Here is a summary of the City and County of Swansea Scrutiny Performance Panel - Service Improvement, Regeneration and Finance meeting. The panel reviewed the Revenue and Capital Outturn reports for 2024/25, noting an underspend in revenue expenditure and approving the carry forward of unspent capital funds to the next financial year. The panel also discussed and noted the work plan for the upcoming year.

Revenue Financial Outturn 2024/25

The Revenue Financial Outturn 2024/25 report was presented to the panel, detailing the council's financial performance against its approved revenue budget for the year. Cabinet Member for Economy, Finance and Strategy, Councillor Rob Stewart, and Director of Finance, Ben Smith, were present to answer questions.

Overall direct revenue expenditure for 2024/25 was £16.56 million less than the revised budget. This was attributed to a reduced use of the inflation provision and additional grant income from the Welsh Government. There was also significant in-year underspending on net capital financing of £12.690m.

Key points from the report:

• The net overall underspend at year end is mainly the result of a reduced use of the inflation provision together with corporate costs, where some significant grants from the Welsh Government were received very late in the year to helpfully contribute to overspends and/or to reduce draws from reserves.
• The underspend on capital charges of £12.690m will be transferred to the Capital Equalisation Reserve to help meet future capital costs.
• It is proposed to slightly increase General Reserves, which remain low for the size of the council.

Directorate Variances

The report highlighted variances in net expenditure across different directorates:

• Finance Directorate: An underspend of £293,000 was reported, mainly due to savings in supplies and services and net employee costs. The director noted potential future increases in demand for the Council Tax Reduction Scheme[^1] due to economic uncertainty. [^1]: The Council Tax Reduction Scheme (CTRS) is a support scheme that reduces the amount of council tax that eligible residents have to pay.
• Corporate Services Directorate: An underspend of £178,000 was reported, with savings in various areas including the Director's underspend, Communications, Corporate Planning & Performance and Legal and Democratic Services, offset by an overspend in HR and Service Centre.
• Social Services Directorate: An overspend of £7,509,277 was reported, driven by increased demand for services, particularly in Mental Health Residential Care and commissioned services for individuals with Learning Disabilities. These pressures have been partially alleviated through rigorous cost control in discretionary areas, staffing underspends, and increased income generation.
• Education Directorate: An underspend of £4,369,000 was reported, primarily from catering and cleaning, and pension/maternity grants. Additional Learning Needs pressures continue to grow. However, grant awards have had a significant impact on financial outturn and have improved the position for ALN.
• Place Directorate: An overspend of £272,317 was reported. The directorate budget continued to be impacted during the year in terms of income recovery, volatility in key market sectors such as recyclates and the combined effects of inflation including building price and pay inflation.

Schools Expenditure and Reserves

Schools' expenditure was £1,295,439 less than the delegated budget, resulting in an underspend of approximately 0.66%. This underspend will be funded by the schools' own reserves.

Reserves

The report recommended the following transfers to earmarked revenue reserves:

• £70,295 to Corporate Services for savings on National Insurance contributions in relation to Additional Voluntary Contribution (AVC) schemes.
• £2,267,000 to Finance/Corporate Costs for various items committed from the Contingency Fund in 2024/25, to be spent in 2025/26.
• £2,300,644 to Social Services, including a technical adjustment to reclassify some long held provisions as reserves, setting aside ring-fenced regional services underspends and returning unspent Child and Family Services drawdown to reserves.
• £3,462,687 to Education, including underspend on School Meals Service to be used to fund Free Schools Meals capital scheme, replenishing Schools ICT Infrastructure Reserve and creating a Schools Risk and Funding Reserve.
• £2,006,773 to Place, including various Commuted Sums, Joint Venture and other Third Party ring-fenced reserves, Arena/Copr Bay, Housing Options, Street Cleansing and returning unspent Recovery Fund drawdown to reserves.

The panel approved the recommendations in the report, including the proposed reserve transfers.

Revenue Outturn 2024/2025 – Housing Revenue Account (HRA)

The Revenue Outturn 2024/2025 – Housing Revenue Account (HRA) report detailed the City and County of Swansea's HRA outturn compared with the approved revenue budget for 2024/25.

The HRA showed a surplus of £0.335m compared with the original budgeted deficit as outlined in the budget report to members on 2nd March 2024 of £4.906m.

The main reason for this underspend and movement against original deficit of £5.241m is set out below:

The panel approved the proposed reserve transfers of £0.335m.

Capital Outturn and Financing 2024/2025

The Capital Outturn and Financing 2024/2025 report provided details of capital expenditure and financing for the year.

Capital outturn in 2024/2025 on the approved budget was £157.236m, which is a very significant level of spend across all service areas and a significant year on year improvement in percentage spend following a significant reprofiling exercise and reassessment of achievable delivery timelines. There was a consequently smaller under spend on the approved and reprofiled budget of £25.938m.

The net increase in the capital budget was mainly the result of:

• The addition of both grant funded and Council funded schemes after Council approved the original programme.
• Delayed or reprofiled spending from 2023/2024 carried forward into 2024/2025.

The panel approved the net underspend of £25.938m being carried forward to 2025/2026.

Work Plan

The panel noted the Service Improvement, Regeneration and Finance Work Plan 2025/26, which outlines the topics to be covered in future meetings.