‘Significant financial challenges’ facing Monmouthshire council this year – report

Monmouthshire County Council was facing “significant financial challenges” heading into this financial year – even before the impact of the coronavirus crisis was considered – a report has highlighted.

The local authority’s outturn statement for its budget in the last financial year shows it faced a net deficit on services of £3.76 million before two one-off payments were made.

An “unprecedented increase” in the number of children coming into care, rising from 173 to 219 in the year, led to an overspend within children’s services of £3.28 million.

Increases in placements for younger adults with learning and physical disabilities, with 47 costing more than £1,000 per week, led to an overspend of £1.459 million in the adults with disabilities budget.

School deficits also grew from £234,000 to £434,000, with 17 schools in deficit at the end of the financial year.

The position within secondary schools is “particularly acute”, with an overall deficit of £931,000, including Monmouth Comprehensive facing a £463,000 shortfall.

Passenger transport went £901,000 over budget, with an increase in the cost of additional learning needs and external school transport provision.

The council’s car parking budget also overspent by £423,000.

Delays in introducing increased parking charges and free parking within Abergavenny’s Morrisons store taking away from pay and display income were blamed.

The council also did not meet its income target for parking enforcement, with a lack of staff in the early part of the year resulting in less fines being issued.

Investments in Newport Leisure Park and CastleGate Business Park have “performed well” – but while the latter has generated a £125,000 surplus, it is £85,000 below its expected target due to vacant units.

Despite overspends in some areas, 84 per cent of proposed savings were delivered.

“The authority even prior to the ongoing Covid-19 crisis was already facing significant financial challenges heading into the 2020/21 financial year,” a  council report says.

“The ongoing Covid-19 crisis presents its own additional financial challenges and uncertainty both in terms of additional cost and significant loss of income across services.”

Only some of the impact of the pandemic is shown in the report.

More than 700 leisure centre memberships were cancelled after closures in March, with an anticipated loss of £210,000, while parking income at the end of the year was also hit.

The council gained £2.3 million as a one-off payment from VAT receipts covering the period January 2007 to March 2019.

It followed a court ruling which determined that certain supplies of sporting services made by councils can be exempt from VAT.

A further £3.25 million of one-off costs met Welsh Government criteria to be capitalised.

These two payments left the council with a surplus of £1.8 million, which is planned to be used to respond to financial risks around the Covid-19 crisis.