Decision:
RESOLVED to note the finance update.
Minutes:
4.1 Ian Williams presented to the Committee on work underway together with planned work to protect the Council’s position during the Pandemic, referring to a strong track record on financial management. He highlighted the following points:
· Pre-Covid-19, further in the February budget the need for further savings of £19m was identified, taking account of the impact of ‘fairer funding’ and the impact of any impacts from business rates reduction
· Since Covid-19, financial pressures of £25m have been identified, with income pressure of £37m, totalling £62m for the general fund alone
· Financial pressures for the HRA of £9m had been identified
· There had been two tranches of funding amounting to £18m
· It was expected to complete a third return this month
· There had been a falloff in the number of people able to pay Council Tax, resulting in a reduction in the Council’s tax base/ work was ongoing on this to show the impact beyond March 31, 2021.
· Fairer funding had been deferred
· Business rates retention had been deferred
· A spending review was unlikely
· Clarity was required from the Government on next year’s funding
· Closure of Leisure Centres had impact on income. It was not known when these would reopen. A modelling and forecasting measures was being considered
· May see an increase in the uptake of car parking as lockdown is eased
· Rent arrears had increased
· 2500 Council tax direct debits had been cancelled
· Significant increase in numbers claiming universal Credit
· Business rates grants had been paid out in good time
· In relation to commercial property estates some business were struggling and the council was working to support
· Much work done in relation to commercial waste portfolio
· In relation to cash flow the council was still in receipt of significant sums and monies were not expected to run out
· Investments of £112 had been made by the end of May
· It was now possible to borrow from other Local Authorities and PWLB continued to be a reliable source of income as was the municipal bond agency
· A report was to be made to cabinet setting out the financial position with a review of income and expenditure streams and any investments that were planned, looking at reserves and balances and any possible repurposing
· Work was ongoing with the External Auditors on accounts closure by 21 July / work was ongoing on the Pensions Fund
· £3m had been allocated for track and trace
4.1 The chair stated that he was reassured that the Council’s cash position was sound with work carried out to look at the medium term.
4.2 Councillor Rebecca Rennison told the Committee that the Council’s financial position had been reported to Council on two occasions. A deeper dive was to be carried out to look at impact and explore structural changes, considering what the timescale for these may be and considering mitigating actions and ways to manage the council’s finances. A working group with audit and scrutiny had been formed for this purpose. It was hope to submit a report on this to the July Cabinet meeting.
4.3 Councillor Patrick Spence asked for detail on the assumptions made to reach the figure of a shortfall of £37 in income. Ian Williams referred the Committee to the fact much of the Council’s funding came from income streams and that the impact had been acute in some streams. Impact on businesses rates and Council tax alone equated to £17.6m. Parking income had also been badly impacted as was income from leisure centres and activities in parks. Ian Williams agreed to circulate Cabinet reports with a detailed breakdown on income shortfall.
Action: Ian Williams
4.3 Councillor Gregory asked referred to new way of working by the Council an how innovations could be used to provide a different offer for residents, using open spaces, facilities for children and older people at this time.
Ian Williams told the Committee that work was ongoing to manage the workforce, gender pay gap, inclusivity. There was much work to ensure that the Council could reopen in a safe manner, ensuing staff working from home are supported. An intensive work programme was in place to assist with the next phase and how the council adapts to a new working environment with consideration being given to re-purposing other facilities to create more space for students.
4.4 Councillor Potter if the OECD report in May outlining the challenges in the economy and the impact on public finances had been considered. Councillor Rennison told the Committee that the levels of uncertainty in that report had been looked at in the overall forecasting. The Brexit implications would form part of this. The chair stressed the need to have forward forecast that have a broader range and to understand the uncertainty and the degree of uncertainty within these. He stated that the newly established working group would keep the Committee informed of progress.
RESOLVED to note the finance update.