Agenda item

The Executive RECOMMENDS 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.

40.1     Cllr Mark Merryweather gave a brief presentation to Members setting out the already challenging financial situation of the Council, and the impact of the Covid pandemic on the 2020/21 finances and the Medium Term Financial Plan. The revised budget projections set out in the agenda report showed a £6.6m adverse impact through a combination of direct costs, and loss of income, and consequential costs. The single biggest element was from the closure of the leisure centres, followed by loss of car park income. Taking account of confirmed government grants, £5.2m of budget mitigation was being proposed for Council approval comprising a number of revenue and capital cost savings measures and a package of reserve movements. The risks and impacts arising from these measures were set out in the report.

40.2     Cllr Merryweather concluded his presentation by thanking the Council’s officers who had tackled the serious challenge of re-balancing the budget alongside their normal duties and additional responsibilities including administering the business grant schemes that had done so much to support businesses in Waverley. He also thanked other Members, including those on the Value for Money Overview & Scrutiny Committee, for the valuable and constructive contributions throughout this period.

40.3     Cllr Peter Martin responded to confirm that the Value for Money Overview & Scrutiny Committee had scrutinised the contingency budget very carefully at their meeting on 13 July, and recognised the very difficult circumstances and large number of uncertainties that make it hard for the Executive to plan going forward. The Committee was broadly satisfied that within the context described by the Portfolio Holder, a good job had been done thus far. Cllr Martin was pleased to see that a number of the recommendations and observations made by the Committee had been accepted and incorporated into the plan, including getting the leisure centres open as quickly as possible and protecting the balance sheet going forward. The Conservative Group were also in broad support of the approach, and Cllr Martin confirmed that he would be voting in favour of the recommendations.

40.4     Cllr Hyman also stated his support for the recommendations, but noted that many businesses in a similar situation were cutting costs to the bare minimum and he was concerned that residents might perceive the council’s approach as putting off difficult decisions. Cllr Foryszewski broadly supported the recommendations, but voiced concerns about the recommendation in the Exempt Annexe relating to the financial support for Places Leisure going forward. She was concerned about the future viability of the leisure centres under the new operating arrangements. This was especially so for Cranleigh leisure centre which was no long fit for purpose and needed significant long-term investment. Without investment, the cost of re-opening could be for nothing in the long term.

40.5     Cllr Follows responded to Cllr Hyman’s observations about whether the council should be cutting costs more radically, to point out that Waverley was a service provider, and services were provided by staff. Reducing staff would impact directly on services provided to residents; and it was a disservice to Waverley staff who had worked so hard over recent months to provide additional services in such difficult circumstances to immediately put forward this option. Cllr Merryweather had gone out of his way to preserve services at a time when they were probably needed more than ever, not less. The Portfolio Holder and Finance Team had done a magnificent job in the face of huge uncertainty about how much funding might be coming from the government to reach the very reasonable recommendations now before Council.

40.6     In response to a question from Cllr Edmonds, Cllr Merryweather confirmed that the issue of whether Places Leisure had business interruption insurance had been examined exhaustively; but the closure of the leisure centres had been legislated by government which forced Places Leisure and Waverley to renegotiate specific terms in the contract.

40.7     In summing up, the Leader thanked Members for their support, whilst sharing the concerns voiced about the uncertain future. However, it was important that the leisure centres were able to open and allow residents to return to some degree of normality. Given the significance of the contingency budget, the Leader called for a recorded vote, which was supported by Cllrs Follows, Williams, Wilson, Knowles and Cosser.

40.8     A recorded vote was taken on the four recommendations together, and

Council RESOLVED:

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.

For: 49

Cllrs Brian Adams, Christine Baker, David Beaman, Roger Blishen, Peter Clark, Carole Cockburn, Richard Cole, Steve Cosser, Martin D’Arcy, Jerome Davidson, Kevin Deanus, Simon Dear, Sally Dickson, Patricia Ellis, David Else, Jenny Else, Paul Follows, Mary Foryszewski, Maxine Gale, Michael Goodridge, John Gray, Joan Heagin, Val Henry, Chris Howard, Daniel Hunt, Jerry Hyman, Peter Isherwood, Jacquie Keen, Robert Knowles, Andy MacLeod, Peter Martin, Mark  Merryweather, Kika Mirylees, Stephen Mulliner, John Neale, Peter Nicholson, Nick Palmer, Julia Potts, Ruth Reed, Paul Rivers, Penny Rivers, John Robini, Anne-Marie Rosoman, Trevor Sadler, Richard Seaborne, Liz Townsend, John Ward, Steve Williams, George Wilson

Abstentions: 0

Against: 1

Cllr Brian Edmonds