(NOTE: A copy of the report that was considered by the Strategy and Resources Committee on 1 September 2020 is attached).
Council considered the Performance and Financial Management report for Quarter 1 of 2020/21 to the Strategy and Resources Committee on 1 September 2020 (circulated previously).
Report by the Head of Resources to the Strategy and Resources Committee on 1st September 2020 (attached) and minute extract of the Strategy and Resources Committee held on 1st September 2020 (attached).
The Committee considered a report to the Strategy and Resources Committee on 1st September 2020 by the Head of Resources together with a minute extract (circulated previously) regarding the Performance and Financial Management Quarter 1 of 2020-21.
The Head of Resources advised that the report had already been subject to consideration by the Strategy and Resources Committee on 1st September 2020.
He highlighted the following points to the Committee:
· As at 30th June 2020 the latest forecast net position was £13,765,000 which produced a forecasted budget deficit of £385,000.
· Central Government had announced three tranches of funding for Local Authorities and an additional scheme for recompense towards lost income and fees, e.g. from car parks. Support from the Government would be 75% of any lost income, once the Council had incurred the first 5% variance.
· The Council had claimed £160,000 from the Government’s Furlough Scheme. This had been for those staff unable to work. Staff affected had included those in the Car Parks and Pannier Market teams.
· A £170,000 New Burdens grant had been received towards the administration cost involved with the business grants.
· It was anticipated that there would be a reduction in the Council Tax and Business Rates incomes for 2020-21 as a result of Covid-19. Any resulting effects on the Collection Fund income would not have an impact on finances until later years.
· The Government would be allowing Local Authorities to spread any Council Tax and Business Rate losses over the next three years. The Financial Team was currently looking at the implications of this action. The information about future government funding was required so that it could be planned for and built in to future financial plans over the next three financial years.
· The Council had reserves but continued use of them could affect the long-term solvency of the Authority.
· Reserves at the end of the financial year were forecasted at £1.16million, with a borrowing requirement reduced to £500,000.
In response to a question from Councillor Mack regarding the importance of commercialisation, the Head of Resources confirmed that progress had been made into researching extending commercial activity at the Authority. The key area was to introduce new methods of income generation rather than purely by increasing fees and charges. Existing opportunities for income generation would need to be maximised, such as commercial waste services. It was outlined that findings and a report would be brought forward to Members at a future date.
In response to questions from Councillor Luggar, the Head of Resources confirmed that:
· The purchase of properties for temporary accommodation had helped to prevent higher costs being incurred if alternative housing had to be arranged for many of the families. Approximately £20,000 of savings had been achieved by each accommodation unit when compared to the alternative provision which would have been to place families into temporary accommodation such as Bed and Breakfast placements. Demand for those properties exceeded the supply and the Council hoped to acquire more in the future.
· The Authority had ... view the full minutes text for item 61
Report by Head of Resources (attached).
The Committee considered a report by the Head of Resources (circulated previously) regarding the Performance and Financial Management Quarter 1 of 2020/21.
The Accountancy Services Manager highlighted the following:
· As at 30th June 2020, the latest forecast net budget was £13.765 million with the budget deficit estimated at £385,000. The income streams for the Council had been affected due to the Covid-19 pandemic in quarter 1 and would continue to effect the rest of the financial year. The forecast salary vacancy savings looked to be on target with £194,000 of the £200,000 already identified. Additional outgoing costs incurred, in relation to the Covid-19 situation, were brought about by the need for the provision of temporary accommodation, agency staff to support the Works and Recycling team and supporting the local community. It was anticipated that the recovery of Business Rates and Council Tax would drop, however, none had been reported yet. Deficits of this income could be spread over the next three financial years. The Council had earmarked reserves and a general fund balance to call on to help mitigate economic impact but this would have long term implications for the Council. Appendix A showed the estimated deficit for the year 2019/20. Central Government would be paying 75% of lost income after the Council had incurred the first 5% variance and the technical guidance for this had been received last week. In recognition of the effects of the pandemic the Council was planning to reset its Medium Term Financial Strategy. Regular monitoring would take place with updates reported back to this Committee.
· Appendix B detailed the movements to and from earmarked reserves in 2020/21.
· Appendix C detailed the Strategic Contingency Reserve
· Appendix D detailed the Capital Programme. As at 30th June 2020 the actual spend was £692,000. A revised capital programme had been previously approved by the Strategy and Resources Committee, on 3rd August 2020 this figure was £13,317,267. The overall capital spend programme was from 2020/21 to 2022/23 and stood at £29,544,997.
· Appendix E showed all service plans across the Council which had been authorised or cancelled by the Senior Management Team.
In response to questions, the Accountancy Services Manager advised that:
· In relation to the calculation of the Capital Grants there would be some variations. Income streams had been calculated and he was confident these had been calculated in line with the new guidance and any significant variance to the figures would be reported back to this Committee.
· The deficit figure of £385,000 was accumulated from Heads of Services and budget holders and it was not just based on Quarter 1 but estimated to take account of the whole year.
· The Managers, Budget Holders and Heads of Service had worked with the Head of Resources and with his advice and guidance the forecast figures had been obtained. Managers were not left on their own and there was a consistent approach.
· Normal recovery of Council Tax had not been taking place during the Covid-19 crisis. Having discussed ... view the full minutes text for item 175