Issue - meetings

The COVID-19 emergency continues.  This report outlines the latest projections of income and expenditure against budget in 2020/21 and highlights the significant projected net adverse variances from budget which arise as a result of the known impacts of the COVID-19 pandemic on the Council’s services and finances. The extent of any further funding from government is currently unknown and therefore this report presents contingency proposals to address the latest projected budget shortfall on an emergency basis. These proposals have been prepared jointly by officers and the Executive and have been considered by the Value for Money Overview and Scrutiny Committee in pre-decision scrutiny ahead of the Executive meeting and the special Council meeting in early August.

Recommendations

That the Executive recommends to Council:

1.    To acknowledge the forecast variations from the 2020/21 general fund budget listed in annexe 1 and approve the mitigation measures set out in annexe 2 including revisions to approved budgets, the cancellation of approved contributions to reserves and the drawing down of earmarked reserves.

2.    That in the event of additional government grant being secured and/or the overall projection set out in annexe 1 being more favourable than forecast, the net budget surplus arising from this accrues to the business rate equalisation fund, property investment fund and working balance.

3.    That a full revision of the approved Medium Term Financial Plan is undertaken which will assess the adequacy of the contingency budget, consider the other options identified but not included at value at this stage, and the wider economic factors – to be reported to Council no later than its December meeting.

4.    That in relation to the Leisure Centre issues, the recommendations included in the Exempt annexe be approved.

16.1    Cllr Mark Merryweather introduced the report that set out the severe financial impact on the Council of the COVID-19 pandemic, and the measures proposed to address the £6.6m shortfall in the 2020/21 General Fund budget that had arisen. The budget shortfall was largely due to loss of income from council car parks, and from closure of the leisure centres.

16.2    In addition to government grants received totalling £1.4m, the proposed mitigation comprised reduced in-year spending of £2.3m and drawdown from reserves of £2.9m. Further options for savings had been identified but these had not been developed sufficiently to ‘bank’ the savings at this time. The proposals to balance the 2020/21 GF budget had been presented to Members in a briefing, and then scrutinised by the Value for Money Overview & Scrutiny Committee on 13 July. The budget gap remained at £6.6m as presented at that time, and there were no changes in the underlying assumptions. There was still a lack of detail around how much further funding would be available from the government to compensate for lost income.

16.3    Cllr Merryweather concluded his presentation by commending officers in the Council’s Finance Team for their work in developing the revised budget, as well as dealing with the additional work load of administering the government’s business grant schemes; and also the constructive and helpful contributions of councillors and especially the Value for Money Overview & Scrutiny Committee.

16.4    Cllr Julia Potts spoke to emphasise the importance of reaching a swift resolution to the negotiations with Places Leisure, so that the leisure centres could re-open as soon as possible in order to stem the loss of income and for the health and well-being of Waverley residents.

16.5    The Executive RESOLVED to recommend to Council:

1.    That Council acknowledges the forecast variations from the 2020/21 general fund budget listed in Annexe 1 and approves the mitigation measures set out in Annexe 2 including revisions to approved budgets, the cancellation of approved contributions to reserves and the drawing down of earmarked reserves.

2.    That in the event of additional government grant being secured and/or the overall projection set out in Annexe 1 being more favourable than forecast, the net budget surplus arising from this accrues to the business rate equalisation fund, property investment fund and working balance.

3.    That a full revision of the approved Medium Term Financial Plan is undertaken which will assess the adequacy of the contingency budget, consider the other options identified but not included at value at this stage, and the wider economic factors – to be reported to Council no later than its December meeting.

4.    That in relation to the Leisure Centre issues, the recommendations included in the Exempt Annexe be approved.