Agenda item

To receive a report from the Head of Finance and Property on the revised Medium Term Financial Plan.

Following on from the Contingency Revised Budget agreed at Full Council in August, a commitment was made to undertake an update to the Medium Term Financial Plan (MTFP) including a review of the longer-term effect of the pandemic on the Council’s future financial resilience, taking account of the wider economic conditions. It was agreed that this should be reported to Council no later than its December meeting.

Recommendation

That the Value For Money Overview and Scrutiny Committee considers the updated Medium Term Financial Plan projections and makes comments and observations to the Executive ahead of consideration by Council in December

This agenda item was introduced by the Head of Finance and Property. 

A contingency budget was approved by Full Council in August 2020 due to the ongoing impact of Covid-19 although it could not solve the funding problems caused by the pandemic.

Annexe 1 of the documents presented showed the budget that was approved in February 2020 prior to the impact of the Covid-19 pandemic being felt.  Annexe 2 showed the contingency budget.

The Portfolio Holder for Finance, Assets and Commercial Services showed a presentation on the financial pressures facing the Council.  The presentation considered the external factors the Council had to deal with and the measures taken to address these.

As a result of the Covid-19 pandemic the Council had experienced a decline in business rates and cost cutting had been necessary.  There had also been a loss in revenue from leisure centres and car parks.  The Council had drawn down on reserves in this financial year in order to meet the shortfall.

There was a slide which showed shortfall compared to the original budget.  The Council would face a £2.8 million shortfall due to Covid in 2021/22.  Income Volatility Provision due to Covid would start in 2021/22 and there would be £1 million to last the next four years.

There was an unresolved shortfall for the next four years as fees, charges and rental income was reduced.  Leisure centres and car parks were still badly affected.   In a normal year the leisure centres generated an income of £500,000.  This year there would be no income.  There was a lot of uncertainty surrounding help from the government although government grants had increased slightly.

There were a number of questions from Councillors around staffing costs.  The Strategic Directors Annie Righton and Graeme Clark explained that there were two major Council Projects at present – the Business Transformation Project and the Recovery, Change and Transformation Project which included a look at where the workforce worked from.  The Management Board were looking at how jobs needed to be done in future when they became vacant.  Councillors recognised that staffing was the Council’s biggest expense.  It was stated that the staffing bill was £17m, £3.5 million of which was Housing Revenue Account costs.  There had been a freeze on vacancies in April 2020 but demands on the organisation had actually increased due to the Covid crisis.  Some redeployment had occurred.  There was a further question from Councillors about possible reduction to salaries due to working from home.  Annie Righton said there had not been discussions about that at this stage.  There had been discussion about the possibility for reducing office space.

There was a further question around income from the Council’s investment properties and it was confirmed that the Council were continuing to receive a regular income from those.

RESOLVED

·         The Committee noted the report, and reminded the Executive of the suggestions made in July in the context of the Contingency Revised General Fund Budget for 2020/21 relating to areas where further cost savings might be possible.

·         To look at the Council’s reserves and provisions in another meeting in greater depth prior to the budget setting. This would be arranged by the Committee’s Vice Chairman.

·         The Committee would like financial data to be presented differently in future meetings so that when figures are presented, they know how much it is out of.  The Committee wanted to see gross figures presented on the left hand side of any tables of figures.