Anglesey County Council has reported an underspend of £4.798m at the end of the fourth quarter of the financial year.
But the budget only balanced the authority says because it received additional Welsh Government funding due to the Covid pandemic and its recovery.
A meeting of the Executive heard on Tuesday that the underspend represented 3.25 percent of the council’s total net budget for 21/ 22.
Cllr Robin Williams portfolio holder for finance, corporate business and customer experience said the situation had also been affected by the timing of the funds.
At the meeting, the budget was described by Council leader Llinos Medi as “exceptional” and “not a normal budget.”
A written report also stated: “The financial year 2021/22 had been “a different year.” The Council had received “a significant amount” of additional funding from the Welsh Government.
On March 9, 2021, the council had initially set a net budget for 2021/ 22 of £147.42m – funded from council tax income, non-domestic rates and general grants, and included a total for general and other contingencies amounting to £1.333m.
However, at the end of quarter 4, 2022, March 31, the council reported during the financial year, claims made to the Welsh Government, in relation to the Covid crisis totalling £6.135m, and had received payment of £3.854m.
At the end of the year, it was still waiting for £1.8m to be paid, but the majority had been paid or was anticipated.
Cllr Robin Williams said “A lot of grants came in from the Welsh Government but they came late in the day.
“We are really grateful for the the grants, the situation for us would have been much different if we hadn’t received those grants.”
Marc Jones Director of Function Resources said: “The 2021 financial year was still “still an exceptional year” with Covid having impacted on the council’s work, especially in the first quarter of 21/22.
There were “specific reasons for the underspend,” he said, including receiving additional grants for different services, “especially in the social services,” where additional funding was provided to help with pressures.”
“We received the usual grant from the Welsh Government the RSG, we had an additional sum at the end of the year of £1.4m, like every council, that contributed to the underspend,” he said.
Other reasons for the underspend included borrowing costs being lower, due to underspend on the capital budget, council tax premium income being higher than the target, vacant posts and income from different services especially the maritime service during the summer of 2021, he said.
Council leader Cllr Llinos Medi said: “I think it is important to note that there is an underspend.
“But in social services alone we would have had over a million overspend if it wasn’t for the grant funding we received, about a half a million overspend in the children services and [an overspend] when you look at homelessness.
“The budget has balanced because we received the additional funding due to the Covid pandemic.” She said.
“It is an exceptional budget, so we have to be extremely careful in terms of the risks now facing us.”
“It isn’t a normal budget, we wouldn’t make that much of a saving in a normal year, in case the public have the perception that our services are underspending.”
Cllr Williams said “It is important to note, the situation would be very different if we hadn’t had those grants late in the day,.
“Of course, that is relevant as well to this year’s budget, there are now some concerns about setting the budget for 2023/24.”
“We don’t know what challenges we will face moving into the current financial year, and there will be extensive challenges ahead of us as a council in terms of increasing costs.
“The additional funding is the main reason why the council’s accounts show a significant underspend at the end of the financial year.
“This is not unique to Anglesey and the majority of the other Welsh councils are finding themselves in a similar position.”