Agenda item

[To provide the Council’s outturn position for 2021-2022 compared with approved budgets and targets and performance update against the Relighting Our City priorities]

The Director of Finance confirmed that the Outturn Report was presented to Cabinet in June, it brought together the performance and financial position for the Council until the end of March.  The Council had strengthened links last year between performance and budget to ensure they were robustly monitoring delivery of Council priorities under pinned by the budget. This was the last report before the Relight our Council Performance and the Our Council Plan Performance framework that had started earlier in the year. The report revealed that 18 out of 29 indicators showed an improvement, a further 10 indicators was showing similar performance and one indicator saw a decrease in performance during the last 12 months.

The Director of Finance stated that the report noted areas where the Council needed to invest to improve performance, such as the £3 million that was put into Wolves at Work to help youth employment in the City. The appendix to the report had considerable detail regarding the budget. Some areas saw improved financial positions at the end of the year and other areas where there were merging pressures. Overall there was an underspend of approximately £2 million and they had been able to protect a lot of the Council reserves as well as part of the Outturn position.  It was however still subject to the external audit which had started in the previous week and these numbers would be validated as part of that process. The level of reserve had been reviewed as part of the of the year end process and would go through the Scrutiny process, as normal, through the Resources and Equalities Scrutiny Panel. Council tax and business rates were better than they had forecasted last year, although collection rates were still below pre-pandemic levels. They were working to understand what this meant for the income during the year and what it might mean for future years.

The Director of Finance commented that they were mindful of the high cost of living which could affect residents’ ability to pay Council tax and the impact of inflation on businesses. The Housing Revenue account had seen a reduction in the level of rent collected last year. They had seen a reduction in expenditure and so overall the revenue account had still come in within budget. The general fund continued to be monitored throughout the year and would refresh the long-term monitoring planning. The schools’ budget was managed by them, but the work of the Council was to make sure that their budgets were being managed well for the education of the children in the City.  They used the financial and performance data from last year to inform in year forecasting to understand what it might mean and how the budgets were linked to the delivery of performance.

An update on the in-year monitoring would be taken to Cabinet which would be the quarter one position, with further reports going through in the Autumn.  When looking at last year and in year there were risks and uncertainty. The level of Government funding for next year in particular, the changes in adult social care, the fair cost of care in child reform, high levels of inflation and the cost of living.

The Vice Chair asked a question about the reserves. The general fund remained at £13.7 million, approximately 5% of this year’s net budget. They asked if they envisaged having to use any of those general funds to meet the budget.  He asked for the total figure of the earmarked reserves.  The pressures mentioned on parking services as it related to income levels, had not returned to pre-pandemic levels. There were no variants in the appendix and the Vice Chair asked how this adds up? It was a concern to see that the restrictions were lifted in 2021 – 2022 but the income was still below pre-pandemic levels. Another point under the communications and external relations budget, is city events. There was a 50% overspend on city events, which equated to £221,000 extra into the budget, comments stated it was due to establishing the new events in the city.  At Scrutiny Board last year the Vice Chair had asked about City events and for a breakdown of the costs involved. The Scrutiny Board wanted to see a breakdown of costs for each event.

The Director of Finance responded to each question starting with the general fund reserves at 5% which was best practice. This would continue to be reviewed as part of the budgeting around costs. They did not intend or anticipate having to use the reserves during the year or next year, but there was a lot of risks and uncertainty.  In Parking services they did saw about a £1 million continued reduction in income.  It had been funded by the COVID grants which was why you couldn’t see the variants in the appendix. They had seen some improvements since, but they did not think they were back to pre-pandemic levels.  They were monitoring it carefully to consider what was a reasonable budget or income level for next year’s budget. They could bring forward the financial information on the breakdown of events.

The Chief Accountant remarked that earmarked reserves were at £56 million with a further £56 million held with those that held the criteria for legal reasons or accounting treatments.  For example, reserves were held because of conditions held on grants or licencing which meant you could only spend on specific activity.

A Board Member asked about the 25% reduction in rough sleepers in the year. They questioned if some of the rough sleepers slipped back into sleeping rough and asked about the challenges to keep them housed

The Director of Finance stated she could look into the matter and report back on the question.  There were financial implications, helping rough sleepers’ did take up significant financial resources. The Deputy Leader added that the Council policy during the pandemic was to house everyone and to have no one on the streets, which continued with the associated costs.  Temporary housing would be a priority as soon as Government resources were allocated.  The Director of Strategy suggested that an update on rough sleepers could be taken to the Residents, Housing and Communities Scrutiny Panel.

A Board Member mentioned the high unemployment detailed in the report that Wolverhampton had suffered for 30 years. They asked when they could see further monitoring reports on the unemployment figures. Wolves at Work and the Black Country Impact were receiving Government money.  They asked if there would be a report on how the money was being spent and its impact.  In the general fund the adult services budget was extremely high again with considerable amounts of Government money coming in.  Many County areas were finding that the adult care budget could be a concern to them.  They asked if there was any concern about the adult social care budget at Wolverhampton and how well it was being monitored. 

The Deputy Leader stated that the performance of Wolves at Work should be scrutinised. The Council were going above and beyond the statutory requirement by providing a career service. They were active in the communities matching jobs to citizens.  Even in the most affluent areas the unemployment rate was higher than the national average.  A report could come before the appropriate Scrutiny Panel.  It should be celebrated that any job taken by a citizen of Wolverhampton contributed to the Wolverhampton Pound, which made it circular.  Adult Care Services was not just a problem for Wolverhampton.  Every Local Authority across the country, where health spending did not match social care, was a major concern.  It could only be resolved by legislation from Government.  He said it could be possible to get additional funding from the Government but even that would not necessarily be enough.   Wolverhampton was working with partners and the DWP to get the best jobs for Wolverhampton.

The Director of Finance responded regarding the size of the budget and the risks associated with adult social care.  The Council had built in over £9 million of growth into the budget to recognise the demand and the increase in cost.   The budget was now £81 million in the current financial year which was monitored very carefully.  The Council had a specific reserve to manage adult social care pressures and demands. The Fair Cost of Care and charging reforms came in next year.  They were working with providers to work out what Fair Cost for Care might mean and working with other Local Authorities to inform the budget requirements going forward.  They needed to understand to what extent the money set aside by Government would go to the fund.  They knew that they had an envelope and the National Insurance increases that had been introduced went towards the fund. They needed to establish whether there was sufficient funding. It had been flagged as a specific risk in the most recent budget report.

A Board Member highlighted a section of the report detailing school budgets. There were 5 schools that had a balance of over 50% of their income for around 5 years and the Local Authority could be open to a challenge from the Department for Education. They asked what the Council did to encourage the schools to utilise the rest of their budget.  As there was a table for schools with deficit balances, they asked if there was a table for schools that had got surpluses as well.

The Director of Finance stated that it was very important that schools managed their budgets well, that they did not get into a deficit position or hold onto money they could be spending on children in the City.  Officers monitored the position for each school to see the whole picture for the school, as often what was happening with their finances was not always indicative of what was going on in schools. They needed to look at school performance alongside the funding.  There were mechanisms for the Council to work with schools who had a deficit position who had to provide a plan.  Schools in surplus were monitored as well, they could keep a reasonable amount of the surplus to manage risks. The Schools forum was made up of representatives from different types of schools as well as colleagues from the Council attending meetings to support. There was a Board set up that could call in schools with surpluses that they thought were unreasonable and to demonstrate if they had got specific risks they were managing or plans on how they intended to use the surplus. This was particularly important if it had been held onto for multiple years.  If they were not satisfied as a collective, they had a mechanism to call the money back and that had been done in previous years, to put the money back into the school improvement budget.  There was not a balance table for surpluses but this information could be added moving forward.

The Deputy Leader stated how positive Scrutiny was and thanked the Officers who supported him. The Chair and Board Members thanked the Officers for their report.