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Apologies for absence were received from County Councillor J Pugh (Panel Member) Cabinet Members, County Councillors J Berriman, M Dorrance and G Preston. Officers: James Chappelle, Diane Reynolds, Matthew Perry, Nina Davies, Richard Jones, Ellen Sullivan, John Forsey, Paul Bradshaw.
Resolved; that Cllr Aled Davies be elected Chair of the Finance Panel for the ensuing year. The nomination was proposed by Cllr Peter Lewington and seconded by Cllr Arwel Jones. The appointment was agreed by the Panel.
Resolved; that Cllr Peter Lewington be elected Vice Chair of the Finance Panel for the ensuing year. The nomination was proposed by Cllr Aled Davies and seconded by Cllr Arwel Jones. The appointment was agreed by the Panel
There were no Declarations of Interest from Members relating to items to be considered on the agenda.
Resolved; that the minutes of the meeting held on 13 May 2026 be approved as a true and accurate record. The proposal was made by Cllr Peter Lewington and agreed by the Panel. The Chair noted an outstanding matter relating to the presentation of school deficit figures within finance reports and requested that this be addressed in future reports. The Panel also noted the response to its previous recommendation regarding the presentation of budget virements, which would be reviewed by services for future reporting.
Background: The Portfolio Holder for Finance introduced the Revenue Outturn Report for 2025/26 and highlighted that the Council had achieved an overall underspend of £1.2 million, representing 0.3% of the total budget, despite operating within a challenging financial environment. The Portfolio Holder advised that this reflected strong financial management across services and the ability of officers to manage emerging pressures throughout the year. The Panel was informed that £12.4 million of savings had been delivered during the year, equating to 77% of the savings target, whilst £2.7 million of savings had not been achieved and £2.5 million had been carried forward. It was acknowledged that identifying and delivering savings was becoming increasingly difficult as financial pressures continued to grow. The Portfolio Holder reported that the Council’s reserve position remained strong, with the General Fund Reserve increasing to £12.3 million, representing 4.8% of the budget. Significant transfers had been made into specific reserves to help manage inflationary pressures, fuel cost risks, transformation activities and future financial challenges. Members were also advised that the overall schools’ financial position had deteriorated during the year, with school deficits increasing to £3.1 million, reflecting a greater use of reserves than had originally been planned. In summarising service performance, the Portfolio Holder noted that many services had reported underspends, largely attributable to staff vacancies, additional income generation and grant funding received during the year. Ongoing transformation activity aimed at reducing costs and modernising service delivery was also highlighted, although higher than anticipated costs in relation to redundancies, had been incurred during the year. Points raised by the Panel: Responses received from Officers or Cabinet Members. Financial Management and Budget Resilience • Requested further explanation of what was meant by “strong financial management” and sought assurance regarding how emerging risks, including inflation, increased demand and workforce challenges, had been managed throughout the year. • Enquired whether savings arising from the Sustainable Powys programme were beginning to materialise and whether greater efficiencies were expected over the longer term. • Suggested that the presentation of cost reduction information should distinguish between savings not achieved and those carried forward into the next financial year. • Raised concerns regarding the apparent reliance on grants received late in the financial year and sought assurance that the Council was not dependent upon such funding to achieve a balanced budget. • Enquired whether the Council had prior knowledge that the £900,000 Digital Service Grant would be received. • Highlighted perceived vulnerabilities within the budget relating to late grant funding and the delivery of savings programmes, particularly within Adult Social Care and Children’s Services. Cabinet Members and officers explained that strong financial management referred to the ability of finance officers and Heads of Service to manage budgets flexibly throughout the year, responding to unforeseen pressures such as inflation, workforce challenges and increased demand. They advised that budgets were not static and required continual monitoring and adjustment to maintain financial stability. The £1.2 million underspend demonstrated that services had successfully adapted to emerging pressures whilst maintaining a balanced budget position. In relation to Sustainable Powys savings, Members were advised that a forthcoming transformation report would provide detailed information on savings, cost avoidance and efficiencies delivered through the transformation programme and Sustainable Powys principles. Cabinet Members emphasised that the Council did not rely upon late grant funding to balance the budget. Services managed budgets throughout the year on the assumption that additional grant funding might not materialise. Officers confirmed that, even without the grants received at year-end, the Council would still have achieved a balanced position. The £900,000 Digital Service Grant had been anticipated in advance and had therefore not represented an unexpected windfall. In response to concerns regarding budget fragility, officers acknowledged that all budgets carried inherent risk and required careful monitoring throughout the year. They advised that savings delivery would continue to present challenges, particularly in demand-led services, and therefore ongoing financial oversight remained essential. Savings Delivery and Adult Social Care • Requested clarification regarding the significant shortfall in Adult Social Care savings delivery and sought an explanation for the delays affecting planned efficiencies. • Enquired whether the recurring challenges associated with achieving social care savings represented a persistent structural issue rather than a one-off occurrence. • Sought assurance that close monitoring and oversight arrangements were in place for areas of the budget where savings delivery remained challenging. Cabinet Members and officers advised that the underachievement of savings within Adult Social Care had been attributable to several factors. Delays in the Welshpool Extra Care project had postponed the delivery of planned savings, whilst changes to day opportunities and transformation projects had been delayed to allow additional community consultation and engagement. Workforce changes associated with these projects had therefore also been deferred. Officers further explained that operational priorities had focused on managing new referrals, ensuring timely care provision and reducing demand pressures through “right first time” interventions. As a consequence, less capacity had been available to undertake reviews of existing care packages that would have generated efficiency savings. Dedicated management arrangements and additional oversight had subsequently been introduced to prioritise this work. In responding to concerns regarding recurring savings pressures, Cabinet Members advised that delivering efficiencies in social care would always be challenging because demand levels and the complexity of care needs could change rapidly. However, they reported that the service was significantly more stable than it had been several years previously and that transformation activity continued to improve financial sustainability. Cabinet Members confirmed that more detailed monitoring reports on efficiency delivery had been requested and would be provided regularly. Health Board Working and Regional Integration Fund (RIF) • Requested assurance that effective partnership working was taking place with Powys Teaching Health Board in relation to individuals with complex needs and associated costs. • Sought clarification regarding the future of Regional Integration Fund (RIF) funding and enquired how services would be managed should the funding cease after the current programme period. Officers confirmed that extensive joint working arrangements were in place with Powys Teaching Health Board to support individuals with complex needs. These included routine partnership forums, transition planning arrangements, multidisciplinary working and joint work to improve Continuing Healthcare processes. Officers advised that both organisations were jointly involved in transformation programmes and were working collaboratively to improve service delivery. Regarding RIF funding, officers advised that the programme was expected to conclude after the following financial year. Whilst assurances had been received that replacement funding arrangements would be introduced, neither their value nor structure had yet been confirmed. Services had therefore undertaken significant planning work to identify priority programmes, consider opportunities for mainstream funding, and prepare contingency arrangements. Where services could not be sustained through future funding arrangements, staffing implications would be managed through established human resources processes. Children’s Services officers explained that some services, including the Edge of Care service, were dependent upon RIF funding and were therefore being reviewed to determine whether alternative delivery models or mainstream funding arrangements might be required. Officers agreed to provide information regarding projects potentially at risk from the cessation of RIF funding. Inflation, Cost Pressures and Financial Risks • Enquired whether mitigation plans were in place to address cost pressures arising from international events, including impacts associated with conflict in the Middle East, rather than relying solely on reserves and risk budgets. Cabinet Members advised that the Council had previously transferred underspends into earmarked reserves in order to mitigate the financial impact of rising fuel costs and inflation. They reported that reserves had been strengthened to provide protection against future uncertainties, including international instability, inflationary pressures and fluctuations in interest rates. Whilst reserves provided an important safeguard, officers emphasised that ongoing budget monitoring and management remained critical and that unplanned savings might be required if economic conditions worsened. Financial Reporting and Budget Presentation • Requested clarification regarding the presentation and calculation of variances within Table 1, particularly the treatment of transfers to reserves. • Sought a clearer explanation of how transformation activity, service changes and associated savings would be reported and measured in future reports. Officers clarified that transfers to reserves were shown separately within the financial tables because they did not form part of the actual underspend position. They acknowledged that some aspects of local government financial reporting could appear complex but advised that the figures were presented to distinguish operational budget variances from reserve movements. In response to requests for improved transformation reporting, officers accepted that future reports could place greater emphasis on outcomes and impact. They agreed that transformation activity should be linked more clearly to measurable improvements for residents and advised that work was already underway through the Council’s self-assessment and performance frameworks to strengthen this approach. Staffing Vacancies and Workforce Management • Enquired about the impact of delays in filling vacant posts on service delivery and questioned whether long-term vacancies indicated that some posts might no longer be required. • on the length of time vacancies had remained unfilled and suggested that vacancy data could be reported more systematically in future. Officers acknowledged that prolonged vacancies could legitimately prompt questions about the continued need for certain posts. However, they advised that the reasons for vacancies varied considerably between services and could include recruitment difficulties, service redesign and the temporary use of agency staff. Vacancy levels and associated budget variances were being reviewed corporately by the Corporate Leadership Team to identify opportunities that could inform future budget planning. Officers noted that detailed vacancy information was held within individual services and was routinely reviewed operationally. They considered that a corporate vacancy report would require significant contextual information in order to be meaningful Schools’ Financial Position • Questioned how a reported surplus within school delegated budgets could coincide with an increase in overall school indebtedness and requested greater clarity in the presentation of these figures. • Suggested that the reporting of school reserves and deficits should provide a clearer indication of the level of financial risk facing schools. Officers explained that the apparent contradiction between an overall school budget surplus and increasing school deficits arose because the reported variance related to performance against planned budgets and reserve movements rather than the total level of school balances. The reported figures reflected differences between planned and actual use of reserves, whereas the school balances table showed the overall financial position across schools. Cabinet Members acknowledged the concerns raised regarding presentation and visibility of risk but advised that both variance and reserve information were already included to provide a complete picture of school finances. Officers undertook to provide further clarification regarding the reported figures. Reserves and Risk Management • Requested clarification regarding increases in reserves and sought to understand whether these reflected underspends, deferred expenditure or future commitments. • Enquired specifically about increases within the Transport and Equipment Fund reserve and whether these reflected delayed spending that would be required in future years. Cabinet Members advised that reserves served an important role in mitigating financial risk and managing future expenditure commitments. They explained that some reserve movements reflected planned contributions to support future capital expenditure, vehicle replacement programmes, grants carried forward between financial years and protection against unforeseen pressures. Officers explained that the Transport and Equipment Fund received regular annual contributions to support vehicle replacement and equipment investment. The level of reserve utilisation in any year depended upon operational requirements and investment needs at that time. Corporate Activities and Budget Overspends • Requested further explanation regarding the unusually high overspend reported within Corporate Activities and sought clarification on the underlying causes. Officers advised that the overspend within Corporate Activities primarily reflected utilisation of the risk budget, transfers to reserves, redundancy-related costs, provisions for bad debts and costs associated with the collection of council tax and business rates. Additional provisions relating to uncertainty surrounding the council tax premium also contributed to the reported position Transformation and Performance Reporting • Suggested that future transformation reporting should focus not only on activities undertaken but also on measurable outputs and outcomes, enabling clearer assessment of the benefits delivered through transformation and Sustainable Powys initiatives. Officers agreed that reports should demonstrate not only activities undertaken but also the impact and outcomes achieved. They acknowledged that the Council needed to become better at evidencing the benefits delivered through transformation initiatives and advised that future self-assessment reporting would seek to present this information more clearly. Officers undertook to consider how future reports could better demonstrate the relationship between activities, outcomes and improvements for residents. Highways, Transport and Recycling (HTR) and Income Generation • Requested clarification regarding references to “tighter expenditure control” within the HTR service commentary and sought assurance that this did not indicate previous weaknesses in financial controls. • Enquired what was meant by “ambitious income forecasting” and how additional income assumptions had been developed. • Requested clarification regarding higher-than-forecast insurance excess costs and sought to understand the reasons for the increase. Cabinet Members advised that references to tighter expenditure control within HTR reflected improved management of spending rather than any previous weaknesses in financial controls. They explained that the service had worked carefully to target available resources towards priority areas and respond quickly when financial pressures arose. Officers further explained that “ambitious income forecasting” referred to maximising legitimate income opportunities, including income generated through work undertaken on behalf of external organisations such as trunk road services. This was not based on increasing charges beyond approved inflationary increases but rather on ensuring that services recovered appropriate income where available. In relation to insurance excess costs, officers advised that the Council operated insurance arrangements that included significant excess levels in order to reduce premium costs. The reported overspend reflected the timing and value of insurance claims that had been settled during the year, which could vary significantly between financial years. Insurance reserves were maintained specifically to smooth the financial impact of these fluctuations.
The Financial Outturn Capital Report 2025/26 as at 31 March 2026 was presented to the Panel. Members proceeded directly to questions on the report. Points raised by the Panel: Responses received from Officers or Cabinet Members. Capital Programme Delivery and Slippage • Enquired why only 76% of the capital programme had been spent during the financial year and sought clarification regarding what happened to the unspent capital allocation and how it was carried forward into future years. • Raised concerns that, if capital expenditure continued to underspend year after year, significant levels of planned investment could remain undelivered over the lifetime of the programme. Cabinet Members advised that 76% of the capital programme had been delivered during the year and explained that the remaining 24% largely reflected the re-profiling of projects rather than project failure. Unspent budgets were carried forward into future years through the capital programme process. They noted that capital expenditure profiles were continually reviewed and adjusted as projects progressed through planning, design and construction stages. Officers explained that project delivery timescales often changed as schemes advanced, resulting in expenditure being moved between financial years. They emphasised that this was a normal feature of capital programme management and was not generally indicative of projects being cancelled or abandoned. Capital Receipts and the County Farms Estate • Enquired whether the revised County Farms Estate policy would affect the Council’s ability to generate capital receipts and whether this would create additional risks for the capital programme. • Requested clarification on whether expectations for future capital receipts would need to be revised as a consequence of the policy changes. The Portfolio Holder advised that the revised County Farms Estate policy would have some impact on future capital receipts, although it was not expected to be significant. Members were informed that where capital receipts were generated from farm disposals, a proportion of the borrowing savings achieved would be reinvested into the estate to support its long-term sustainability and income generation. Cabinet Members considered that the revised policy struck an appropriate balance between maintaining the estate and generating capital resources. They advised that any impact on future capital receipts would continue to be reflected in capital planning assumptions. Capital Programme Monitoring and Transparency • Raised concerns regarding significant variations between capital programme figures reported in different years and between budget reports and outturn reports. • Highlighted the difficulty in tracking individual projects, particularly within the schools capital programme, where projected expenditure appeared to change substantially between successive budget reports. • Requested greater transparency regarding how and why capital programme profiles changed over time. • Sought the development of reporting arrangements that would enable capital projects to be tracked more effectively throughout their lifecycle. Officers explained that variations between successive capital budgets largely reflected annual re-profiling exercises. Project costs, design work, procurement processes and construction programmes often evolved over time, meaning that estimates became more accurate as projects progressed towards delivery. Cabinet Members acknowledged concerns regarding the transparency of programme changes and accepted that additional reporting could be considered. Officers agreed to review how information might be presented to provide greater visibility of project movements and expenditure changes over time, whilst avoiding duplication of reporting already provided to other committees. Capital Receipts, Borrowing and Revenue Implications • Requested clarification regarding the relationship between actual capital receipts achieved during the year and previously stated capital receipt targets. • Enquired whether lower-than-anticipated capital receipts had resulted in increased borrowing requirements. • Sought information on the revenue cost implications of additional borrowing arising from delayed or unrealised asset sales. • Requested clarification regarding the formula that would be applied to reinvest any savings associated with County Farms asset sales back into the estate. • Suggested that future reporting should make the relationship between capital expenditure, capital receipts and long-term borrowing requirements more visible and easier to understand. The Portfolio Holder clarified that the previously referenced £10 million capital receipts figure had not been a formal budget target but rather an aspirational estimate of what might have been achievable at the time. He advised that changing circumstances meant that level of receipt was no longer considered realistic. Cabinet Members confirmed that higher capital receipts would naturally reduce borrowing requirements and associated financing costs. However, they emphasised that the Council could only budget against receipts already secured and could not rely on anticipated future asset sales. They reiterated that achieving best value from assets remained more important than selling assets solely to meet receipt targets. The Portfolio Holder acknowledged the importance of understanding the relationship between capital expenditure, capital receipts and borrowing costs. It was noted that financing savings from asset disposals could be significant, with asset sales reducing the need for borrowing and therefore reducing future revenue costs. Schools Capital Programme • Raised concerns regarding the scale of investment proposed within the schools capital programme and questioned how movements of approximately £20 million between projected expenditure figures could be adequately scrutinised. • Requested more detailed information on individual education projects rather than high-level programme totals, to enable better understanding of programme delivery and expenditure. Officers explained that fluctuations within the schools capital programme were largely attributable to project profiling rather than fundamental changes to the programme itself. They advised that costs and delivery schedules became increasingly refined as projects moved through development, procurement and construction stages. Officers acknowledged Members’ concerns regarding the visibility of individual education projects and advised that further consideration would be given to whether more detailed reporting could be provided to support scrutiny of major schemes. Capital Grants and Funding Arrangements • Requested greater clarity regarding the different types of grants supporting the capital programme and how these grants were secured and managed. • Highlighted differences between planned grant-funded schemes and grant opportunities secured through competitive bidding processes. • Enquired how the Council would address cost overruns on major school projects if expenditure exceeded the combined value of approved borrowing and Welsh Government grant funding. Cabinet Members advised that grant funding arrangements varied considerably across different programmes. Whilst some grants formed part of established long-term programmes such as Sustainable Communities for Learning, other grants were awarded through periodic bidding rounds and could only be confirmed late in the financial year. Officers explained that school capital grants were generally easier to plan around where they formed part of multi-year Welsh Government programmes. However, smaller capital grants, including ALN, Community Focused Schools and Welsh-medium grants, often presented greater planning challenges because allocations could be confirmed relatively late and were required to be spent within strict timescales. Services therefore sought to ensure that projects were “shovel ready” so that funding could be utilised quickly once awarded. Officers further advised that considerable work was undertaken to anticipate likely grant opportunities and prepare projects in advance. They noted that delays in Welsh Government approval processes could create additional challenges for programme delivery but reported that lessons had been learnt and preparations were already underway for future funding rounds. The Finance Panel did not make any formal recommendations to Cabinet on either the Revenue Outturn or Capital 2025-26 reports.
The Panel considered its Forward Work Programme and noted a number of issues arising from the scrutiny of the Revenue and Capital Outturn reports that would require further consideration through future reporting. The Panel noted the Forward Work Programme and identified a number of matters arising from the Revenue and Capital Outturn reports that would be incorporated into future scrutiny work.
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