·
To select appropriate items from the Cabinet agenda for pre-decision
scrutiny (cabinet reports enclosed for Scrutiny Members)
·
To select appropriate items from the Cabinet (Finance) Sub Committee
agenda for pre-decision scrutiny (Cabinet Finance Sub - Committee reports
enclosed for Scrutiny Members)
Minutes:
The
committee chose to scrutinise the following Cabinet Board items:
Budget
Update and Monitoring
Members received an
overview of the financial implications of Covid-19 on the Council’s Financial
Resources and 2020/21 Budget, as detailed within the circulated report.
It was highlighted that
there was a mistake on page 4 of the report in which it states ‘and we are
awaiting WG confirmation relating to a further £1’; it was confirmed that the
figure should be amended to £1.8m.
Officers stated that
Welsh Government originally allocated £188.5m for local authorities to recover
costs and loss of income through the Hardship Fund which was mainly to cover
the period up to the end of June. It was noted that the Council had submitted
claims for additional expenditure that was incurred (£4.133m) and were still
waiting for confirmation on the reimbursement for the claim in July. Members
were informed that since writing the report, Welsh Government had agreed to
reimburse £409k free school meal costs and around £207k social services costs;
therefore leaving a balance of around £156k of additional costs that Welsh
Government had said they would not be refunding. It was mentioned that the
majority of the remaining balance was additional ICT hardware costs that the
Council had incurred, in which Welsh Government were only reimbursing 50% of
costs and 25% of communications and media marketing costs.
The Committee noted that
Welsh Government had reimbursed the Council £2.3m worth of lost income relating
to parks, leisure centres, libraries, theatres, school meals, trade waste and
parking; and that the Council had submitted a further request for £1.8m mainly
relating to schools, Hillside, rent income from environment services and income
from capital projects. It was highlighted that clarification was still needed
on how Welsh Government were going to be reviewing the loss of income claims,
however the report assumed that at this stage £400k of the £1.8m would be
reimbursed.
Following this, it was
confirmed that on 17th August 2020, Welsh Government announced an
additional £264m of funding for Local Authorities to further mitigate against
the financial impact of Covid-19 and as part of the announcement, they stated
that £25m would be related to school cleaning. It was noted that as a consequence
of this, the original projected £10m overspend that was reflected in the
analysis of the report, was currently down to £5m projected overspend.
A discussion took place
in relation to the progress of the financial forward planning and lost income
payments. It was stated that there was no guarantee from the UK Treasury and
Government of further consequential payments coming forward, therefore Welsh
Government could not guarantee any further lost income payments; however they
were paying majority of the claims and were efficiently monitoring. It was
mentioned that the Council would need to start looking at their own council tax
setting, in which there had been some additional money for council tax relief
schemes; it was added that the Council would have a better idea in the next few
months of the potential reserves that would need to be taken out in order to
fill the budget gap for this year. Members were informed that Officers would
start to look at next year’s budget over the next 2 months and would be bringing
back considerations for Members in October; it was mentioned that the UK
Government was carrying out spending reviews to try and identify the amount of
resources available for 2021/22 and into subsequent years, which would be a
critical part of future budgets.
In relation to the loss
of income in Hillside, Members asked if Officers had received further
inclination whether support was going to be provided. It was noted that
Hillside had an overspend of £803k; the Council had asked for the first quarter
(£467k) from Welsh Government, additional to the £2m that they had made
available to invest in improving the facilities at Hillside. It was added that
some of that money would have been needed to offset the unavailability of two
rooms whilst they were being upgraded and that some support had been provided
within the £2m due to some of the restrictions from Covid-19 that was causing
the projected overspend. Officers confirmed that Welsh Government had yet to
review this particular issue as yet, but hope that they would do this in the
near future and following this Officers would inform Members as part of the
next budget monitoring report.
Detailed within the
circulated report it stated that Hillside had a block contract with the Youth
Custody Service (YCS) which guaranteed payment for 6 beds. Members asked if YCS
were still paying for these 6 beds, to which Officers confirmed that they were,
and even though not all of them would be used at all times, they were paying
for the guaranteed availability of the beds which had been factored into the
income streams for the year. It was noted that Officers were expecting Welsh
Government to reimburse the money to Hillside and that it was important to
continue to pressure this to happen as the Council doesn’t make a profit or
generate income from Hillside.
Members asked for
Officers to clarify what liability order receipts were, as these were mentioned
in the circulated report. It was confirmed that when someone hasn’t paid
council tax and/or business rates, a liability order could be granted by the
courts to the Council, which adds a fee onto the outstanding bill.
It was noted that some
streams of income had been reintroduced from September such as car parking
charges and pupils school meals, which would be taken into account and further
built into projections through the rest of the year.
In relation to council
tax support, it was highlighted that Welsh Government announced that £2.85m
would be made available to fund the additional number of claims and costs of
council tax support paid out by Councils for the first quarter of this year;
Officers estimated that the value of Neath Port Talbots share would be roughly
£120k, which hadn’t been factored into the report.
A discussion took place
in relation to the council tax support claimants (CTRS) and whether the
assumptions built into the report, where it states increased costs arising from
CTRS of £529k over budget which could increase to £1m plus during the remainder
of 2020/21, included the ending of the furlough scheme and the inevitable
redundancies and unemployment which may be caused as a result of that. Officers
highlighted that the council tax collection and council tax support cost could
increase substantially should furlough result in more job losses when it comes
to an end, however as previously mentioned the Welsh Government would be
reimbursing Councils cross Wales and the exact figure for Neath Port Talbot
Council was still to be confirmed.
Members were informed
that Welsh Government were not funding local decisions, therefore if Neath Port
Talbot decided as a Council to do something that wasn’t being told for all
Councils to do by the Welsh Government then consideration would need to be
taken for the costs, an example of this was the purchasing of face masks.
The Committee thanked
all employees within the Finance Directorate for their continued hard work
during the Covid-19 pandemic.
Following scrutiny, the
committee was supportive of the proposals to be considered by cabinet.