Agenda item - Budget Framework - Presentation

Agenda item

Budget Framework - Presentation


The Executive Director, Finance and Resources took Members through a presentation in respect of the Budget Framework (included in the supplementary agenda).  In so doing she highlighted the following:


·       A general update in respect of the outturn position.

·       A £231k underspend and its allocation across all areas of the Council in line with the strategic purposes.

·       £1m in reserves for Economic Regeneration particularly in respect of Covid-19.  Schemes to be funded from this were currently being worked on and it was hoped would come forward shortly.

·       Just under £400k had been allocated to balances to bring these up to around 34.4m.

·       There had been significant underspends and a more detailed summary position on these had been discussed at the Overview and Scrutiny Board’s Finance and Budget Working Group the previous evening, which could be circulated to Cabinet Members.

·       Balances position and detail around this – the minimal level of balances had been agreed by Members at around £1.1m.  Whilst the Council was above that, in light of Covid-19 and the uncertainty its impact on Council services it was felt prudent to keep the levels at the maximum it could.

·       Reserves – an amount had been set aside for Economic Development and £300k had been not been used and was used to balance the budget.  There was also a significant Business Rates reserve, again it was important to mitigate against any loss of Business Rates following the impact of Covid-19.  The Government may also re-set the Business Rates and it may also change if there are any amendments to the appeals system for this.  There were also reserves for Services Reviews and IT Systems.

·       Covid-19 Financial Impact – the Return to Central Government had been set for July and this showed the grants which had been paid out on behalf of Central Government.  There was a drop in Business Rates and it was projected that there would be a loss of £2m., which would be shared with Central Government and Worcestershire County Council.  There was also likely to be an impact on Council Tax, Leisure Provision and Car Parking, some of which could be claimed back from Central Government.  Currently £1.2m of Grant Funding had been received and a further claim would be completed at the end of September.

·       Medium Term Budget Gap for 2021/22 moving forward for the next three years fr0m £495k to £797k which was largely due to the loss of New Homes Bonus.  The concern was the potential impact of Covid-19 going forward and areas that the Council could see a reduction in funding for – Members were reminded that previously the Council was looking at paying Central Government £750k a year, which had been taken out of the budget, but there was always the possibility that this would come back in again.

·       Review of the Medium Term Financial Plan – assessing impact of Covid-19, Fees and Charges would come forward in December.  Five service areas which have been subject to significant savings or overspends would be looked at in more detail, to ensure that this was reflected in 2020/21 and future years.

·       Capital Programme - £300k underspend around borrowing, which was a concern as Members were making decisions on the back of Capital Programmes which then did not get spent.

·       Central Government had advised that due to Covid-19 the Council would only receive a one year settlement and the Fair Funding review which was being looked at and the potential devolution and re-organisation which the Council did not currently know what this would look like, needed to be considered.


The Leader questioned whether the Council had a full understanding of the income streams which came in to it at present, the Executive Director, Finance and Resources commented that the income streams that it was getting were being updated weekly through the Corporate Management Team, this included car parking and planning applications, as there had been particular concerns around these areas.  In respect of additional income for 2019/20 it was not as much as had been hoped, but was £70k above what had been expected.  Income and Capital and Salaries were areas which were being looked at as there were some salary budgets which had been rolled forward, which needed to be addressed for the future.


The Portfolio Holder for Finance and Resources said this provided a comprehensive view of where the Council could be and luckily it had sufficient monies in balances to cover the gap if it had to, but he hoped that there would be other ways of doing this in order to retain the balances at the current position, which felt more comfortable in the current circumstances.


Members discussed the following in more detail:


·       The Council had given around £23m in grants to local businesses – it was believed that this was around 1,800 businesses (it was 1,688 at the end of August).

·       The money for Economic Recovery – concerns were raised around the future of many businesses and it was hoped that this would go towards supporting them.  Colleagues were working with Portfolio Holders in this respect and once the £1m to this scheme was agreed at full Council on 16th September these would begin to come forward.  This had not come up as an issue with the Finance and Budget Working Group when discussions had been held.  It was accepted that it was important to get the local economy back up and running as soon as possible.

·       Thanks were given to the Executive Director, Finance and Resources and her team for all their hard work in ensuring that the grants from Central Government went to those that needed them and the speed at which the Council had delivered these had been exceptional.

·       The Executive Director, Finance and Resources commented that one of the things which there had been concern about was the interpretation of the Government Grants, the Council and the Team had been very clear around this and the Council had written to BIS advising that there were still a number of businesses that it had not been able to help due to the interpretation and advised that this really needed to be looked at again.  The Council did not want to give out the grant and then for it to be re-claimed further down the line because it had been incorrectly allocated.

·       There was a list of all the businesses which the Council had helped and this would be made available to any Members who wished to see it.

·       Capital Programme – needed to be looked at with the economy in mind, hopefully some projects would come forward in order to help this.  The Executive Director Finance and Resources advised that the wider Economic Development opportunity fund that remained available for investment opportunities, had been widened to allow for social gains as well as financial gains.  In terms of the Capital programme we have just rolled it forward and now was the opportunity to do a more robust review of this and perhaps realign some of the funding already available.

·       It was an excellent opportunity to invest in the District and stimulate growth and help people get back in to work.


The Leader took the opportunity to give a sincere thank you to the Executive Director, Finance and Resources for her work over the last 17 years at the Council and wished her well in her new venture.


RESOLVED that the presentation be noted.



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