Agenda item

This report sets-out the financial impact of Covid-19 on the Council in the first quarter of 2020/21, and proposes funding sources to mitigate the impact.

The Committee received a report setting out the financial impact of Covid-19 on the Council in the first quarter of 2020/21, and proposing funding sources to mitigate the impact.

The Chief Finance Officer introduced the report to the Committee. The Committee was informed that the Secretary of State had announced additional funding support for Councils on the morning of the meeting. This had been announced as:

·                     Unringfenced grant of £500 million to respond to spending pressures that Councils were currently facing;

·                     An income protection scheme for all relevant losses over and above the first 5% of planned income from sales and fees and charges. It had been announced that this would be compensated at a rate of 75p in the pound.

·                     A proposal on the phasing of Business Rate deficits and Council Tax deficits over a 3 year period.

The Chief Finance Officer informed the Committee that the Council had not yet received the detail of these schemes, and that they were not accounted for in the report in front of the Committee. A Quarter 2 update report would be presented to the Committee’s meeting in September 2020, and it was hoped to provide further information at that time.

The following matters were considered:

a)            Commercial property income. Following a question from a Committee member, the Chief Finance Officer informed the meeting that the Council had adopted a prudent approach to commercial property income and had set reserves which enabled it to take a managed response to the current challenges.  The Chief Finance Officer also provided the Committee with an update on the figures detailed in paragraph 3.15 of the report, as £1m in rent due for the first quarter had now been collected (rather than £0.5 as detailed in the report).

b)            Timeframe for capitalisation of losses. The Chief Finance Officer informed the Committee that no response had yet been received from the Government with regard to proposals that Councils would be able to capitalise Covid-19 related losses, and as such no timeframe for such capitalisation could be set. The report included a recommendation that Officers should continue to pursue this possibility. If the Government permitted such capitalisation, and Officers felt that it would be of benefit to the Council, the Council’s support to do so would be sought.

c)            Corporate project reserve. The Chief Finance Officer informed the Committee that it was not anticipated to defer any projects at present, but that future schemes might be restricted if funding was utilised for the Covid-19 response.

Following consideration, it was resolved:

That the Committee:

(1)      Noted the projected £2.5m deficit caused by Covid-19 in the first quarter of 2020/21;

(2)      Agreed that the recommended funding, as set-out in paragraph 6.8, be deployed to address the deficit;

(3)      Agreed that should the Government permit the capitalisation of Covid-19 related losses, then officers should examine this option for EEBC;

(4)      Supported the continued lobbying of Central Government for further financial support;

(5)          Noted that a further financial update will be brought back to this Committee in Quarter 2.