Agenda item

Budget Update Report 2021/22

To consider and decide on the recommendations as set out in the attached report.

Decision:

RESOLVED – That Officers shall continue to work on delivering a balanced budget in line with the Budget Strategy and report back in December with proposals prior to public consultation on the draft budget.

 

 

REASON FOR DECISION:

To enable Directors and Heads of Service to continue the service planning process and to help develop proposals with their respective Portfolio Holder(s) for savings, changes to service delivery and optimise income. 

Minutes:

Lee Colyer, Director of Finance, Policy and Development introduced the report that provided an update to the budget projections for the 2021/22 budget and subsequent years.

 

Discussion and responses to Members questions included the following:

 

-       This was the second report in the process of setting the 2021/22 budget.

-       In the absence of Government financial information for next year, the projections had been made somewhat in a vacuum against the constantly fluid impact of the Pandemic.

-       The Council’s financial strategy, set at the beginning of the Pandemic continued to hold true whereby the Council would build up an evidence base each month to track the actual income expenditure outturns along with the monthly local economic data and evidence of Government support packages.

-       The Council was financially self sufficient and received no revenue support grant from the Government.

-       To function without Government support had meant the Council operated more as a business and generated more of its own income than many other Councils with which to fund its own local services.

-       Whilst the Pandemic had created some cost pressures, mostly around housing and community support, the most significant impact was the reduction of income from sales, fees and charges.

-       The Council experienced income losses that reached £1m per month in May, with a recovery as the economy opened up but then a reduction in September as health concerns returned.

-       At the time of writing the Report it was hoped the losses would be around £250k per month which accounted for the gross £3m annual reduction by March 2021. However the second national lockdown and the likelihood of further ad hoc restrictions was likely to be a feature for some time.  Whilst this would increase the losses from income, it was also more likely that Government would extend the compensation scheme for income loss into next year.

-       Locally and although from a very low base, unemployment had quadrupled.

-       The collection of Council Tax and Business Rates were both below target (although not as low as first feared).

-       The Government furlough scheme had now been extended to the end of the financial year.

-       One way the Council had been generating income was through the promotion of local economic growth and sharing in the proceeds of additional Businesses.  The scheme was expected to continue for a further year so may provide some help with which to help fund the Council’s Capital Programme next year.

-       Council Tax was currently modelled to increase by £5 a year and the Government expected this to happen in their assessment of the resources the Council had available

-       Whilst service efficiencies would continue to be sought the quantum of the budget gap for the next financial year of approximately £3.5m was such that to avoid drastic cuts to services at a time when residents were most reliant upon them, it was proposed to temporarily use Council reserves to balance the budget.

-       This could be afforded in the short term but when able to do so, reserves should be replenished.

-       The Government needed to deliver on its promises to support Local Councils.   Fortunately the Council entered the Pandemic in a healthy position with a balance budget, cash reserves and no external debt.

-       However the gravity of the situation was such that the Pandemic would result in fundamental changes to the economy  and to the Council’s income streams.  This would require the Council to review which services it could afford to deliver, how it worked and the cost and effectiveness of its large numbers of property assets. 

-       The update provided for the immediate attention to be focused on continuing to help the community and the economy through the Pandemic. 

 

RESOLVED – That Officers shall continue to work on delivering a balanced budget in line with the Budget Strategy and report back in December with proposals prior to public consultation on the draft budget.

 

 

REASON FOR DECISION:

To enable Directors and Heads of Service to continue the service planning process and to help develop proposals with their respective Portfolio Holder(s) for savings, changes to service delivery and optimise income. 

Supporting documents: