The committee received the report of the Section Head – Financial Planning and Analysis.  The report informed the Finance Scrutiny Committee of the Council’s 2020/21 financial position at the end of July 2020 (Period 4).  The Section Head – Financial Planning and Analysis introduced the report and advised that this was the first financial digest in the current financial year.  He advised how the digest compared the latest budget for 2020/21 approved by Council on 14 July, which took account of the impact the Covid-19 pandemic had on finances, with the forecast outturn.

The Section Head – Financial Planning and Analysis highlighted the key areas, in particular he explained:

·        That the 2020/21 forecast outturn was estimated to be £17.452m. This gave a favourable variance of £0.057m, when compared to the latest budget of £17.509m.

·        How the Covid-19 pandemic had resulted in a significant loss of income to the council from the leisure provider SLM and of the financial support being provided to them by WBC; which would be recovered in due course.  This position reflected similar circumstances with other councils across the country.

·        The impact of the national pay award of 2.75% for council staff as compared to an award of 2.00% that had been anticipated.

·        The government’s income guarantee scheme with estimated funding of £1m being provided to the Council; and to be received in three instalments.

·        That the figure of 11% of staff vacancies may seem a little high.  However, some positions were being filled by consultants and temporary staff.  In other instances positions were being left open so as to make savings.

·        That Council reserves were in a healthy position with only £3.5m being utilised out of the total reserves of £22m.

·        In terms of capital, services were forecasting an outturn position of £125.293m resulting in a variance of £1.005m which would be funded from the enterprise grant.

·        The financial risks appertaining to the Covid-19 pandemic including issues relating to temporary accommodation, council tax revenues, business rates and commercial rents.  The impact of interest rates being reduced from 0.25% to 0.10% on short term investments was also explained. 

The Section Head – Financial Planning and Analysis concluded that the council was able to meet the Covid-19 commitments but with further variances possible dependent on how the pandemic developed.

The committee thanked the Section Head – Financial Planning and Analysis for the comprehensive report and discussed issues in relation to commercial income, capital investments and temporary housing.  In response to a question from members, the Section Head – Financial Planning and Analysis advised that monies being provided to Hart Homes would be repaid and with interest being charged.

Members discussed the impact of unemployment on the economy and how council tax revenues may be effected.  In response to a related question from members, the Section Head – Financial Planning and Analysis provided reassurance that the council’s recovery fund could be used to help mitigate any negative consequences.  The Interim Head of Finance added that government support was available to some unemployed people to help with council tax bills.

Members talked about the impact on hospitality and retail as a result of the Covid-19 pandemic.  The Section Head – Financial Planning and Analysis advised that the council was concerned about the implications for the High Street; with work being undertaken with Intu and the BID to encourage footfall and to promote the town.  Councillor Watkin, as portfolio holder, agreed to inquire of other district councils as to what initiatives may be being undertaken elsewhere.

RESOLVED –

1.      to consider the 2020/21 Finance Digest as shown in Annex A, and note both the revenue and capital forecast outturn positions.

2.      make any recommendations to Cabinet/Council.