Powys County Council Delivered A Near £2m Surplus Budget

Powys County Council delivered a near £2m surplus budget in the last financial year despite missing vital savings targets, the Cabinet will be told. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

The council had a £1.965m surplus for the year 2015/16 which ended on March 31, thanks to two financial adjustments totalling £4.615m. Without the financial adjustments the council would have reported a substantial overspend with only £9.716m (76%) of the planned £12.768m savings being achieved. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

The surplus will be used for budget management and in particular to assist with transformation costs and to meet emerging budget pressures. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

Deputy Leader and Cabinet Member for Finance, Councillor Wynne Jones said; “I never imagined that I would view an outcome surplus of £1.965m as a disappointment, but in reality it is a disappointing performance against the targeted budget savings with only 76% achieved. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“Fortunately we were able to make two significant financial changes at the very end of the year, the capitalisation of £1.580m of costs associated with the transformation agenda, and secondly a change to the way the council repays its debts also released £3.025m into the revenue budget. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“These two changes made up for the poor savings performance and has provided a ‘one off’’ surplus and avoided the council finding itself very difficult financial position.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“The problem the Council now has is that this surplus is only ‘in year’ and does not satisfy the required longer term reduction in the Councils base budget. Therefore the unachieved savings will now need to be carried forward into the current year (2016/17) and achieved in addition to the current year’s savings target of over £10m. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“It is clear that even planned savings are proving very difficult to achieve and achievement within the timescales required by the budget framework is also proving to be an issue. However it has to be made very clear, the Government’s austerity programme will continue to at least 2020, which in turn means that Powys County Council has to achieve over £90m savings during that time (2012-2020). ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

“Failure by the council to deliver a substantially increased savings target for 2016/17 will inevitably result in more drastic actions and the removal of many services altogether.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​