Revised budget 2020-21 (Agenda item 9)
- Meeting of Cabinet - This meeting will be streamed live. The link can be found on the Agenda frontsheet and the Reports Pack below, Cabinet, Monday, 7th September, 2020 9.30 am (Item 56/20)
- View the background to item 56/20
Report by Councillor Philip Cowen, Executive Member for Finance and Growth.
The Executive Member for Finance and Growth presented the report
During these unprecedented times, he doubted whether any Member could recall a time when the Council had to consider a change to the budget part way through a fiscal year.
COVID 19 had had a significant impact on the workings and financial status of Councils throughout the United Kingdom and Breckland was no exception.
In June 2020 an interim report had been presented on the likely and potential impact of COVID 19 on the budget that had been set prior to the world changing in March 2020.
The Council had suffered losses through reductions in its income streams as shown in paragraph 1.3 and it had experienced additional costs as identified in paragraph 1.4 of the report.
Government support had been received to target some of the gaps that the pandemic had created and whilst the Government support had been substantial, it had not funded the budget gap fully as a result of the impact of the pandemic on Breckland.
However, the Executive Member was pleased to report that Breckland Council, through its prudent fiscal management, had been able to absorb the majority of the financial gap by drawing down reserves as shown in Appendix A of the report. This authority was confident that as it moved forward it would be able to put in place measures to address the £217k shortfall.
The Executive Member thanked the Teams within the Council who had worked in challenging and, at times, often difficult circumstances to put this revised budget together. This had been a workstream that had never been encountered before and hopefully one which would not occur again.
Full details that supported the revised budget had been set out in the report and appendix A highlighted the summary of the Revenue Budget amendments.
Alison Chubbock, the Chief Accountant and Deputy S151 Officer was in attendance to answer any questions.
Members were asked to support the recommendations.
Councillor Clarke also paid tribute to the work of the Teams in these difficult circumstances not only for remote working, but for the challenges faced in respect of the reduction to the Council’s position. He had noticed that the Council had lost revenue in a number of areas in particular, commercial services, following a number of abatements for tenants and he wondered if it would be possible to have a breakdown of where those particular gaps were taking into account that this would be commercially sensitive information.
The Executive Member stated that there had been a great deal of information that had gone into producing this report and due to the commercially sensitive nature attached to it, it had been summarised accordingly. He was sure that the Chief Accountant and her Team would be able to pull together a supportive document for Members whilst recognising that some of this information might not be able to be released.
Councillor Hewett, the Executive Member for Contracts & Assets, commented that it was odd to publicise and reflect on bad news but this authority had, as Councillor Cowen had said, like many councils, incurred losses and more costs due to Government grants not being met within the current spending plans. However, at the same time, and emphasising one point that had been mentioned earlier, through robust and careful stewardship, the situation that the Council was facing, was far better than, what he believed many councils had faced during this pandemic. Would this report create sensational headlines, probably not, would it receive the press it deserved in respect of the Council’s financial propriety, probably not but would it allow the residents and businesses to thrive in future, absolutely, and he commended the report in terms of both the effort that had gone into it and also the effort it reflected in terms of making sure that the businesses and residents would thrive over the next couple of years.
Referring to the figures contained within Appendix A, Councillor Atterwill felt that the Council was looking at a substantial loss of income in respect of planning & building control and land charges etc. He asked the Executive Member for Finance & Growth whether the Council had the ability to claw back any of that income from Capita in terms of the contract. In response, the Executive Member advised that whilst it was clear that there had been a reduced number of applications submitted during this pandemic , Capita was not responsible for that reduction but he was aware through conversations with colleagues in the Capita Planning department that they had never seen such a large number of applications being submitted now. He anticipated that the planning income stream would recover and gather a little more momentum as there were significant applications in the pipeline coming forward.
As for the contract itself, and whether there was any claw back mechanism contained within it, the Executive Member was unable to respond as contracts did not form part of his Portfolio and deferred the question to Councillor Hewett, the Executive Member for Contracts & Assets.
Councillor Atterwill was reassured that if there was a provision for claw back, the Council would pursue it.
Rob Walker, the Executive Director for Place, explained that there was no such claw back mechanism within the contract. Income retention was not linked to cost expenditure directly; however, there were mechanisms within the contract if volume of work thresholds were not being met. Members were informed that historically, these volumes had been exceeded but whether this had been the case during Covid would be a matter that would have to be checked.
The Chairman thanked the Executive Member for Finance & Growth for his report and conveyed his thanks to colleagues within the Finance Team. Councils across the country were struggling and many that were announcing new budgets were changing the way their services were delivered whilst having to take money from their reserves. Breckland’s proposal would mean that all services would continue to be delivered at the same level pre-Covid as well as remaining committed to all capital programmes that would make a great deal of difference to its market towns in future. He felt that through Breckland’s stewardship, prowess and professional this interim budget presented before Members showed that Breckland Council’s commitment to its residents and businesses was still there and he looked forward with Cabinet and council colleagues over these next preceding weeks to announce how Breckland would be changing to further improve its commitments on the back of Covid to ensure that Breckland had stronger resilience moving forward for all.
Councillor Atterwill recognised the difficult situation that everyone was in but to mitigate the deficit of £217k a substantial amount of Reserves would have to be drawn down or further savings would have to be made. He appreciated that Breckland Council was in a position where this Reserve could be used but this was money that this Council was having to use as opposed to being offset by Government funding and asked if there was any prospect of further Government funding expected.
In response, the Chief Accountant advised that there had not been any announcements from Government about further funding; however, there could be some more smaller amounts, such as New Burden grants where the Government covered the cost to councils in terms of re-billing processes. If any announcements were made, the Cabinet would be updated accordingly as part of the quarterly financial reports.
The Executive Member for Finance & Growth pointed out that the Council’s General Fund currently contained £2.5m none of which had needed to be drawn down as other sources had been used. The Council was currently in a strong financial position and its plan was to build back stronger and better and would be entrenched over the next few months.
The Chairman reminded Members that a number of years ago the Council had removed its reliance on New Homes Bonus from its core budget that had allowed some of that money to be reinvested. He felt that all Councils up and down the country were experiencing some kind of financial struggle not forgetting every Government department that was also suffering financial impairment on the back of Covid.
Everyone had a duty and a responsibility to ensure that Breckland Council was spending its taxpayers’ money in the most suitable and appropriate way whilst trying to achieve the biggest rate of return. The White Paper that was emerging was being classed as the recovery and devolution White Paper and part of that reform would be how Councils could recover and become sustainable moving forward. All Councils, whether across unitary, county, district or borough councils, had attempted to lobby Government to support everyone financially and billions of pounds had been pumped into the economy at pace from Government that had proved that the Government had listened to all concerns.
It was noted that subject to all the above and the forthcoming White Paper, the normal budget setting would still remain at the end of this financial year.
1) That the additional revenue costs, funding and use of reserves as set out in Appendix A of the report be approved and that the changes to the capital programme set out in Appendix B and Appendix C of the report be approved.
2) Do nothing.
Reasons for Recommendations
To set a revised budget which reacts to the Covid-19 situation and provides a new budget to monitor against for the remainder of the year.
RECOMMEND to Full Council that:
1) the additional revenue costs, funding and use of reserves as set out in Appendix A within the report be approved
2) the changes to the capital programme as set out in Appendix B and Appendix C within the report be approved.
- Revised budget 2020-21, item 56/20 PDF 74 KB
- Appendix A for Revised budget 2020-21, item 56/20 PDF 39 KB
- Appendix B for Revised budget 2020-21, item 56/20 PDF 77 KB
- Appendix C for Revised budget 2020-21, item 56/20 PDF 47 KB