Issue - meetings

This report sets out the financial impacts of Covid-19 on the Council’s revenue budgets. The Council is anticipating a £42.13m pressure on its revenue budget and £7.5m on the Collection Fund before government grant and the proposed financial recovery measures. The report sets out the gross impact of Covid-19 restrictions and social distancing measures and the planned mitigations to present a fully funded net budget position.

The Chair invited Councillor Richard Samuel to introduce the report.

Councillor Richard Samuel read out the following statement:

‘The COVID crisis has wreaked havoc across our economy and throughout our populations in the UK with this Council being no exception. So, just as businesses and households have to repair the damages to their finances, we have to do the same to ensure that we remain financially viable today, and ways ahead. Now. there are some who say that this shouldn't could been anticipated. However, those people are flying in the face of the facts globally no country, no government, a local administration, fully anticipated the scaling problem, and none was able to set aside funds to cover the current scale of the crisis. Those who make such arguments are seeking to make cheap, political capital, out of the misery of a truly global crisis. It could have been different if the UK acted more quickly, as countries such as New Zealand did well probably, but that's a debate for a different day.

Now, as members will know pressure has been building on the government to honour the commitments they gave at the start of the pandemic. And we have played our part in lobbying our special case for this little assistance. We are delighted that the detailed work we have carried out with government officials, finally appears to have paid off with the announcement of new assistance this morning by Robert Jenrick.

It is actually too early to interpret exactly what the additional local additional funding announcement means for the council and the detail is yet to be published. However, on the face of it, it seems that we are now more in the green scenario we originally planned, where budget reductions will still be required, but will be less severity yet it remains unlikely that all the losses that we have identified will be covered. And there will still be a need to reduce expenditure this year.

However, it was never the case that we should do nothing and rely on hope that at the end on finances would magically return to balance because income has returned to pre COVID levels, and our government has provided lots of unexpected funds. Well the choice we had was to take control of that situation and take decisive actions to secure our finances thus securing a quicker return to stability. It was never an option to do nothing.

I want to turn to the root of the difficulties faced by the Council because this is relevant in the light of today's announcement.

As members will know the council achieved the highest levels of externally generated income of all unitary councils in proportion to its budget. This means that our budget was one of the most exposed to reductions in income, and why we have had a particularly difficult position to deal with. And those income reductions can be exactly traced to the government's decision to lock down population thus choking off  ...  view the full minutes text for item 22

The Panel are asked to discuss this report prior to its consideration by the Cabinet on the 2^nd July 2020 meeting. It presents the Covid-19 2020/21 Financial Recovery Cabinet report.

The Chief Executive introduced this report to the Panel. He stated that the Plan was the culmination of two months of focussed work. He explained that the due to the pandemic there had been an increase to the Council’s expenditure and a significant decrease to its income.

He said that alongside dealing with the impact of the pandemic the Council obviously has a responsibility to look after its finances. He added that if a second spike were to occur then it was likely that new advice would need to be submitted to the Cabinet alongside a new plan. He stated it was important to update Councillors and members of the public as much as possible.

The Director of Finance & S151 Officer highlighted the following points from within the report.

·  As a result of Covid-19 the 2020/21 revenue budget has an unprecedented challenge from loss of commercial income resulting in a forecast deficit before mitigations and government grant of £42.13m. The full implementation of the financial recovery plans (£20.7m) and use of unrestricted Covid-19 grant (£10m) will result in a projected deficit of £11.43m which will need to be funded from the use of reserves.

·  The adverse impact on the Council’s revenue budget has arisen from the urgent actions required to comply with the government lockdown which included the closure of the Roman Baths. To give context the income from our Heritage and Parking Services for April and May was £0.259m compared to £5.866m for the same period last year, a reduction of £5.607m; this equates to a loss of £91,918 a day which is required to fund Council Services. This alongside expenditure pressures which include supplier relief such as supporting the social care market and new unplanned expenditure, for example the sourcing of Personal Protective Equipment (PPE).

·  The plans set out in this paper require use of the Councils Corporate reserves held for financial planning and risk. The forecast £11.43m deficit after revenue mitigations and government Covid-19 revenue grants will require £2.43m use of Revenue Budget Contingency and £4m of the Financial Planning reserve. The remainder will require £5m drawdown of the general un-earmarked reserves leaving the Council’s balance at 7.2%, this is a satisfactory balance that is over 2% higher than the average general unearmarked reserves held in B&NES nearest neighbours Unitary Authority group.

·  The Capital Programme has been reviewed to revise scheme delivery timetable’s considering Covid-19, alongside identifying schemes that can be rephased to create a one-off revenue saving through reduced borrowing costs. The review has been led by the Capital Strategy Group and identified c£3m of in year revenue savings, whilst ensuring high profile and priority schemes are continued.

·  The initial forecast for potential impact on the income from Council Tax due to the impacts of Covid-19 affecting resident’s ability to pay and the increase in the number of Local Council Tax Support Scheme (LCTSS) claimants is £6 million. The forecast is based on reductions of around 10% in Council Tax income per  ...  view the full minutes text for item 9