Agenda item

Summary:

Options considered:

This report follows the previous COVID-19 financial update provided to Members in May, at which time a net budget deficit of c£1m was being forecast for the 2020/21 financial year. The anticipated year end deficit is now forecast to have reduced significantly from the previous report to around £0.4m although it should be noted this is still based on a number of assumptions about future funding and income pressures and assumptions regarding further government support which are discussed in more detail within the body of the report.

This second report provides a further update and follows the government announcement made on 2 July in respect of additional support towards lost income. It contains high level proposals for revising the 2020/21 budget to ensure that budget monitoring for the remainder of the year is meaningful, whilst also considering the impact on the Council’s medium term financial position.

The coronavirus COVID-19 pandemic continues to represent a significant challenge for the District Council which will continue to impact on the Council’s resources and budget during 2020-21 and future years.

This report sets out the current high level forecasts relating to the COVID-19 pandemic taking account of the latest central government support package. There are a number of options considered based on the recommendations made within the previous report in respect of capital resources, budget re-prioritisation, savings and reserves.

Conclusions:

The country continues to face an unprecedented public health crisis which will have impacts on the Council’s expenditure and income during the current financial year and future budgets It will continue to be important to continue to engage with Government, MPs and other stakeholders to campaign for adequate and sustainable funding for the District so that we can continue to deliver vital services to residents, businesses and visitors and this includes the current year and beyond.

The current pandemic demands very different ways of working and will require ongoing review and consideration of current and future priorities as well as different and innovative service delivery models. Looking beyond the immediate impacts, the overall level of uncertainty means the financial environment remains extremely challenging for the foreseeable future, none of which is helped by the ongoing delays to the various local government funding reviews. The assumptions upon which both the Medium Term Financial Strategy (MTFS) and the 2020/21 budget are based have been significantly undermined by the current crisis.

The current projected budget position (c£0.4m deficit 2020/21) is constantly changing and therefore the high level projections contained within this report must be seen in this context and could be subject to significant change depending on further announcements over the coming months. The report contains high level proposals for revising the 2020/21 budget to ensure that budget monitoring for the remainder of the year is meaningful.

Recommendations:

Reasons for

Recommendations:

It is recommended that Cabinet note and agree:

1.              The current package of financial support being provided to the Council by the government to support its response to COVID-19 and the continued importance of    central government lobbying for further additional financial support;

2.              The updated forecast cost and income pressures being faced by the Council and the extent to which they exceed the available government funding and therefore the requirement for any deficit to be funded from alternative Council resources;

3.              The proposals for revising the budget at the current time (and the one-off costs to be funded from reserves) to ensure that budget monitoring for the remainder of the year is meaningful, including funding any year end deficit from the Property Reserve (£0.4m);

4.              The various caveats and risks associated with the current forecasts and;

5.              The proposals in respect of updating the Medium Term Financial Strategy (MTFS) and the financial planning framework for the 2021/22 budget.

To update Members in respect of the impact of COVID-19 on the Council’s budget and resource position for 2020/21 and indeed future years.

Cabinet Member(s) Cllr Eric Seward

Ward(s) affected

All