News

Is financial ignorance bliss for councillors?

Published

10 years ago

January 5, 2015

THE COUNCIL’S budget is essentially the same as our household budget: we get a salary and/or pension/benefits out of which we pay our expenses, and with a bit of luck, have some disposable income for non-essential ‘luxuries’ such as holidays, and if we are really fortunate, are able to set aside some savings. The Council gets its income from a variety of sources: Rate Support Grant (our income taxes), Non Domestic or Business Rates (paid by local businesses), Council tax paid by us, and direct charges from “customers” of Council services, for example Car Parking and some Adult Services, e.g. Day Centres and Meals on Wheels. The Council can also receive direct grants for providing specified services. It can increase its income yields by putting up the Council Tax and direct charges. From this collective income, the Council budgets and prioritises how much it can spend on providing our services. Much in the same way that we may be fortunate enough to build up a savings pot, the Council can build up reserves, which are required to even out peaks and troughs of expenditure over a number of years, or to put by for specific purposes or projects. Like us, the Council can also borrow money to fund projects that have a ‘life’ over a number of years. However, unlike us, it is not allowed to finance expenditure in the current year from borrowing.

Leaving it to officers

It is impossible for Councillors to authorise every payment the Council makes. For day to day operational purposes, the Cabinet therefore authorises or delegates spending powers to unelected officers to incur expenditure during the year on services within the Council, approved Budget allocations. The Cabinet has delegated wider powers to the Director of Finance for the allocation and use of reserves, both Capital and Revenue. Every three months, throughout the year, officers are required to report the financial position to Cabinet and Scrutiny Committees, plus a final outturn monitoring report at the 12 months stage. In theory, these reports enable financial performance to be monitored, by elected Councillors, against the approved annual budget. Any corrective action considered necessary as proposed by officers should be considered and agreed by Cabinet. However, these reports are focussed at Net expenditure level, which masks the true level of services provided and expenditure incurred at Gross Expenditure level. Any specific remedial action necessary is therefore not fully reported for approval. While the position on spending against the Council’s approved budget must be reported to Cabinet and Scrutiny Committees on a three monthly basis, the position on reserves is only reported to Cabinet/Council at Annual Budget time, and annually to the Corporate Governance Committee as Draft Accounts pre-audit, and then as the Final Audited Accounts.

Revealing Reserves

On September 29, the Council’s Corporate Governance Committee received a report on the Audited 2013/14 Accounts, which included, a table of Usable Reserves on page 64. Page 63 provides description of the individual reserves for those interested. This is the only comprehensive presentation where all reserves are reported on one page. Categories of reserves are subject to different controls. The Council is required to carry annual Working Balances, and the Auditor comments on the adequacy of these reserves, provided specifically in order to meet urgent, unforeseen contingencies or circumstances. The Education Reserves are primarily under the control of individual schools. The Children and Families Overview and Scrutiny Committee November 10, received a comprehensive report providing information on the amount of balances held by schools over the last three years with a commentary on future prospects. The Table shows that the Council had a total Earmarked Capital and Revenue reserve balance of about £50m under its direct control at 1 April 2013, rising to £56million at 31 March 2014, allocated for the purposes shown. To set these amounts in some sort of context: the Council sought to raise £40.5m from Council Tax in 2014/15 (an increase of £1.5million over 2013/14) and £13.4million from its Discretionary Direct Fees and charges, (an increase of £1.6million over 2013/14). Of particular note and significance, is the trail of money movements between The Pay and Grading Reserve and 21st Century Schools Reserve during 2013/14: all happening without councillors being informed but within the delegated authority of the Director of Finance.

Moving money

Some years ago, in common with other Councils, grants were made by the Welsh Government, staged over a number of years, to fund the likely cost of the Equal Pay/Pay and Grading reviews. In total, by March 31, 2012, our Council had received around £11.5m by grant, which was not hypothecated, and therefore did not have to be used for the purpose for which it was given. During 2012/13, £4.5million was charged against this provision in settlement of Pay Awards, leaving a balance of £7.0million – £5.6m of which was allocated to the Pay and Grading Earmarked Reserve on March 31, 2013 (let’s leave the unallocated amount of £1.4m ‘floating’ for the moment, I have yet to follow this through, suffice it to say that there is another ‘hidden’ category of reserve or Provision). The £5.6million can be picked up on the accompanying table, where the line shows a further contribution of £0.5m coming from revenue accounts, providing a total available Pay and grading reserve of £6.1m. From this sum, a contribution of £2.335million to revenue accounts was made in 2013/14 to meet the cost of further settlement of awards, leaving a balance of £3.765million at 31 3 2014 available for Pay and Grading. In total, an amount of £7.3million has been paid in pay settlements out of the total grant of £11.5million, leaving a balance of Pay and Grading Grant money of £4.2million. We have been told by officers and councillors that the Council could not afford to pay out more. While it may be true that the Pay and Grading Review was conducted fairly, an Appeals process was instigated at the behest of indignant Councillors. I understand that Appeals are still being considered and settled. I am not aware that the financial position on Pay and Grading has ever been explicitly reported or that appropriate questions have been asked by Councillors. I am sure that if I have got this wrong, the Council would be only too pleased to clarify the position.

21st Century Schools

The table reveals that £2.861million was allocated out of the Pay and Grading Reserve into the 21st Century Schools Reserve, leaving £0.9million available on March 31, 2014 to settle Future Pay and Grading appeal awards. The 21st Century Schools programme represents a significant investment by the Council and has been agreed as a priority. Turning to the 21st Century Schools Reserve, an initial £8.514million reallocation of balances out of other earmarked reserves in order to prime the 21st Century Reserve was approved by Council in February 2011, as part of the 2011/12 Budget. Starting with the £8.514million pump priming, further contributions from revenue service accounts of £4.526million in 2011/12, £0.174m in 2012/13 and £3,519m in 2013/14, which, with the addition of the transfer during 2013/14 of £2.861million from the Pay and Grading reserve, leaves the 21st Century Schools balance on March 31, 2014 standing at £19.594million. With services being under such financial pressure, the intention is to fund the Council’s share of this significant programme from Capital Receipts (proceeds from the sale of Assets) and Borrowing.

No questions asked

The Council, when setting its budget, rarely, if ever, considers the allocation and level of reserves. With an apparent ability to increase reserves by a total of £6.0million during £2013/14, at a time when targeted budget cuts of £1.6million were also achieved, it is perhaps time that councillors took an interest in the allocation and level of reserves. Perhaps more to the point is the question of how service budgets, under pressure, can make contributions into earmarked reserves. By amending the Council’s Constitution it is possible for the Council to redefine the terms of delegations given to Directors and the Director of Finance, and regain a measure of financial control for themselves. There may well be good arguments for doing this, in the light of the severe financial constraints the Council faces, for the sake of openness and transparency and democracy.

Health

Eluned Morgan on NHS: ‘I’ve listened, I’ve heard, I’m making it happen’

Published

5 hours ago

November 15, 2024

Tom Sinclair

FIRST Minister Eluned Morgan is set to announce an additional £22 million to tackle NHS waiting lists, bringing the total funding commitment to £50 million in a bid to address the longest delays in NHS Wales.

The announcement will form a key part of her speech at the Welsh Labour Conference on Saturday in Llandudno, marking her first as Welsh Labour Leader. Morgan will emphasise the strength of partnership between the Welsh and UK Labour Governments, showcasing their shared commitment to delivering for the people of Wales.

The funding pledge comes two weeks after Rachel Reeves unveiled a historic £21 billion funding settlement for the Welsh Government—the largest since devolution. Drawing on her summer listening tour, where she engaged with thousands across Wales, Morgan will declare: “I’ve listened, I’ve heard, I’m making it happen.”

Focus on NHS and Green Growth

During her tour, the First Minister heard the pride people feel for the Welsh NHS and its workforce, as well as the importance of safeguarding its future. Today’s funding boost underscores Welsh Labour’s commitment to addressing key issues, distinguishing it as the only party serious about governance and delivery.

In addition to NHS investment, Morgan will highlight her administration’s ambitions for green jobs and growth. Five new renewable energy projects are set to be unveiled, alongside plans to streamline infrastructure planning by 12 weeks—a move aimed at accelerating progress in Wales. These initiatives are expected to create hundreds of skilled jobs, reinforcing Labour’s commitment to a greener, more prosperous future.

Conservative Perspective on NHS Wales

The Welsh Conservatives have expressed concerns regarding the current state of NHS Wales. They have highlighted issues such as prolonged waiting lists and underfunding, attributing these challenges to longstanding Labour governance. In a recent statement, the Welsh Conservatives emphasized the need for increased investment and support for NHS staff, proposing the establishment of an NHS Covenant to guarantee such commitments.

Additionally, the Welsh Conservatives have criticized the Labour Government for not allocating the full Barnett consequential funding to the Welsh NHS, arguing that this shortfall has exacerbated existing challenges within the health service.

Delivering for Wales

The Conference will celebrate the achievements of the Welsh Labour Government while setting out its future priorities. From tackling NHS challenges to driving renewable energy development, the event will demonstrate Morgan’s focus on the issues that matter most to the people of Wales.

Eluned Morgan’s speech is expected to reaffirm Welsh Labour’s ambition to lead with purpose, listening to the public and working closely with the UK Labour Government to deliver tangible results.

News

Young Changemakers Drive Wales Toward a Net Zero Future

Published

6 hours ago

November 15, 2024

Tom Sinclair

AS world leaders gathered at COP29 to address global climate challenges, young people in Wales were making their own mark on the path to a greener future. The Tomorrow’s Changemakers Hackathon, held last Friday, showcased the ingenuity, passion, and practical solutions of 26 young finalists from across Carmarthenshire and Pembrokeshire.

This flagship event, hosted by Pembrokeshire-based education enterprise Cymbrogi Futures, is part of a year-long programme empowering young learners with the skills and confidence to tackle climate challenges head-on.

THE WINNING IDEA: FAIR FASHION

The team from Queen Elizabeth High School, Carmarthenshire, stole the show with their innovative project addressing fast fashion waste. Their idea? Personalised soft toys crafted from discarded fabric destined for landfill. By engaging with local businesses and charity shops, the team not only demonstrated creativity but also gained practical insights into the environmental impact of textile waste.

Nia John, lead teacher for the team, shared: “This project allowed us to incorporate real-world learning into the classroom. Pupils were thrilled to interact with industry experts, growing their ideas through meaningful collaboration.”

Ariana, the team leader, reflected: “I enjoyed learning skills like collaboration and creativity, which will help me in the future. This experience has inspired me to start our school’s Climate Action group.”

OTHER FINALISTS: CONNECTING COMMUNITIES

Equally impressive was Milford Haven School’s ‘Cafe Cleddau’, a visionary concept featuring a solar-powered boat to connect communities along the Haven waterway. With sustainable snacks, a soft-play area, and hydro-powered backup systems, the idea aimed to revolutionise tourism and nightlife in the region.

All finalist teams received vouchers for the ethical online store Social Supermarket, while the winning team took home a £300 cash prize to fund biodiversity projects at their school.

BUILDING A NET ZERO FUTURE

Cymbrogi’s founder, Liza Lort-Phillips, underlined the importance of initiatives like Tomorrow’s Changemakers:
“Today’s learners will face far greater challenges in a climate-changed world than any of us. By sparking their imaginations now, we can equip them to become the innovators and leaders of tomorrow.”

The programme was supported by major partners, including the Port of Milford Haven and Cwm Environmental, who provided real-world insights into the challenges and opportunities in Wales’ green economy.

Anna Malloy, Communications and Marketing Director at the Port of Milford Haven, remarked: “This initiative is vital. Empowering the next generation with green skills and confidence ensures they are ready to lead the charge toward a net-zero future.”

A COMMUNITY-ROOTED CHALLENGE

The hackathon is the culmination of a three-stage learning journey inspired by the Well-being of Future Generations Act and the UN Global Goals. The programme began with an online course introducing topics such as the circular economy and systems thinking, followed by mini-challenges rooted in real-world scenarios in Pembrokeshire and Carmarthenshire.

Learners explored diverse challenges, including:

Sustainable Tourism: Imagining a car-free holiday in Milford Haven.
Energy: Exploring renewable solutions for rural Wales.
Fashion: Tackling fast fashion waste.

The finalists worked with industry experts, visiting sites such as the Port of Milford Haven and Cwm Environmental to gain hands-on experience.

A CALL TO ACTION

Samuel Kurtz, MS for South Pembrokeshire and Carmarthenshire, praised the event:
“The curiosity and ingenuity of these students are truly inspiring. Their ambition shows they are ready to embrace the challenges and opportunities ahead. Initiatives like this are essential for building a resilient and sustainable future.”

Cymbrogi Futures hopes to expand the programme to schools across Wales, with plans to reach Wrexham and Neath Port Talbot in 2025.

As Wales leads the charge toward a net-zero future, the Tomorrow’s Changemakers programme reminds us that the solutions of tomorrow lie in the hands of today’s young minds.

Pictured above: Young innovators: Queen Elizabeth High students celebrate their Fair Fashion project victory (Pic: MHPA).

Community

Port supports Cruising Free’s Atlantic Dash with donation of safety equipment

Published

7 hours ago

November 15, 2024

Tom Sinclair

THE PORT OF MILFORD HAVEN has announced a donation of vital safety equipment to support local group Cruising Free, who will be embarking on a challenging 3,200-mile rowing journey across the Atlantic Ocean. The crew of Cruising Free will row from Lanzarote to Antigua to raise funds for the Cystic Fibrosis Trust and Paul Sartori Hospice at Home.

The Port of Milford Haven’s donation includes a comprehensive range of safety gear designed to support the crew’s journey and ensure their safety during this extraordinary expedition. Items provided include:

Flare Kit
Satellite Phone
VHF Radios
First Aid Kits
GPS Equipment
Lights
Safety Lines
And more

The Port of Milford Haven, the UK’s leading energy Port, is committed to supporting local maritime initiatives. This donation is a key part of the Port’s ongoing efforts to promote safety in all aspects of maritime activity, particularly for adventurous projects like Atlantic Dash.

“We are proud to support the amazing crew of Cruising Free as they undertake this monumental challenge,” said Mike Ryan, Harbourmaster at the Port of Milford Haven. “Safety is paramount for anyone taking to the sea, and we hope that the equipment we’ve provided will support them as they navigate the Atlantic. Their journey will not only raise vital funds for two incredibly worthwhile causes but also inspire people across the UK and beyond. We are excited to be part of their journey and wish them the very best of luck.”

The Atlantic Dash will see the team of experienced rowers tackle the gruelling transatlantic journey, which is expected to take several weeks. The funds raised by Cruising Free will directly benefit the Cystic Fibrosis Trust, which supports research and care for people living with cystic fibrosis, and the Paul Sartori Hospice at Home, which provides specialist palliative care services to individuals in West Wales.

“We are truly and eternally grateful to Port of Milford Haven who have provided us with the essential safety equipment needed to embark on our 3,200 mile journey from Lanzarote to Antigua. We are hoping not to need to use the flares or safety lines, but the satellite phone and VHF radio will keep us connected with land and loved-ones through the entire 2-month journey. Thank you!” said Polly Zipperlen, team member of Cruising Free.

Cruising Free’s row across the Atlantic will begin in January 2025, and the crew’s journey will be tracked in real time to allow supporters to follow their progress. The team is already actively fundraising and plans to hold several community events in the lead-up to their departure.

To learn more about Cruising Free’s Atlantic Row and how you can support their cause, visit their Linktree here.