Agenda item

To consider the report of the Chief Officer (Financial Services) that sets out for the Executive Board the Council’s projected financial health position for 2020/21 as at Month 6 of the financial year.

The Chief Officer (Financial Services) submitted a report which set out the Council’s projected financial health position for 2020/21 as at Month 6 of the financial year. The report projected a gap of £30.5m, following the receipt of an additional £20.5m funding from the government.

Prior to the meeting, Board Members received an addendum to the submitted report, which provided updated information regarding how the Council intended to resolve the estimated 2020/21 budget gap due to the impact of COVID-19. The addendum highlighted the decision to utilise reserves to manage the financial position in 2020/21 and deliver a balanced budget. The Council, as a consequence, had withdrawn the application to Government for a capitalisation directive, with the addendum presenting the Board with a revised set of recommendations as a result.

Members welcomed the updated information which had been provided, acknowledged the significant work which had been undertaken throughout the pandemic to get the Council to the current position, and thanked all those involved for their efforts. It was also noted that, as referenced elsewhere on the agenda, work would continue with regard to the management of 2021/22 budget and beyond.

Responding to a Member’s enquiry, the Board received further information on the reserves being used to deliver a balanced budget, specifically the planned application of an earmarked reserve of £25.65m, and the financial implications of that for the Council moving forward.

Also, in response to a Member’s enquiry, the Board received further details on the levels of inflation which were being experienced in terms of external residential placement costs and independent foster agency costs, with clarification being provided on the reasons for those increased costs and how such matters were being taken into consideration and managed as part of the directorate’s budget strategy for the current year and moving forward.  As part of this discussion, it was emphasised that similar to Leeds, other Local Authorities were experiencing costs pressures regarding external residential and independent foster agency placements.

Responding to a Member’s specific enquiry regarding the projected interest payments on the Council’s debts for the current financial year, and regarding the levels of projected inflationary pressures in the medium term, officers undertook to provide the Member in question with this information.

Whilst the separate tranches of Government funding received were welcomed, emphasis was placed upon the difficulties which continued to be experienced in managing the Council’s financial position. With that in mind, Members considered the principle of sending correspondence to the Treasury on a cross-party basis about the losses in Council Tax and Business Rates income that the Council has incurred. In considering this matter, Councillor A Carter advised that whilst he agreed with the principle of approaching the Treasury on this, the Conservative Group would make their own representations.

In taking into consideration the contents of the submitted report together with the addendum and the revised recommendations within it, it was

RESOLVED –

(a)  That in noting the comments of Councillor A Carter, as outlined above, appropriate correspondence to the Treasury be drafted up on a cross-party basis for relevant Members’ consideration regarding the losses in Council Tax and Business Rates income that the Council has incurred;

(b)  That the projected financial position of the Authority as at Month 6 of the financial year, together with the projected impact of COVID-19 on that position, be noted;

(c)  That it be noted that the position reported does not reflect the potential effects of any further local or national lockdown arrangements not yet introduced, which could impact on the financial projections as detailed in the report;

(d)  That it be noted that for 2020/21 the Authority has withdrawn its application for a capitalisation directive to Government, with it also being noted that full details of how the Council will achieve a balanced budget will be incorporated into the Month 7 Financial Health monitoring report which is to be received by Executive Board in December 2020.

(Under the provisions of Council Procedure Rule 16.5, Councillor A Carter required it to be recorded that he abstained from voting on the decisions referred to within this minute)