Agenda item

Performance and Financial Management Quarter 1 of 2020/21

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 £5m of earmarked reserves in addition to the £1.2m general fund reserve. The forecast budget deficit was £385,000. If the general fund reserve was used to cover the in-year deficit the Council would remain just above the minimum level of reserves allowed. The current level of general fund reserve was 9%.  The Head of Resources was of the opinion that to dip into those reserves should be a one-year option at most.


In response to a question from the Chair, the Head of Resources confirmed that:


·         The situation was changing daily. The key aim was to support businesses and retain those networks which had been established. As this was a tourist area this had been positive for some businesses recently but there was the added worry about the impact of the pandemic following the influx of visitors.

·         The Local Authority had received one of the largest allocations of business grant funding in Devon (at £51million).


RESOLVED, that the decisions and recommendations of the Strategy and Resources Committee be endorsed.



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