Issue - meetings

The report sets out the latest financial forecast for the impact of Covid-19 on the £283 million 2020/21 budget and how it is to be managed.

The government has provided £22 million of emergency funding to cover projected additional costs and lost income of £52.3 million in the general fund with a resulting funding gap of £30.3 million.  The report includes a range of measures introduced to reduce expenditure which is not being incurred in support of the pandemic. This includes temporary adjustments to services, continuing the vacancy freeze, bringing forward transformation savings and delaying projects. At this stage the residual gap would also need to be supported by the reprioritisation of reserves.

There is still considerable uncertainty regarding the duration, impact and level of government support for the pandemic. The position will therefore need to be kept under constant review. Lobbying of Government will need to continue as it is not acceptable that the council should bear significant budget pressures as a result of the pandemic and full financial support should be provided as originally announced. If successful, this would enable us to release for their intended purposes the resources earmarked to reduce the projected funding gap.

The report also reflects on the potential impact of Covid-19 on the capital programme and ring-fenced Housing Revenue Account (HRA), with the actions required to balance the account.

Appendices A to C include the year end forecasts for the general fund revenue budget, medium term financial plan (MTFP) and capital programme.

RESOLVED that Cabinet:-

(a)          Note the progress in the development of the budget mitigation strategy as a result of Covid-19 pressures; and

(b)          Continue to lobby Government for additional funding to reduce the projected budget gap caused by the outbreak. 

Voting: Unanimous

Portfolio Holder: Finance

Reason

The council has embedded sound financial and risk management protocols as well as a culture of scenario and options appraisal. This culture is needed now more than ever with the greater level of uncertainty arising from the pandemic.

The scale of income loss in 2020/21 is projected to be so significant as to threaten the financial viability of the council and concerted action must be taken to reduce expenditure to rebalance the budget.

The Portfolio Holder for Finance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'D' to these Minutes in the Minute Book.

Cabinet were advised that the report set out the latest financial forecast for the impact of Covid-19 on the £283 million 2020/21 budget and how it is to be managed.

In relation to this Cabinet were informed that there was still considerable uncertainty regarding the duration, impact and level of government support for the pandemic, and that the position would therefore need to be kept under constant review. Further to this Cabinet were advised that lobbying of Government would need to continue as it was felt that it was not acceptable that the council should bear significant budget pressures as a result of the pandemic and full financial support should be provided as originally announced.

The Chairman of the Overview and Scrutiny Board addressed Cabinet advising of the concerns that the Overview and Scrutiny Board raised at their recent meeting that the usual budget process and Member involvement wasn’t happening, and that as a consequence at their recent meeting the Board resolved to make the following recommendation to Cabinet in respect of this item:

The Overview and Scrutiny Board is surprised and disappointed that such a substantial rebase of the budget for the Council is not being put before all elected Councillors for their consideration and approval. This includes Cabinet, where the recommendation on the Cabinet Paper reads that the proposed £30m of savings should be “noted”, not even approved. Therefore, the Overview and Scrutiny Board recommend to Cabinet that the revised budget as outlined in the Cabinet report be put before Full Council in the normal fashion for a budget decision.

(Copies of the briefing notes including officers and Portfolio Holder comments on the Boards recommendations which had been circulated to Cabinet Members prior to the meeting in order to assist with decision making will be published on the Councils website following the meeting).

Councillor Mohan Iyengar addressed the Cabinet with the permission of the Leader. Councillor Iyengar praised senior officers and those involved in closing the budget gap of more 10%, in relation to this Councillor Iyengar highlighted that there were three types of cuts these being, permanent cuts in the cost base, activities and costs which have reduced this year but will come back again next year and cost deferrals which have been deferred from this year but will add to next year’s costs. Councillor Iyengar expressed concerns with regards to the lack of strategic drive of the budget with areas missing such as Mental Health, Schools and things around eco-friendly energy. In closing Councillor Iyengar urged Cabinet not to lose the strategic direction that BCP needs at this time.

Cabinet Members spoke in support of the recommendations within the report highlighting the importance of maintaining flexibility in the budget at this time, and stressing the difficulty with continuously refer the budget back  ...  view the full minutes text for item 184