Report summarising the latest position on the 2020/21 Budget framework as a result of the financial impact of the Covid-19 crisis and financial information up to and including 30 June 2020
The Cabinet Member for Finance and Resources introduced the report to Members explaining that this was the third report that provided the latest financial position for 2020/2021 with regard to the Budget framework and the financial impact from Covid-19.
The report presented an updated deficit forecast of £2.2 million, representing a reduction from the previously reported figure. The forecast included Government grants, which reduced the forecast overspend for the net cost of services from £3.9 million.
The Council had also received additional income, which reduced the forecast overspend. This included a letting opportunity at St Peter’s Hill, £700,000 savings related to supplies and services, income received for employees who had been furloughed, a £100,000 saving from the Gravity Fields Festival and business rate savings in respect of leisure centres. The salary vacancy was below target by £140,000.
Income had been impacted by Covid-19 with a £915,000 shortfall that resulted in a reduction in budgets and these were being continuously reviewed.
Capital programme schemes were under review to identify any that could be deferred or postponed to ease pressure on financing. There was an improved surplus position on the HRA due to delay in repairs because of Covid-19.
The Council had received £194,000 as part of a Government support package. There was also an indication that the Council would receive additional funding for unrecoverable costs. This figure was not yet known as further information was awaited. The Government had also made provision for the phased repayment of the collection fund deficit, which enabled payment over three years.
Cash flow modelling was reviewed daily and showed a positive position when benchmarked against other authorities. The collection rate for council tax and business rates was slightly lower compared to the same time last year. Rent collection rates were slightly improved on the same point in 2019/20, however it was noted that the number of rent weeks in a year had an impact.
The Cabinet Member for Finance and Resources notified Members that the amended budget would be presented to the Budget Overview and Scrutiny Committee on 26 August 2020, Cabinet on 8 September 2020 and Council on 17 September 2020.
Whilst praising the presentation and the report provided, a Member questioned whether there was any indication as to when funds and details of the Government’s funding scheme for local authorities would be known. The Head of Finance stated that there was no indication when the information would be made available, however the Council was able to model on anticipated funding as well as what was expected to be included. This was subject to sensitivity analysis. Estimates needed to be cautious, because the long-term recover was unknown.
A Member warned of the impact on council tax collection and increased unemployment in the context of economic recovery and the Bank of England warning of a severe recession.
Members noted that previous iterations of the report had included a risk register, and requested it be reintroduced for future versions of the report. The Cabinet Member for Finance and Resources confirmed that a risk register would be included in the report, which would be presented at the Committee’s next scheduled meeting on 22 September 2020.
Include the risk register in future versions of the report.
The Committee expressed their thanks for the level of details provided.