Cheltenham Borough Council
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Agenda item

Financial Outturn 2019/2020 and budget monitoring report April-June 2020

Report of the Cabinet Member Finance

Minutes:

The Leader introduced this item in the absence of the Cabinet Member Finance. He praised the significant work undertaken by the finance team and in particular the Executive Director Finance and Assets, in a difficult and unprecedented situation. He also thanked the Cabinet Member for her contributions.

 

He outlined the financial impact of the Covid-19 crisis, noting that in normal times, the council would be able to declare a surplus around this time. By the end of March 2020, however, £72,000 of extra Covid-related costs had already been accrued, on top of some £400,000 in lost income, mostly from car parking. Initial government support was meagre (around £50,000), due to how the first tranche of support was mostly aimed at authorities with social care responsibilities. In that context, he suggested that being able to declare an overspend of only £47,000 was remarkable. He added that there were a number of carry forward requests, as was to be expected.

 

He praised how the Golden Valley Cyber Central project had been able to continue during the pandemic. A number of groups were bidding to become the project’s development partner, and this had been whittled down to six at the time of the meeting. He welcomed the fact that the council’s key affordable housing projects were up and running, and thanked Cheltenham Borough Homes for their significant efforts in that respect.

 

The Leader acknowledged that after the end of March, the situation had changed dramatically. The current forecast was for a total loss of income of £3.5m, as well as extra costs of £1.7m. He added that the total government support received as of the end of June was £1.2m, and noted the gap between these figures.

 

He noted that CBC received £173,000 out of the government’s latest £500m support package to local government, and that the government had also pledged to underwrite 75% of local authorities’ losses. The situation was less clear when trusts were involved, for example in the question of leisure centres. Future announcements were expected from central government to clarify this. He reported that Cabinet had endorsed the report for Council approval on the 28th July.

 

One Member thanked finance officers for their work in a difficult time, and stressed the importance of central government’s pledge to underwrite local authorities’ losses. He was hopeful that the Chancellor’s forthcoming Autumn Statement would offer further support to local government. He also praised the Holiday Hunger Fund, and placed on record his hope that this support would continue during the winter. The Leader of the Council responded that the Autumn Statement would be of considerable importance, and he hoped that CBC could ‘phase’ some of its losses over the next few years, although the size of these losses was not yet clear. The budget was likely to be reviewed towards the end of September, although they were still waiting on key aspects of government advice.

 

The Chair of the Budget Scrutiny Working Group added his support for the report, and asked whether an emergency budget could be required later in the year. He also asked about the situation with the council’s partner organisations, and how wide-ranging the reassessment of its property assets was likely to be. The Leader of the Council responded that Cabinet Members were in regular dialogue with partners, and that the Trust, for example, had given an in-depth briefing to Overview & Scrutiny Committee about its financial situation. The Executive Director Finance and Assets added that an emergency budget was not presently required this financial year, partly due to the commitments and promises coming from central government. With the exception of potential slippage in savings, the support received to date would cover the additional expenditure incurred by the council. Although he did not expect an emergency budget to be required, difficult decisions would likely need to be made, and the council had identified £2.5m of its own resources that could be applied if necessary to cover lost income. In terms of reassessing property assets, the request of the property team was to produce a long list of options by the end of August, which could then be considered by Cabinet and by Members at their briefings.

 

The Executive Director Finance and Assets noted that particular sectors had been hit especially hard by Covid-19 (leisure, hospitality etc.) and a full year business rates holiday had been implemented to support them, the financial impact of which would be mostly felt next year. Council tax was also a key consideration, with many people likely being unable to pay it due to financial hardship, and deferred payment plans being made available to help them out.

 

The Leader of the Council thanked Members for their contributions, and thanked the Local Government Association for liaising closely with central government to represent local authorities. He added that more frequent meetings had been organised with partners to keep the council abreast of any developments.

 

One Member asked whether a temporary relaxation of car parking charges could encourage shoppers and alleviate the loss of income slightly. The Executive Director Finance and Assets responded that he understood the logic, but warned that this reduced income would not be covered by any government underwriting, and as such would not be advisable. The Leader of the Council added that the main reduction in car parking income had been from a fall in commuter parking, with more people working part-time or from home, rather than from shoppers. The council must take into account shifting work habits.

 

The Mayor moved to a vote, which was unanimous.

 

RESOLVED THAT

 

1.    the financial outturn performance position for the General Fund, summarised at Appendix 2 be received, and that it be noted that whilst services have been delivered in 2019/20, there was an overspend of £47,518.56 against the approved budget which has been met from general balances (after carry forward requests);

2.    the £191,552 of carry forward at Appendix 5 be noted;

3.    the annual treasury management report at Appendix 7 and the actual 2019/20 prudential and treasury indicators be noted;

4.    the capital programme outturn position as detailed in Appendix 8 be noted and the carry forward of unspent budgets into 2020/21 (section 7) be approved;

5.    the position in respect of Section 106 agreements and partnership funding agreements at Appendix 9 (section 9) be approved;

6.    the outturn position in respect of collection rates for council tax and non-domestic rates for 2019/20 in Appendix 10 (section 10) be noted;

7.    the outturn position in respect of collection rates for sundry debts for 2019/20 in Appendix 11 (section 11) be noted;

8.    the financial outturn performance position for the Housing Revenue Account for 2019/20 in Appendices 12 to 13 (as detailed in Section 12) be received and the carry forward, virement and reclassification of budgets in 2020/21 as set out in paragraphs 12.8 to 12.10 be approved;

9.    the budget monitoring position to the end of June 2020 be noted (section 13).

Supporting documents: