with changes in demand and inflationary pressures.  He stated that robust budgetary processes were in place including the monthly monitoring cycle which provided detailed information on variances across portfolios and risks associated with budgets.  He went on to refer to the volatility of some services such as Out of County Placements and the need to maintain reserves levels to protect against unforeseen circumstances.

On increased legal costs in Children’s Services, the Chief Officer (Governance) referred to the difficult balance required in budget-setting without over-predicting demand-led services such as safeguarding on which the Council had a statutory duty.

The Chief Executive highlighted the level and quality of data provided in the monitoring reports and the challenges in anticipating volatile service areas where variances could arise.  He gave assurance that such areas were being closely monitored and that the situation at this stage of the financial year was a concern.

At this point, there was a brief adjournment before re-commencing the meeting.

Capital Programme

The revised programme for 2022/23 was £92.133m taking into account all carry forward sums and savings transferred back to the programme.  Changes during the last quarter were mainly due to the introduction of grant funding streams, additional allocations approved in the 2021/22 outturn report and budget re-profiling.  The projected outturn position totalled £90.590m leaving a £1.543m underspend recommended to be carried forward for the completion of schemes in 2023/24 as detailed.  There was one additional allocation identified for the Ty Nyth Children’s Assessment Centre and no savings had been identified during this quarter.  The overall funding position of approved schemes indicated a surplus of £3.126m due to a number of capital receipts received during the first quarter, prior to the realisation of additional capital receipts and/or other funding sources.

The recommendations for both reports were moved and seconded by Councillors Bernie Attridge and Linda Thomas.

RESOLVED:

(a)       That having considered the Revenue Budget Monitoring 2022/23 (month 4) report, the Committee confirms that there are no specific matters to be raised with Cabinet; and

(b)       That having considered the Capital Programme Monitoring 2022/23 (month 4) report, the Committee confirms that there are no specific matters to be raised with Cabinet.