Agenda item

Report of the Chamberlain.

The Committee received a Report of the Chamberlain concerning the Corporation’s financial position and the impacts of COVID-19 on budgets since the last update (reported to the Committee in June).

The Chamberlain re-emphasised that whilst the annualised estimate of the financial impact had, since June, come down from £30M - £27.6M, Covid would continue to yield significant damage to the Corporation’s finances, both in the short and longer term.

The Chamberlain confirmed that, as per the Chairman’s request, an in-year re-budgeting exercise had begun, and would continue during the coming months, culminating in a new revised budget which would be submitted for Finance Committee Members’ consideration in October.

The re-budgeting exercise would look to both capture in-year savings and present an opportunity to get the finances on a “sustainable flight path” for the next 3-4 years. He added that, going forward, the Target Operating Model (TOM) would underpin budget proposals.   

The Chamberlain informed Members that the results of the Government’s Spending Review would be announced by the Chancellor in the autumn. In addition, the Business Rates Review has been reactivated, with the call for evidence closing in mid-September. Due to Covid, the next Business Rates revaluation will now take place from 1^st April 2023. The Chamberlain emphasised that the decisions taken on Business Rates will be key to the Corporation’s Medium-Term Financial Plans and longer-term forecasts; he will update Members in due course.

The Chairman thanked the Chamberlain for his remarks and reminded the Committee that, whilst Covid had wrought significant damage, the medium-term financial projections were looking fragile before Covid; it was, therefore, incumbent upon both Members and officers to carefully scrutinise current spending, and, accept that in the case of any new, in-year capital bids, these would only be approved on the basis of rare, exceptional cases. The Deputy Chairman added that maintaining financial discipline had to be central to all decisions going forward.

The Chair of Policy & Resources welcomed the Chairman’s remarks; she stressed that the picture across local government was grave, and the recovery would take a considerable amount of time. Several Members, whist recognising that the City had a degree of greater flexibility compared to other local authorities, emphasised the need for prudence and responsibility as the primary drivers in the years ahead.

In response to a query around the Corporation’s decisions concerning the option of furloughing staff, the Chairman confirmed that the original decision was not to furlough, however, upon further review, the Establishment Committee subsequently took the decision to allow Departments to furlough staff if required.

The Chair of Policy & Resources added that the original decision around furloughing was not specifically a City policy, but a broader local authority approach.

RESOLVED – that the Committee noted the Report.