Agenda item

The report of the Executive Manager Finance and Corporate Services is attached.

It was RESOLVED that:

a) the financial impact of Covid-19 on the Council’s Medium Term Financial Strategy (MTFS) be noted and that a revised budget be supported and taken to Full Council once there is more certainty regarding the impact of lockdown and in particular the likely use of Reserves and Balances to meet the projected budget gap;

b) the position on both Council investments and the likelihood of a change in the Minimum Revenue Provision (MRP) calculation which will be reported to the Governance Scrutiny Group in the Annual Capital and Investment Report be noted; and

c) the Leader and Chief Executive be supported in making representations to Government and other interest groups to unlock further funding for the benefit of Rushcliffe’s community and its businesses.

The Portfolio Holder for Finance presented the report of the Executive Manager – Finance and Corporate Services outlining the budget position as a result of the Covid-19 pandemic.

The Portfolio Holder for Finance advised that the impact of Covid-19 on the Council’s budget would change as the Council was informed about further proposals to release lockdown, and it was intended to report the ongoing impact to Cabinet each month.  A revised budget would be presented to Council in September 2020, with Budget Workshops for all Councillors held earlier in September.  The impact had been significant for the Borough as a whole and the Council had welcomed Government support; however, that support would be insufficient, even in the short term to meet the budget shortfall.  For this financial year, the budget shortfall was expected to be between £2.5m and £4m.  Going forward, it was likely that there would be additional pressures on the budget from the Council’s Transformation and Capital Programmes.  The report referred to Revenue Budget pressures, which were clearly linked to losses of income and if that continued for the remainder of the year, the Council would see significant losses from car parking, Development Control, investment interest and loss of rental income from commercial properties.  The Council was also incurring additional costs, in particular to support Parkwood Leisure to ensure that the leisure centres were in a position to resume services once able to do so.  The report referred to the Council’s Capital Programme and two main risks; the potential shortfall and delay of capital receipts, and the requirement to reassess the viability of existing capital projects.  Treasury related issues would be reported in detail to the Governance Scrutiny Group.  Due to the likely impact on the Revenue Budget, there was scope to revise the Council’s Minimum Revenue Provision (MRP) in relation to the Arena and to release New Homes Bonus to support the budget in the medium term.  The report highlighted a number of the Council’s investments, which had lost capital value.  Those were long-term investments and it was hoped that their value would correct over time.  The impact on the collection of Council Tax and Business Rates was unknown and the Cabinet would receive a further update in June 2020.  Officers had worked extremely hard to ensure that Business Grants had been paid as soon as possible, with 1,395 businesses receiving approximately £17m, which was 83% of all eligible businesses in Rushcliffe.  The Council had received many grateful responses and all Cabinet members appreciated the hard work undertaken by employees, not just for this but also for all the work undertaken throughout the Borough.  It was important to note that over the years, the excellent stewardship of the Council’s finances had given a degree of protection against the economic consequences of Covid-19.  The financial resilience of the Council going forward would now be severely tested and would require a revised Medium Term Financial Strategy (MTFS) to deliver its corporate objectives.  Going forward difficult decisions would have to be made; however, the Council was confident that it had the ability to lead the Borough through the crisis.

In seconding the recommendation, Councillor Edyvean reiterated the thanks given to all employees for their hard work.  The importance of monitoring the impact of Covid-19 on Council budgets was noted, as was the need to look forward to how the Council could revitalise the prosperity of the Borough.

Councillor Robinson referred to the Business Grants and the decision of the Government to use Borough and District Councils to administer payments and it was a credit to Councils across the country that it had been achieved so efficiently.  Officers were again thanked for their efforts.  It was prudent and pragmatic that the Council reviewed its budget and that would be taken to Council in September 2020.

It was RESOLVED that:

a) the financial impact of Covid-19 on the Council’s Medium Term Financial Strategy (MTFS) be noted and that a revised budget be supported and taken to Full Council once there is more certainty regarding the impact of lockdown and in particular the likely use of Reserves and Balances to meet the projected budget gap;

b) the position on both Council investments and the likelihood of a change in the Minimum Revenue Provision (MRP) calculation which will be reported to the Governance Scrutiny Group in the Annual Capital and Investment Report be noted; and

c)   the Leader and Chief Executive be supported in making representations to Government and other interest groups to unlock further funding for the benefit of Rushcliffe’s community and its businesses.