Agenda item

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

It was RESOLVED that:

a)    the revised financial impact of Covid-19 on the Council’s Medium Term Financial Strategy (MTFS) and the inclusion of these estimates and use of reserves and balances in the revised budget due be taken to full Council be noted; and

b)    a report on business support and economic recovery be considered by the Growth and Development Scrutiny Group.

The Portfolio Holder for Finance presented the report of the Executive Manager – Finance and Corporate Services providing an update on the budget position reported to Cabinet on 12 May 2020 of the projected impact of Covid-19.

The Portfolio Holder for Finance confirmed that this was the second report on the impact of Covid-19 on the Council’s budget and as expected figures were constantly changing, although not significantly.  Continued uncertainty was anticipated in relation to a possible second spike and to the speed of economic recovery.  Local policy decisions would also have a bearing on the budget, particularly the reintroduction of car parking charges and the reopening of leisure centres.  The Cabinet would continue to be updated at each meeting, with a revised budget reported to the Council meeting in September 2020.  Everyone was aware of the graveness of the situation, particularly for local businesses and communities and it was important that everyone worked together to ensure Rushcliffe’s remained a great place to live and work.

The Portfolio Holder for Finance welcomed the Central Government funding of £1.23m; however, it was clear even in the short term that it would be insufficient to meet the budget shortfall.  The budget gap was expected to be at least £2.87m, with the funding covering 43% of that.  In respect of Revenue Budget pressures, the loss of car parking income was highlighted, it was hoped that car parks would be reopened soon; although future usage could be impacted, particularly in the short term.  The report noted the loss of income from Development Control, Building Control and community events over the past four months, together with a loss of rental income from the Council’s tenants.  £1.45m costs had been incurred mainly from supporting Parkwood Leisure, the use of agency staff to support waste collection and additional accommodation to support the homeless.  Ongoing discussions were taking place with Parkwood on the short to medium term impact on the leisure position and the budget impact.  In respect of capital receipts, the timing and expected amount would differ from that anticipated before Covid-19.  The viability of existing projects would need to be reassessed, including the impact of the leisure contract and potential timings for the Bingham Hub.  There was ongoing uncertainty regarding the construction market; however it was hoped to have greater understanding of market conditions when the Council went out to tender for the Bingham Hub.  As of 24 May 2020, Council Tax receipts were reduced by £880k, which would cause a deficit in the collection fund, which would need to be recovered over the next two financial years.  Business Rates had been largely unaffected because of the significant relief granted to the sector; however, the situation would continue to change and need to be monitored.  The Council had reacted quickly to ensure that over £17m in Business Grants had been paid out to 88% of eligible businesses.  On 1 June 2020, the Council had launched its discretionary scheme, with 67 applications received and considered for a fund of £972k.  Given its discretionary nature, the scheme had created challenges in development and implementation, and staff were thanked for their hard work and dedication in dealing with this additional workload, which had been welcomed by the local business community.  The report referred to the work of the Council and its approach to assisting the recovery of the economy in Rushcliffe, and a report on business support and economic recovery would be submitted to the Growth and Development Scrutiny Group.  The Council had managed its resources well and held a healthy level of reserves, which enabled it to deal in the short to medium term with the economic crisis; however, the Council’s financial resilience going forward would be severely tested and would require a revised Medium Term Financial Strategy (MTFS) to deliver its corporate objectives, with a report planned for Council in September 2020.

In seconding the recommendation, Councillor Mason referred to the uncertain and challenging times ahead and the difficult decisions that would have to be made.  The Council was committed to moving forward and responding both quickly and flexibly to the evolving situation.   

Councillor Robinson reiterated previous comments and emphasised the importance of continued Government support for Councils and their partners in such unprecedented times.  As the revised budget would be considered in September 2020, it was hoped that by then income streams would have returned and be revitalised, along with capital receipts.  The Executive Manager for Finance and Corporate Services and his team were thanked for their hard work during such challenging times, and it was a great testament to the Council that it had faced the Covid-19 crisis in such a strong financial position.  The next few months would be crucial for the Council, with difficult decisions to be made and it was hoped to see some positive signs going forward as the Council continued to support local communities and businesses.

It was RESOLVED that:

a)     the revised financial impact of Covid-19 on the Council’s Medium Term Financial Strategy (MTFS) and the inclusion of these estimates and use of reserves and balances in the revised budget due be taken to full Council be noted; and

b)     a report on business support and economic recovery be considered by the Growth and Development Scrutiny Group.