To submit
the report of the Senior Finance Manager.
Minutes:
The Cabinet Member noted that the report had been submitted to the Cabinet on 21 May 2019. He thanked
Councillor Peredur Jenkins, the former Cabinet Member, for his work and
commitment to secure the Council's financial situation at a difficult
time. He emphasised that the Cabinet
Members were aware of their responsibilities to keep to the budget. He noted
that the overspending on Children's Services and in the school transport field
could not continue.
The report was submitted by
the Senior Finance Manager, she set the context and elaborated on the
content of the report. She noted that there had been effective financial
control in general, in light of the requirements to realise savings.
Attention was drawn to the Cabinet's decision:
1.1
To
note the final financial position of the Council’s departments for 2018/19.
1.2 To approve the amounts to be carried forward (the
“Revised Over/ (Under) Spend” column of the summary in Appendix 1), namely -
DEPARTMENT |
£’000 |
Adults, Health and Well-being |
15 |
Children and Families |
100 |
Education |
100 |
Economy and Community |
28 |
Highways and Municipal |
100 |
Environment |
(100) |
Gwynedd Consultancy |
(59) |
Corporate Management Team and Legal |
(76) |
Finance |
(59) |
Corporate Support |
(61) |
1.3
To
approve the following recommendations and financial transfers (as outlined in
Appendix 2) -
·
The Children
and Families Department to receive a one-off partial financial assistance of
£1,544k to restrict the level of overspend that will be carried over by the
department, to support them to move on to face the challenges of 2019/20.
·
The Education
Department to receive one-off partial financial assistance of £16k to limit the overspend that will be carried forward by the department
to £100k.
·
Compensate the Economy and Community Department £157k, the sum of the overspend due to the slippage of establishing ‘Cwmni Byw’n Iach’
to run the leisure centres, which limits the overspend that will be carried
forward by the department to £28k.
·
The Highways and Municipal Department to receive a one-off partial
financial assistance of £518k, which limits the overspend
that will be carried forward by the Department to £100k, to support them to
face the challenges of 2019/20.
·
In accordance
with the financial regulations it is recommended that the usual practice is
adhered to in order to allow the Environment Department to keep (£100k) of
their underspend, and to move (£392k) which is the sum above (£100k), to be
used to support the departments that have overspent in 2018/19.
·
On Corporate
budgets, transfer:
- (£19k) related to the
Council Tax Premium to a specific reserve to be considered for the Housing
Strategy.
- (£551k) relating to capital costs
to a capital programme fund.
- (£738k) on maintenance to a
maintenance reserve.
·
Use (£1,843k) of the net
underspend on Corporate budgets to assist the
departments that have overspent in 2018/19.
·
The remainder
of the Corporate underspend (£173k) to the Council’s general balances.
1.4
To approve the virements from the specific reserves and provisions as
outlined in Appendix 3 following a review of reserves and provisions, namely:
·
Harvest (£3.931m) from
reserves and (£69k) from provisions.
·
Assign £3m to the
transformation fund for the Council Plan.
·
Transfer £1m to the
Council’s General Balances.
·
Assign for a one-year
period, £262k from the Supporting the Financial Strategy Reserve to bridge the
funding source relating to liabilities of the Pension Fund."
She noted that the Finance
Department had produced the 2018/19 statutory financial statements before 31
May and that the accounts were being audited by the External Auditors. She confirmed that the accounts would be submitted to the Committee on 29 July, following
the audit. She elaborated that the whole process of closing the accounts,
producing the statement and the external audit would be
completed by the end of July, rather than at the end of September as in
previous years.
Members were given
an opportunity to ask questions and make observations. During the discussion,
the following main points were highlighted:-
·
That
the overspend of the Children and Supporting Families
Department was equivalent to approximately 15% of the Department's budget. The
Department was being praised for its work and other departments could also do praiseworthy work if they also overspent. A
similar spending situation was anticipated for the Council in 2019/20, although
the overspend was being addressed. In relation to Storiel's financial situation, had the situation worsened
since the Council had taken control of the café after the private provider
ceased management?
·
Was
the budget realistic, considering that some fields overspent annually?
·
That
there was a need to be firm with the services that were overspending, although
the overspending derived from sensitive matters, the situation was unfair on
those who provided within budget. Overspending needed to be
stopped, if possible.
·
That circumstances outside the Council's
control affected the financial performance of Departments with the situation
being a reflection on the community. That it was a difficult
situation that would get worse as Welsh Government and the UK Government
did not give Local Government more money.
·
That
it was important to consider whether the budget was suitable, and assess the
Council's position in comparison with other councils in relation to the overspend.
·
That
there was a need to look at the reasons for the overspend
and consider whether the overspend was necessary and responded to statutory
requirements.
·
In
the context of out-of-county placements, was the Children and Supporting
Families Department considering providing a facility in Gwynedd?
A response was given
to the questions and observations as follows:-
·
That
the shortcoming in the financial situation of Storiel
derived after the private provider ceased management of the Café and the
Council internalising its management. The shortcoming was as
a result of additional staffing costs.
·
That
the financial situation of the Children and Supporting Families Department was
not unique to Gwynedd and that the situation was being
addressed and the WLGA were placing pressure on the UK Government to
fund social care appropriately. The UK Government had not commenced its
comprehensive spending review due to the focus on Brexit,
and as a result it is expected to be challenging to
fund services by 2020/21. The Department's budget had been set for 2019/20 by
considering trends, with a substantial increase in child placements, and an
increase in severe needs. Attention was given to the
financial situation of the Children and Supporting Families Department at the
Cabinet meeting on 21 May. It was anticipated that the
Department would overspend in 2019/20, and a reserve budget had been provided
within the Council's budget for any situations that could arise.
·
It
was anticipated that the departments that underspent
would continue to underspend in 2019/20 with other departments overspending in
response to emergencies. It was difficult to have a balanced budget due to the
spending requirements.
·
That
the North Wales Councils' Directors of Social Services had a project in the
pipeline in terms of placements; however, not much progress had
been made.
·
That
the budget reflected the demand for services at a point in time, with the
reserve budget being available to use during the 2019/20 financial year.
RESOLVED to accept
the report and note the situation and relevant risks in the context of the
budgets of the Council and its departments.
Supporting documents: