The cost of living crisis will be discussed by Powys council over the summer

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HOW the cost of living crisis is affecting Powys County Council will be explained in financial reports over the summer.

At a meeting of the Governance and Audit Committee on Friday, June 24, the Board’s Chief Financial Officer, Jane Thomas, made a presentation on how inflation, the energy spiral and the cost of energy crisis life affect the board.

She told the committee that the board also needed to reassess contracts with some of its suppliers who are also struggling in the current financial climate.

Ms. Thomas: “The impact of inflation and observed price increases is monitored very closely.

“We have had requests from vendors and vendors to review contracts with them, due to the impact this is having on them.”

Ms Thomas explained that the council now conducts ‘open book reviews’ with their contractors and suppliers to find out their financial health.

Ms Thomas said this was to allow the board to understand how much the contract was actually linked to the specific price increases seen.

Committee vice-chairman and lay member John Brautigam said: “With some of these vendors we don’t always deal with very sophisticated accounting systems, we need a fairly light touch when it comes to it’s about talking to them.”

Ms Thomas also points to a cautious approach taken earlier this year to hoard some of the Welsh Government’s additional funding in reserve accounts.

Ms Thomas said: ‘We raised this as a risk when we set the budget and as a result the council have a number of reserves which have been set aside to manage this.’

Ms Thomas added that a group of council staff had been set up to regularly review the situation.

Internally, a register has been set up so that municipal services can report any financial problems.

If a ministry is unable to manage its budget, money can be moved around to fill the hole in reserve budgets – a process known as “firing,” Ms Thomas explained.

Ms Thomas said: ‘Through these processes, I think it’s fair to say that we think we have a good handle on oversight.

“We are making sure that when the board receives the first quarter (April to June) report on the budget, we will start highlighting any concerns that arise.”

“We are also reviewing our medium-term financial strategy.”

Ms Thomas said the current strategy called for a 2% level for headline inflation.

Last week it was reported that the UK government’s preferred method of measuring inflation, the consumer price index, had risen to 9.1%, the highest in 40 years.

Ms Thomas said: “We will be reviewing our assumptions in the plan and doing that with the cabinet over the next few months.

She hoped that a revised strategy would be presented to a full council meeting in September for approval by all councillors.

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