AUDITORS say Merthyr Tydfil Council has made progress but concerns remain over its capacity to deliver changes.
An Audit Wales report set to go before full council on Wednesday, April 21, is an update on the performance of the council in addressing some key concerns that have been raised.
Audit Wales’ letter to the council in May 2019 raised concerns about the council’s financial situation, service pressures, leadership, capacity, and governance.
It leads to the council seeking assistance from the Welsh Government which has included the establishment of an improvement and assurance board, support with social services, governance and leadership, and advisers for education and HR.
The council submitted a recovery, transformation, and improvement (RTI) Plan to the Welsh Government in August 2020 which sets out a series of actions aimed at transforming and improving the council and underlines that “the status quo is not an option”.
The main finding of the latest Audit Wales report is that the council has “shown resilience in its response to recent challenges and has made progress in developing an improvement plan but it urgently needs to address its lack of capacity to drive the transformation needed and use its available resources to strengthen its resilience over the medium to long term”.
Audit Wales acknowledged the unprecedented year of challenges for the council with Storm Dennis and then the ongoing Covid-19 pandemic but added it is important that the council focuses on addressing the ongoing concerns and implementing its RTI Plan.
The report said that the council cannot continue to rely on there being positive financial settlements in the future and warned the council will need some form of continued support as it lacks the capacity to address the medium to long-term issues at the same time as operating from day to day in the short term.
The report mentioned that the council has efficiently delivered business grants, provided continuity of free school meals, and delivered the mass testing programme among a host of other emergency responses.
Estyn and Care Inspectorate Wales (CIW) identified strengths in the council’s response to the pandemic on education and social services.
Audit Wales said while it had not undertaken a comprehensive review of the council’s services and performance it did not consider services to be at immediate risk of failure.
CIW’s recent inspection of social services identified strengths and areas for
improvement and, aside from education, the national indicators from 2018-19 show a “mixed picture of performance”.
The council’s short-term financial position has improved with £300,000 added to its general reserves so these now amount to £5m.
The council currently has no plans to use any general reserves in the next two financial years and is broadly on track with planned savings for 2020/21 while projecting a surplus of £73,000.
The council has set a balanced budget for 2021/22 based on a council tax increase of 3.55%.
The May 2019 letter raised concerns about the £1.3m overspend of its social care budget in 2018-19 and the unprecedented demand around looked-after children.
In 2019-20, the looked-after children budget had a net budget deficit of
£669,000 but there was an overall social services budget surplus of £376,000.
As it stands although the council’s looked-after children budget is
projected to overspend in 2020-21 by £863,000 the council considers that the overall social care budget is under control.
The council has taken some steps to mitigate the overspend within its looked-after children budget and it is progressing aspects of the RTI plan aimed at safely reducing looked-after numbers.
The council’s revenue budget for 2021-22 includes £591,000 for additional
demand pressures for looked-after children residential placement services.
Relationships between the cabinet and the senior management team are said to have improved.
The 2021-22 revenue budget includes £705,000 for resources to help fill the capacity gap.
The council has filled or is in the process of filling, many of the gaps identified
including additional posts in environmental health, housing, additional learning
needs, engineering, and social services.
The report said:
“Whilst weak educational outcomes, particularly in the secondary sector, are a long-standing issue for the council we are seeing some early positive signs that the council is taking steps to address this.
“There is optimism within the council that the new strategy can lead to sustained improvement within education.
“The council has told us that there have also been more constructive discussions with the education consortium about its role to improve the educational outcomes for children in Merthyr Tydfil.”
Audit Wales has highlighted governance, leadership, transformation, capacity, the medium-term financial position and financial resilience, service challenges, performance management, and partnership working as areas where improvements still need to be made.
Audit Wales has made 10 recommendations for the council including :
Address the lack of capacity and expertise to drive and sustain the transformation agenda;
Make its senior management structure more permanent at the earliest opportunity;
Continue with its capacity review to reflect the transformation needed and learning from the pandemic;
Strengthen its communication and engagement with staff;
Ensure it remains focused on improving the education outcomes of all children and young people; and
Continue to strengthen its performance management arrangements and strengthen its scrutiny arrangements.