Agenda item

Medium Term Financial Plan Update

Executive will consider a report on the Medium Term Financial Plan Update at its meeting on 14th July 2020, before being considered by Full Council on 29 July 2020. This item will allow Councillors on the Strategic Overview and Scrutiny Committee to make comments on the Medium Term Financial Plan Update before it is considered by Executive.


7.1.       Councillor Martin Cook, Portfolio Holder for Revenues, provided an update regarding the proposed Medium-Term Financial Plan and confirmed that prior to COVID-19, the Council had predicted an underspend on the general fund for 19/20. However, following the outbreak in March, the financial position had moved adversely by £307,000, with the final position on the general fund showing an overspend of £108,000.


7.2.       Councillor Cook advised that taking into account both the overspend and planned reserves, approximately £6.8m remained in the general fund for the four year plan period. As the Council relied on the income it generated itself, it had been one of the most negatively affected with regards to loss of income from areas such as Leisure and Theatres, as well as likely losing Council Tax and Business Rates revenue. This was anticipated to continue beyond the current financial year and after any hardship relief had been withdrawn. The financial impact to the Council each month was currently running at £1.5m, which was an unprecedented situation for all.


7.3.       Councillor Cook detailed some of the main pressures on the Council which included costs to tackle rough sleeping and support provided to people who had been “shielding”. There had also been additional costs with regards to ICT and network upgrades to help support home working and PPE provided to staff in front line roles. With regards to lost income, this had predominately been from the sports & leisure services and car parks.


7.4.       The Government had provided £1.4m in support to the Council so far and it was anticipated that a further £2.4m would be provided before the end of the financial year. It was noted that action had to be considered now to ensure that the council reserves would not be exhausted before the next MTFP was set in February 2021.


7.5.       Councillor Cook concluded that the emergency budget plan would accelerate the use of reserves for the remainder of the year, allow reductions to the capital programme and reschedule works into later years, enlarge the Big Ticket Savings programme with larger targets, and undertake some service cuts. It was noted that due to a number of uncertainties, it was possible that further revisions to the MTFP would be required before February 2021.


7.6.       Councillor Pope asked if the MTFP had been based on the assumption that lost income would not be covered by the Government and if all decisions had been based on these financial assumptions. Councillor Cook advised that the final decision would be made at Council later this month and explained that assumptions had to be made as the severity of the financial impact meant that savings needed to be made as soon as possible. With regards to Government support and the letter attached as appendix 6 to the report, the Council had still received no details on how much it would receive or how the allocations would be calculated. Should more support be received from the Government than expected, the Council would consider reducing the unidentified savings.


7.7.       Councillor Harsant asked whether, if more support was provided by the Government, the suggested closures (such as the TIC) would still go ahead. Councillor Cook confirmed that the situation would be kept under review and advised that services continued to be considered to ensure they delivered what was needed for the town and in a cost-effective way.


7.8.       Councillor Gage asked whether it was anticipated that the Government would revise the way funding was allocated for the next tranche of funding. Mr Williams, Chief Executive, noted that it was unlikely that the formula for funding would be changed and advised that there were still various unknowns with regards to further financial support and the timescales for this. Councillor Cook advised that Local Authorities completed a DELTA report each month which advised the Government of the impact on each Council in terms of loss of income and expenditure, and it was hoped that this may be used when allocating further funding.


7.9.       Councillor Lockington asked if the towns fund money could be used to help the current economic problems. Mr Williams advised that this was capital funding which could only be spent following certain criteria. The Local Enterprise Partnership had received an allocation of £32.1m to be spent by March 2022 where there was potential to bid for capital money however, the majority of this predated COVID-19.


7.10.    The Chair thanked Councillor Cook and Officers for their attendance at the meeting.