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There is no summary of this meeting yet. One is written once the council publishes the minutes. The agenda and papers are below.
Apologies for absence were received from: • Cabinet Members: • Councillor Jake Berriman (Leader) • Councillor Matthew Dorrance (Deputy Leader) (Both were attending to other Council business) • Officers: • Marianne Evans • Debby Jones • Andy Thompson • Observer: • Lynne Hamilton
As the first meeting of the Finance Panel since the Council's Annual General Meeting, the election of the Chair was required. Only one nomination had been received for the position of Chair: Councillor Aled Davies. · Proposer: Councillor Peter Lewington · Seconder: Councillor Arwel Jones No other nominations were put forward. A vote was taken, and Councillor Aled Davies was unanimously re-elected as Chair of the Finance Panel for the ensuing year.
The Panel proceeded to elect a Vice Chair. One nomination had been received for Councillor Pete Lewington to continue in the role. • Proposer: Councillor Chris Walsh • Seconder: Councillor Aled Davies No other nominations were submitted. A vote was held, and Councillor Pete Lewington was unanimously re-elected as Vice Chair of the Finance Panel for the ensuing year.
There were no Declarations of Interest from Members relating to items to be considered on the agenda.
The Panel reviewed the minutes of the previous meeting held on 18 February. A query had been raised by Councillor David Thomas regarding the accuracy of a statement. However, following a review of the meeting recording by the scrutiny officer, it was confirmed that the statement in question had been made by an officer, not Councillor Thomas. As a result, the Panel agreed to retain the original wording of the minutes. There were no further comments or objections, and the minutes were accepted as an accurate record. The Chair noted that action points listed on pages 5 and 6 of the previous minutes had either been addressed or were in progress.
Background The Portfolio Holder gave a brief synopsis of the report. Director of Corporate Services provided a brief explanation regarding the delay in presenting the Outturn Revenue 2024–25 report to the relevant scrutiny committees. She stated that the delay had been due to the volume of papers being processed and the scheduling of meetings, particularly the need to align with Cabinet and CLT availability. She acknowledged that the outturn had been expected earlier, but the timing of meetings and the availability of portfolio holders had caused a knock-on effect. Points raised by the Panel: Responses received from Officers or Cabinet Members. Scrutiny Process and Governance • Members questioned why the outturn figures for 2024–25 had not been presented to the relevant scrutiny committees in a timely manner. • They expressed concern over repeated delays and last-minute changes to scrutiny meetings, describing the process as unprofessional. • They asked whether the scrutiny process could be improved to ensure timely and transparent oversight. Officers acknowledged the concerns raised about the delay in presenting the outturn figures to the relevant scrutiny committees. Director of Corporate Services explained that the delay had been due to scheduling constraints within Cabinet and CLT, as well as the volume of papers being processed. Officer confirmed that although some scrutiny committees had not yet received the report, it was scheduled for discussion in upcoming meetings. The criticism levied at the process as was noted, and Cabinet Members were asked to reflect on the need for more timely and structured reporting. Savings Delivery and Budget Management • Members asked what mitigations had been used to address high inflation and pay awards, and how effective the risk budget had been in controlling the medium-term financial position. • They queried what strategies were in place to ensure savings targets were met, particularly in light of £2.7 million in unachieved savings. • They questioned how much of the unachieved savings had been rolled forward into the next financial year and whether this practice was sustainable. • They asked whether too much focus was placed on identifying savings rather than simply staying within budget. • They requested a breakdown of savings and overspends over the past five years to better understand the council’s financial model. • They sought assurance that rolled-forward savings would be achieved in the current year and not continue to accumulate. Portfolio Holder for Finance acknowledged that savings delivery in 2024–25 had been disappointing compared to previous years. Of the £12.9 million in planned savings, only £8.9 million had been delivered, with a further £1.2 million achieved through temporary mitigations. The shortfall was attributed to increased costs in children’s placements, inflationary pressures, and higher borrowing costs. It was explained that the £3 million risk budget had been used to mitigate overspends across services and that a pay reserve had been maintained to cover unexpected pay awards. In response to concerns about the sustainability of rolling forward unachieved savings, The Portfolio Holder confirmed that some savings had indeed been carried over from previous years. However, emphasised that the Council had delivered over £100 million in savings over the past decade, which had been essential to maintaining a balanced base budget. Officers added that without these savings, the Council would have faced significant overspends or would have needed to raise council tax substantially. The Portfolio Holder agreed to provide this information and reiterated that savings were necessary to close the budget gap created by rising service pressures. Children’s Services and Placement Costs • Members asked for clarification on the increase in placement costs and the impact on the budget. • They questioned the delay in implementing the Special Guardianship Orders (SGO) policy and its financial implications. • They raised concerns about the mothballing of residential homes and whether this represented a false economy. • They asked for assurance that the closer-to-home strategy and other mitigations would reduce reliance on high-cost placements. Portfolio Holder for Future Generations, responded in detail to questions about the overspend and explained that placement costs had risen from £7.5 million to £9.8 million within the year due to a national shortage of residential provision. The delay in implementing the Special Guardianship Orders (SGO) policy and the unavailability of the Brecon Springboard property had also contributed to the shortfall in savings. The Head of Service outlined several mitigations, including a freeze on non-essential spending and vacancies, a reduction in agency social worker costs, and a strategy to return children to placements closer to home. It was noted that the service was prioritising the reopening of two mothballed residential homes and expanding early intervention and prevention services. It was confirmed that some savings had been rolled forward from previous years but expressed confidence that they would be achieved in 2025–26. Education and School Deficits • Members noted that the table on school deficits in the finance panel papers was less informative than that provided to the education scrutiny committee and asked why it had not been included. • They asked for clarification on the £1 million school improvement contingency and how it would be used in response to Estyn recommendations. • They questioned the sustainability of the current school estate and supported the formation of a joint working group to review the education system’s financial viability. Portfolio Holder for a Learning Powys addressed concerns about school deficits and the lack of detailed reporting in the finance panel papers. It was acknowledged that the cumulative deficit across schools exceeded £7 million and agreed that this posed a risk to the Council’s general reserves. It was also explained that some efficiency savings had not been met due to changes in the pupil referral unit strategy and delays in renegotiating the Freedom Leisure contract. Assurance was given to the Panel that mitigation measures had been put in place and that further updates would be provided to the Education Scrutiny Committee. The Director of Education elaborated on the £1 million school improvement contingency listed in Appendix D. It was stated that the fund was intended to support schools in statutory Estyn categories by providing additional leadership capacity, professional learning, and targeted interventions. The funding would also be used to respond to recommendations from the Accelerated Improvement Board Highways, Transport and Recycling (HTR) • Members asked whether unachieved savings in HTR had been written out or rolled forward and sought assurance on their future delivery. • They questioned the impact of extended bus routes on the budget and how the resulting overspend would be clawed back. • They asked for clarification on the £604,000 in aborted capital projects and whether these were permanently abandoned or temporarily paused Head of Service, responded to questions about unachieved savings in the HTR portfolio. Explained that delays in implementing the car park review and winter maintenance changes had contributed to the shortfall. However, expressed confidence that with governance decisions now in place and additional capital funding secured, the savings would be delivered in the current year. It was confirmed that £323,000 in savings had been written out and that other items had been rolled forward. The Portfolio Holder for a Greener Powys acknowledged the additional pressure placed on the service by the extension of bus routes following a recent Council decision. However, stated that while the financial implications were still being assessed, the service was monitoring the situation closely and would report back to the relevant scrutiny committee. . Capital Programme and Project Delivery • Members questioned the large variance between the original and revised capital budgets and whether this was due to reprofiling or delays. • They asked whether delays in capital projects were a deliberate tactic to reduce borrowing costs and ease pressure on the revenue budget. • They raised concerns about the long-standing delays in delivering major capital projects such as Bro Hyddgen and the cost implications of such delays. • They requested a breakdown of the £604,000 in aborted capital projects, including reasons for abandonment and project initiation dates. In response to questions about the £604,000 in aborted capital projects, Head of Service and the Capital Accountant explained that these costs related to preparatory work on schemes that had not progressed due to planning delays, lack of grant funding, or policy changes. They confirmed that such projects were reviewed annually and written off when there was no viable path forward. The Portfolio Holder for a Greener Powys agreed to provide a breakdown of the projects and reasons for abandonment. General Financial Oversight • Members asked for clarification on the Housing Revenue Account (HRA) overspend and its impact on future housing projects. • They queried the performance of car parking income and whether targets had been met or exceeded. • They asked for the total commitment of reserve requests listed in Appendix D and how these related to the general fund. Officers clarified that the HRA was self-funding and had recorded an underspend of just under £1.6 million in 2024–25. Although the HRA capital budget had been overspent by £855,000, this would be offset by reducing future allocations. Assurance given to the Panel that the impact would be minimal due to the reprofiling of capital budgets. Officers confirmed that off-street parking income had exceeded the target by £17,000. While this was a positive outcome, it represented a small percentage of the overall revenue and was not considered a significant budgetary factor.
A brief outline of the report was provided by the Portfolio Holder for Finance. Points raised by the Panel: Responses received from Officers or Cabinet Members. Capital Programme Delivery and Overspend · Why had the original capital budget for 2024/25 changed so significantly compared to the revised budget. · What caused the £855k overspend in the Housing Revenue Account (HRA) capital budget, and how would this affect future housing projects. · Was the £604k loss from aborted capital projects a result of poor planning, and could the panel receive a breakdown of those projects and reasons for abandonment. · Were the aborted projects permanently cancelled or temporarily paused, and what were the implications for future capital planning. · Had the Council considered the financial impact of delays in capital projects, especially in light of inflation and rising borrowing costs. The capital programme for 2024/25 recorded a total spend of £72.46 million against a revised budget of £75.92 million, achieving 95% delivery. However, the programme required £16.87 million in borrowing, and the net cost of borrowing reached £18.88 million. Of this, £13.55 million was chargeable to the General Fund, resulting in a £2.09 million overspend on the borrowing budget. This overspend was partially offset by £910,000 in interest income from cash surpluses, reducing the net overspend to £1.18 million. Portfolio Holder for Finance clarified that the overspend was not the result of a deliberate strategy to delay capital projects in order to reduce borrowing costs. Instead, the Council had been using internal borrowing and cash surpluses to minimise interest costs where possible. However, this approach was becoming increasingly difficult due to tightening cash balances. The Capital Oversight Board continued to monitor affordability and delivery timelines to ensure that borrowing remained within manageable limits. Capital Reprofiling and Strategic Planning • Why had significant capital schemes been reprofiled into future years and was this due to external factors such as planning delays or grant funding issues. • Did the Council have a strategy to mitigate the cost implications of delayed capital projects, particularly those related to school infrastructure. • How did the Council intend to balance the need for prudent borrowing with the urgency of delivering capital projects on time. The revised capital budget reflected significant reprofiling of projects throughout the financial year. Officers explained that this was necessary due to a range of external factors, including delays in planning approvals, changes in policy, and dependencies on grant funding. For instance, the Montgomery Canal scheme had been extended by a year, and housing development projects had been delayed due to phosphate mitigation requirements and site availability. Officers noted that some housing revenue account schemes had been reprofiled forward but then were subsequently pulled back to better align with realistic delivery timelines. The reprofiling aimed to provide a more accurate picture of capital expenditure throughout the year, rather than allowing large variances to accumulate and be addressed only at year-end. The Portfolio Holder emphasised that the Council did not intentionally delay capital projects to reduce borrowing. Instead, the adjustments were made to reflect operational realities and ensure that capital delivery remained feasible and financially sound. The Capital Oversight Board continued to assess project timelines and funding availability to maintain a balanced and responsive capital programme. Specific Capital Projects and Local Schemes • What was the current status of the Bro Hyddgen school project, and why had it not progressed despite being discussed for over two decades. • Could the panel be provided with an update on the Montgomery Canal scheme and its impact on the capital programme. • What were the reasons behind the delays in school projects such as Sennybridge, Brecon, and Pen-y-Fan, and how would the new modular design approach improve delivery. The Bro Hyddgen school project remained under cost reappraisal to determine the most cost-effective way forward. Officers had not provided a recent update, but it was confirmed that the project was still active. The Portfolio Holder for a more Prosperous Powys expressed frustration at the long delays in delivering such projects, noting that inflation and regulatory burdens had significantly increased costs over time. The need for streamlined planning and delivery processes to avoid further cost escalation was emphasised. Other school projects, such as those in Sennybridge and Pen-y-Fan, had also experienced delays due to planning issues and cost pressures. A new modular design approach was being explored to standardise school builds and accelerate delivery. Officers hoped this would reduce planning risks and improve cost predictability. Financial Risk and Borrowing • What was the total cost of borrowing for the capital programme in 2024/25, and how did it compare to the budgeted amount. • How did the Council plan to manage the increasing cost of borrowing, especially given the reliance on internal borrowing and cash surpluses. • Was there a deliberate strategy to delay capital expenditure to reduce borrowing costs or were delays purely operational. The capital programme had required £16.87 million in borrowing, with the net cost of borrowing amounting to £18.88 million. This figure included £13.55 million chargeable to the General Fund. The overspend on borrowing was mitigated by £910,000 in additional interest income from cash surpluses, reducing the net overspend to £1.18 million. The Portfolio Holder for Finance clarified that there was no deliberate strategy to delay capital projects to reduce borrowing costs. However, the Capital Oversight Board continued to monitor affordability and delivery timelines closely. Internal borrowing had been used where possible to minimise interest costs, although this approach was becoming increasingly difficult due to tightening cash balances. Capital Receipts and Income Generation • How much income had been generated from off-street car parking and did this meet or exceed expectations. • What percentage of the total capital income did the £17k improvement in car parking revenue represent. Officers confirmed that off-street parking income had exceeded expectations by £17,000 during the 2024/25 financial year. While this represented a positive variance, it was acknowledged that the figure was relatively modest in the context of the overall parking income budget, which stood at just under £2 million. The improvement, though small in percentage terms, was still welcomed as a sign of effective income management. The discussion also touched on the broader implications of income generation within the capital framework. Officers reiterated that capital receipts, such as those from asset disposals, continued to play a role in funding the capital programme. A total of £1.86 million in capital receipts had been received during the year, contributing to the financing of schemes and reducing the reliance on borrowing. This approach aligned with the Council’s strategy to maximise the use of internal resources and minimise the cost of external debt. Governance and Transparency • Could the panel receive a detailed breakdown of capital projects that had been written off, including initiation dates and reasons for termination. • Was the write-off of capital projects part of a routine cleansing exercise, and how often was this reviewed. In relation to the £604,000 attributed to aborted capital schemes. Officers explained that these costs related to preparatory work undertaken on projects that had subsequently been halted. Reasons for abandonment included delays in planning approvals, changes in national or local policy, and the withdrawal or non-award of external grant funding. In some cases, schemes had been paused indefinitely due to a lack of viable delivery routes. Finance Officers clarified that these write-offs were part of an annual review process designed to ensure the capital programme remained accurate and compliant with accounting standards. Projects that no longer had a realistic prospect of completion were removed from the capital asset base and the associated costs were written off to revenue. This process was described as a necessary and prudent exercise in financial housekeeping, rather than an indication of mismanagement. In response to requests for greater transparency, the Portfolio Holder or a Greener Powys agreed to provide a breakdown of the specific projects included in the aborted capital costs. This information was to be shared with the Economy, Residents and Communities Scrutiny Committee to ensure appropriate oversight and learning. The Finance Panel welcomed this commitment, noting that such transparency would help build confidence in the Council’s capital governance arrangements.
Items to be added to September’s meeting: · End of Year Transformation Portfolio report. · Public Sector pay awards settlement update. The Panel held a brief period of reflection following the meeting.
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