Financial implications of Covid-19 (Agenda item 8)
Report of Councillor Philip Cowen, Executive Member for Finance & Growth.
Councillor Philip Cowen, the Executive Member for Finance & Growth presented the report and updated Members on the potential financial implications resulting from the Covid-19 pandemic.
Further to the previous report, he hoped that Members appreciated the significant cost to the Council and the alternative ways of working, none of which had been anticipated back in February 2020 when the budget had been produced.
It was no secret that all Councils in the country were facing an unprecedented call on resources. The report, therefore, asked for the financial implications of the pandemic to be noted and that this was an assessment at a moment in time when this report had been drafted some days previous. This provided the Council with a picture of where it thought its costs had been and where they might be going and it also looked at some analysis data providing its optimistic, realistic and pessimistic views.
Government had granted the various local authorities funding at different levels to support the efforts that everyone had to put in place very quickly to deal with the pandemic. There was also a high level of uncertainty about some of the costs, some of which could be clearly defined, for example, the purchase of equipment. For others going forward, it was unclear how long some of these costs were going to be incurred. Appendix A, clearly highlighted where the Council had anticipated these costs.
Councillor Cowen stated that the Council had a prudent set of finances over the last few years and the impact was perhaps not as great as some local authorities were facing but it was under no misapprehension that the costs that the Council was facing were significant.
Councillor Jermy referred to Appendix A of the report where it listed the assumptions for lost income and although he felt it was helpful to have those figures in percentages he thought it would also be useful to have the cash equivalent and asked if the table could include the financial amounts. Also, referring to the section in respect of in-year savings, he appreciated that a new budget would be coming back in July but wondered how Members could contribute to this process moving forward over the year, and lastly, the financial plan assumed a maximum Council Tax increase over the next few years and asked if there had been any murmurs from Government about the possibly of lifting the cap of council tax increases moving forward.
In response, Councillor Cowen was not aware of any current proposals from Central Government to lift the council tax cap. As far as the budget proposals were concerned, and clearly Members would have seen within the Leader’s report, the new structure for the recovery phase of the Council was fundamentally different to the current structure and it was going to take some time to bed in and all Members had a part to play in this; therefore, he felt that this would perhaps be an opportunity for wider Member engagement to understand how the budget was put together and he welcomed Councillor Jermy’s suggestion. Finally in respect of the table mentioned at Appendix A, there were figures behind those percentages and he would certainly ask for these to be provided.
Referring to the financial situation, Councillor Atterwill asked about the Worksmart 20:20 project and the significant cash outlay to the Council to re-furbish Elizabeth House to make it fit for the 21st century; and the fact that working practices may well change in the future; therefore, would the Council be pausing this project to take account of these issues and perhaps conduct another review. He asked if it was prudent for the Council to be spending this amount of money at the moment bearing in mind the current situation.
Additionally, Councillor Atterwill raised a further question regarding the waste contract, in respect of the significant amount of funding that had been put aside for the purposes of the waste vehicles and the reason for not borrowing that money. Again, bearing in mind the current situation with the Council’s finances, he asked if this was another matter that should be reviewed. Finally, he wanted to know if there had been any information received from Government about whether there would be any further funding available.
In response, to the latter question, Councillor Cowen advised that Government had already provided all Councils with significant sums of money and not all of that money had been drawn down as yet but was likely to be spent over the coming months. He was not aware at this stage of any further funding being provided by Government to plug the gap.
Regarding the waste contract, as the contract had already been approved, he felt that he was not in a position to answer that question.
Regarding Worksmart 20:20, working from home had become possible given the technology available but he ventured to suggest that whilst many staff members were finding it relatively easy to work from home, if you had a young family to look after, and you did not have a separate office/workspace, it was not necessarily the panacea that it might seem at first glance. He agreed with Councillor Atterwill, that there had been a great deal of work planned in respect of Worksmart 20:20 but there was also a great deal of work that could not be implemented such as ‘hot desking’, social distancing and locations of desks given the challenges of the pandemic. The Council had a huge responsibility to both staff and those people who visited the building to ensure that Elizabeth House was a safe place to work and visit.
The Leader advised that how the Council looked and operated post Covid-19 would be very different and the financial picture that Councillor Cowen had just highlighted would determine what it would look like in some of the already committed programmes whether they continued or whether they were paused. It was not just about Worksmart or the Council’s waste provision, the Council as a whole, would look very different over the coming months, this was to ensure that the authority was sustainable whilst delivering all the critical services to its residents and businesses and that as a District was fit for purpose moving forward.
Councillor Hewett commented on Councillor Atterwill and Councillor Jermy’s questions. One take on looking at some of the data involved in this report was to despair; however, this was really an exercise in attitude in the art of what was possible now and actually the way ahead, without doubt, this was now a new collaboration. The Council could deliver on this, it had the right staff and the right attitude and resilience and had proved over the last 10 weeks that what Worksmart 20:20 had been suggesting over a matter of years could be delivered and rather than looking at this report as a measure of doom and gloom, this was, in fact a call to action and all Members should collaborate to make sure that this Council allowed its residents and businesses to thrive moving ahead.
The report was otherwise noted.
- Financial implications of Covid-19, item 32/20 PDF 72 KB
- Appendix 1 for Financial implications of Covid-19, item 32/20 PDF 76 KB