Agenda item

RESOLVED: To note the update on the Council’s financial position.

4.1  The Chair introduced the item, stating that the Committee would need to be assured that that there were no immediate concerns in regard to the Councils’ financial and its ability to continue with its activities and that there were plans in place to cope with the complex issues that will arise from budget changes. He said that the Audit Committee should be kept informed of this work and involved in the process. Three areas were to be focused on:

 

·  The position in the current year in regard to the General Fund and the Housing Revenue Account

·  Next year’s budget and the priorities emerging and numbers of priorities to ascertain the scale of the challenge

·  The Executive response and plans put in place to cope with challenges

 

4.2  Ian Williams presented to the Committee on the overall financial position, as follows:

 

·  A third tranche of government funding amounting to £3.5m

·  Compensation Scheme announced for loss of income with the first 15% Local Authorities ow risk

·  Government priority to apply collection fund deficits in particular to Council tax a business rates

·  Government has suggested that deficits can be dealt with equally over three years

·  A shortfall of approximately 9m for the general fund

·  Pressure of 8m on the Housing Revenue Account

·  Work was ongoing to mitigate shortfalls

 

 

4.3  The Chair asked if the amount of £1.9m was an additional budget pressure and if it included SEND. Ian Williams confirmed that this amount did not include SEND. He told the Committee that the current financial position eroded the Council’s ability to be flexible in its activities and tightened the ability to invest. Work was underway to cut back costs for example in the agency spend budget. The Capital Programme was being reviewed also, for instance to slow down some schemes.

 

4.4  Councillor Lynch asked for an update on workforce at the council given changing circumstances, in particular in relation to redeployment and recruitment.  Ian Williams confirmed that the Council was looking at opportunities to repurpose and redefine roles with large numbers of staff working from home. The staff survey demonstrated that many staff considered that they worked more effectively from home. All Call Centres had been consolidated into one. Consideration was being given to how the corporate estates are used.  He considered that the Audit Committee could have involvement in the process. Councillor Rebecca Rennison confirmed that staff would be consulted on any staffing changes that were carried out and confirmed the Council’s commitment to its staff. She told the Committee that the reporting on the overall financial position was a transparent process. The Council was still learning on this, in particular in relation to the impact on the Council’s income and reports back would be made on this.

 

4.5  Ian Williams told the Committee that work was underway on delegation levels, tightening up on the general control environment.

 

4.6  The Chair asked that an update on the overall financial position be added to the agenda for the September meeting of the Committee.

 

  Action: Ian Williams.

 

4. 7  Ian Williams reported on the medium term forecast:

 

·  There was to be a 2020 spending review to run for three years in relation to revenue spend and four years for capital spend. There are opportunities for the Council to submit representations

·  There is to be a call for evidence on the business rate review with a revaluation to better reflect the Covid-19 environment

·  The Council awarded business rates relief

·  Even with an increase in Council tax of 4% the Council would need £32/33m for nest year

·  Pre-Covid forecast of £13m

·  Fairer funding would be implements in the next financial year

·  People paying Council Tax in cash are now able to get out to do so

·  There was improved engagement

·  The New Homes bonus will come to an end or be re-focused

 

4.8  In response to a question from the Chair, Ian Williams reported on the current pressures to the HRA with a deficit of £8m. There had been a loss of rental income and work was ongoing with housing and IT on this. Ian Williams would make a more detailed update on the HRA to the September meeting of the Committee, including on the interface between Universal Credit and rental payments and how any gap will be dealt with.

 

  Action: Ian Williams 

 

4.9  Councillor Anna Lynch stated that the evictions ban would be lifted and what plans were in place in relation to this. She said that some residents may not have been paying their rent and whether there was capacity to provide emergency homes for these residents.  Councillor Rebecca Rennison stated that it was considered that the eviction scheme should be extended for tenants. She said that the Government had set the Local Government housing allowance at 30% of medium rent. The Council could also assist with discretionary housing payments. The Council was encouraging tenants who were struggling to pay their rent to engage with the Council. A campaign was underway to ensure that the Housing Benefit for the housing rental sector was returned to a level where people could afford to rent in the Borough.

 

 

 

4.10  Ian Williams told the Committee that there was much uncertaincy in relation to the revised medium term forecast beyond the next financial year.

 

·  Key Policy initiatives were emanating from Central Government and work was required in relation to health and social care.

·  It was likely that fairer funding would be phased in.

·  Consideration was being given to the impact of the collection fund deficit

·  Even with a 4% increase in Council Tax that yield from it may be lower than it is expected to collect for this financial year

·  Income streams continued and much money was being collected

·  Significant sums were being paid from central government

·  £85m liquid cash from various investments

·  Continuing to look at sources of borrowing

 

4.11   Ian Williams reported on next steps:

 

·  Work was underway on the use of agency staff

·  Review of vacant posts

·  Repurposing roles is necessary

·  Reviewing capital schemes

·  Bearing down on expenditure forecasts to mitigate loss of income.

·  The importance of having staff and residents engagement

·  Positive work was being carried out the Audit/ Scrutiny/ Executive Working Group

 

4.12   The Chair reported that he was reassured on the cash position of the Council and that steps had been taken to ensure that there were no immediate issues around solvency. He said that further deeper needs had been uncovered with less resources. He referred to the importance of the Audit/ Executive oversight into the medium term financial position.

 

4.13  Councillor Rennison confirmed the importance of working with Audit and Scrutiny on the Council’s financial position identifying any issues earlier on and have effective oversight of the budget position.  The priority was to do what benefits resident the most.

 

 

 

 

 

 

 

 

 

RESOLVED: To note the update on the Council’s financial position.