COVID-19 Financial Impact
Report of the Head of Finance
The Head of Finance presented the report to the Committee setting out how the COVID 19 pandemic had impacted on the Council’s finances.
The Committee was advised that the council’s own financial implications arising from Covid-19 were still emerging and expected to continue to emerge over the medium-term. The report set out the financial impact currently understood in the last week of April and was intended to provide members with an opportunity to understand the detail regarding the early financial assessment. Forecasts assumed a lockdown period lasting until 30 June, unless specific service variations were known, with economic recovery taking longer.
The revenue impact across the Council to date was estimated to be in the region of £2.129m gross and £1.043m net of the £1.086m Emergency Funding for Local Government. The majority of this impact was within the General Fund which would bear £1.870m gross impact, with the HRA impacted by £259k, notwithstanding the actual impact on housing rents which was not yet fully understood.
As Section 151 Officer, the Head of Finance advised that she had no concerns regarding the resilience of this Council but she was mindful of the future funding position; she would also be monitoring the borrowing forecasts very closely and would have the relevant delegations in place in terms of undertaking short-term borrowing.
The Head of Finance drew member’s attention to the impact on local taxation, in particular council tax and business rates. Any loss in income would not be felt until 2021/22 at the earliest because of the collection fund accounting method.
The Chairman invited Councillor N Rushton to speak as the Portfolio holder.
Councillor Rushton reiterated the Head of Finance’s comments about being in a sound financial position and the Government’s suggestion that the Council had received sufficient funding to deal with Covid-19 when, as the report clearly demonstrated, it had actually only received half as there was currently a £1m shortfall. He also reiterated the point about the impact on the 2021/22 financial year and forewarned that a reduction in council tax and business rates sitting alongside a policy of no increase in council tax puts the council in a difficult position. If extenuating circumstances were applied and, for example a 3% increase was applied, because the base has eroded over the years, it would only equate to £100k-£150k which was worrying for a small district and even more worrying for those who were not responsible for their own incomes such as police, fire etc.
Councillor Rushton advised that he was receiving regular briefings on what was a moveable feast and he congratulated the Head of Finance and her team for all their hard work and excellent performance in achieving a rate of 92% of all grant monies being allocated; and who were now working hard to identify those business who did not qualify for the large scheme to see if they qualify for the discretionary grant scheme.
The Chairman thanked the Head of Finance for her detailed report and took questions and comments from Members.
Councillor M Wyatt asked whether the additional funding available to businesses would apply to showmen/fairground workers to which he was advised that they would be eligible as long as they had not been awarded any other of the government grants available to businesses and that they could demonstrate that they had still had to pay ongoing property related costs and coupled with that they had seen a reduction in their income. No business had been excluded from the scheme unless they had property related costs which exceeded £51k a year, as the focus was on smaller businesses.
Councillor Wyatt advised that he would support a reduction in service charge for tenants and Councillor Rushton advised that, following a meeting he had attended earlier in the day, this had been agreed and would see this materialise in a reduced bill next year.
Councillor Wyatt asked about the reference to reduced expenditure of the Coalville special expenses area and asked if this funding would be carried over to the next financial year. He was advised that it would be carried over if remains unspent, as special expenses were ring fenced and therefore could not be allocated elsewhere.
Councillor Wyatt thanked the Head of Finance and Councillor Rushton for their positive responses which he welcomed.
Councillor Sheahan stated that it was refreshing to hear from Councillor Rushton that after several years of not increasing the council tax he could foresee circumstances where council tax may have to be increased in the future.
Councillor Smith asked how the information regarding the local authority discretionary grants fund scheme was being communicated across the district. He was advised that this was being done by contacting those who were not eligible for the earlier scheme and through social media, press releases and direct targeting.
The Chairman advised that, as the recommendation was simply asking the Committee to note and comment on the report ahead of its submission to Cabinet, he would take it by affirmation of the meeting that Members were happy to do this unless anyone objected. He asked if there were any objections. There were none.
The recommendation as set out on page 15 of the report was moved by Councillor Hoult , seconded by Councillor Wyatt and by affirmation of the meeting it was
The report be duly noted and the comments made at this meeting be reported to Cabinet at its meeting on 14 July 2020.