This report is due to considered at Cabinet on 6 July 2020, Cabinet’s recommendations to Council will be forwarded as soon as possible.

Council received the report of the Director of Finance which had been considered by Cabinet on 6 July.  An extract of the Cabinet minutes had been published as part of the supplementary agenda. In addition an addendum to the budget had been published relating to the contract with SLM.

The report outlined the significant impact of Covid-19 and the subsequent lockdown on the finances of the council both in terms of additional expenditure and reductions in income levels.  The report set out the latest forecast along with proposed actions to rebalance the budget and fund recovery activity during the remainder of the year.

RESOLVED –

That council:

1.      Notes the financial impact of Covid-19 and the work being done to balance the budget.

2.      Authorises the Director of Finance to make the necessary adjustments to individual budgets to reflect the expenditure and loss of income arising from Covid-19 contained in the report, including the expenditure savings set out in Appendix 1 and the capital programme changes set out in Appendix 2.

3.      Agrees the use of Earmarked Reserves as set out in Appendix 3 in order to create a Recovery Fund and that approval of expenditure from the Fund be delegated to the Managing Director in consultation with the Mayor.

4.      That Council delegate to the Director of Finance, in consultation with the Mayor, the authority to authorise the variation to the SLM contract and amend the budget accordingly.

Report of the Director of Finance

RESOLVED –

1.         that the financial impact of Covid-19 and the work being done to balance the budget be noted.

2.         that Cabinet recommends to Council that the Director of Finance be authorised to make the necessary adjustments to individual budgets to reflect the expenditure and loss of income arising from Covid-19 contained in the report, including the expenditure savings set out in Appendix 1 and the capital programme changes set out in Appendix 2.

3.         that Cabinet recommends to Council the use of Earmarked Reserves as set out in Appendix 3 in order to create a Recovery Fund and that Council delegates the approval of expenditure from the Fund to the Managing Director in consultation with the Mayor.

Please note this decision is not eligible for call-in as it is due to be considered at Council on 14 July 2020.

Cabinet received a report of the Director of Finance setting out the latest forecast of the impact of Covid-19 on the council’s finances.  It also set out proposed actions to rebalance the budget and fund recovery activity during the remainder of the year.

Councillor Watkin introduced the report.  He said that the version before Cabinet was slightly different to the one presented to Finance Scrutiny Committee.  He explained the projected loss of income and increase in costs.  The officers had identified savings to put against the net increase.  The shortfall of £1 million would be taken from the economic reserve.

The Mayor noted that it was an evolving situation and the council was still waiting to hear the details of the Government’s announcement made the previous week.

Councillor Turmaine, Chair of Finance Scrutiny Committee, commented that the scrutiny committee had received the budget report.  It had been recognised the significant impact Covid-19 had had on the council’s finances.  The scrutiny committee would be closely monitoring the budget over the coming year.

The Director of Finance advised that there were two key risks that had still to be considered; financial implications related to the leisure centres and commercial income.  The council had started to receive June quarter rents, however some had approached the council to ask for rephrasing.

Councillor Bell thanked the Director of Finance for her response to his email.  He enquired when officers would have an indication of the shortfall from Council Tax collection.  In addition he asked how the money added to the recovery fund would be spent.

The Director of Finance advised that she was aware people had requested changing payment dates.  Once the statistics for June had been collated officers would have a better understanding.  In respect of business rates there had been an impact in April but it was slowly recovering.  However, she cautioned members that it may be some time before the council knew the full impact.

The Managing Director explained that £1.2 million added to the recovery reserve would support activities set out in the Road to Renewal item, with a focus on our businesses and community.  

RESOLVED –

1.         that the financial impact of Covid-19 and the work being done to balance the budget be noted.

2.         that Cabinet recommends to Council that the Director of Finance be authorised to make the necessary adjustments to individual budgets to reflect the expenditure and loss of income arising from Covid-19 contained in the report, including the expenditure savings set out in Appendix 1 and the capital programme changes set out in Appendix 2.

3.         that Cabinet recommends to Council the use of Earmarked Reserves as set out in Appendix 3 in order to create a Recovery Fund and that Council delegates the approval of expenditure from the Fund to the Managing Director in consultation with the Mayor.