Agenda item

To approve the budget for 2021/22.

(B) 2021/22 City’s Cash Budgets and Medium-Term Financial Plan

The Court considered a report of the Finance Committee presenting the overall financial position of City’s Cash.

Amendment – That the following additional recommendation be added, as follows:-

“7. Agree the creation of a City of London Covid Business Recovery Fund to alleviate some of the worst effects of the pandemic upon the Square Mile’s support infrastructure and to enable the City to emerge with a functional and thriving economy, by drawing-down up to £50 million from City’s Cash balances and short-term financial investments, or alternatively financed through borrowing. Grants from the Fund will be made available to small and independent retailers and hospitality businesses together with those providing clinical and professional services (e.g. dentists and opticians) necessary for the successful return of all those who work in businesses in the City. Businesses applying for support from the Fund, the process of which must be easily accessible, must demonstrate that they are capable of surviving on a viable and going concern basis and that owners have taken necessary steps including, where possible, financial contributions to their business. Grants from the Fund would normally be dependent on the businesses also receiving substantial financial support (not just rent deferrals) from their landlords. Officers are instructed to bring forward a report to the next meeting of the Policy & Resources Committee, who will be responsible for the fund and its deployment, recommending arrangements and detailed criteria to implement the deployment of the Fund, including the appointment of professional firm(s) with relevant expertise necessary for providing advice and support to enable the Fund to commence making grants as soon as is reasonably practicable.”

Sir Michael Snyder, as the Mover of the Amendment, spoke to introduce the proposal and outlined the rationale and urgency associated with it, commenting on the unprecedented challenges facing City businesses and the need to show leadership at this time more than ever. He reflected on the crucial role of the City for London and the nation in generating income and observed that, notwithstanding the Government’s many support packages offered to businesses to-date, City businesses had particular issues which required further assistance to be offered, in particular those smaller enterprises so dependent on footfall given the proportion of residents to workers in the City in normal times. The infrastructure provided by these small businesses in supporting the workforce of the larger businesses was essential to the success of the City; therefore, a robust plan for their support was imperative. Sir Michael outlined the content of the Amendment

Members proceeded to debate the Amendment.  During discussion, a large number of Members spoke to express strong support for the proposal, with the following points arising:

·         Members reflected on the cost of the proposal, noting that the likely detrimental impact of not acting to support businesses in this way would far outweigh the £50m cost of this particular package. It was observed that such extraordinary circumstances required extraordinary steps to be taken by the City Corporation and that the survival of small and micro businesses which supported the City infrastructure and sustained the larger businesses was vital.

• The detail of the scheme would be important to get right, both in terms of ensuring the application process was efficient so as not to be problematic for businesses, as well as ensuring that the grants were only given to sustainable businesses. In respect of the latter point, it was suggested that this sustainability should apply not only to financial sustainability, but also with a view to considering the nature of businesses in the City and their alignment with the City Corporation’s wider corporate plan for the City including in relation to climate action, commitment to the London Living Wage, and so on. However, it was observed that many small and micro businesses did not have the capacity to have climate strategies or so on, with it urged that focus should instead be on making the scheme auditable, quick, and flexible. A suggestion was made that the United Nations’ Principles of Responsible Investment approach be looked at, this being an aspirational approach in nature.

·         Noting the source of the fund, it was observed that other areas of City activity paid for by City’s Cash were currently subject to funding cuts and had also suffered from the impact of Covid. It was, therefore, urged that this be borne in mind in future when the costs of this Recovery Fund were being met and that such areas not be targeted for any further contributions. The open spaces in particular were referenced, as these had been particularly vital for Londoners during lockdown, both in terms of physical and mental wellbeing, and required significant investment in terms of maintenance as a result.

• Several Members commented on the fundamental importance of getting footfall back into the City, as this Fund would not work in isolation and custom was required to keep businesses going.
• It was urged that the scheme be made measurable so that its effectiveness could be assessed, both in terms of stimulating the re-opening of businesses and stimulating an increase in footfall through increased workers back in the City.
• A suggestion was also made that the application scheme should be digitally-led, so as to mitigate against fraud, although it was also urged that “perfect not be the enemy of the good” in respect of policies and controls on the dispensation of funds.

Closing the debate, the Mover of the Amendment thanked Members for their support and reflected on the galvanising and enabling intention of this amendment. He stressed the importance of any system being user-friendly for businesses and, above all, focused on getting people back into the City.

Upon the amendment being put, the Lord Mayor declared it to be carried, unanimously.

The report as amended being then before the Court, the Lord Mayor declared it to be carried.

Resolved – That Members of the Court of Common Council:-

1.     Note the latest revenue budgets for 2020/21 (paragraphs 18 to 25).

2.    Agree the 2021/22 revenue budgets, including the following measures:

·         Note the overall budget envelope for City Cash incorporates 12% savings as agreed by the Finance Committee in December and are consistent with the approved savings flightpath.

·         Unfunded additional revenue bids: To be avoided during 2021/22 - 2024/25 and carry forwards from 2020/21 to be minimised.

·         Grants: Application of 12% savings, unless agreed co-funding arrangement is in place.

3.    Approve the 2021/22 Capital and Supplementary Revenue Project Budgets for City’s Cash amounting to £33.3m (paragraph 27).

4.    Approve the allocation of central funding of up to £17.7m for City’s Cash to meet the cost of the 2021/22 capital schemes. Release of such funding being subject to approval at the relevant Gateway and specific agreement of your Resource Allocation Sub-Committee at Gateway 4(a) (paragraph 29).

5.    Approve the allocation of central funding to provide an internal loan facility of up to £15.6m for the City of London School (CLSG) to progress its masterplan – release of such funding being subject to approval at the relevant Gateway and separate approval of the loan terms and conditions (paragraph 30).

6.    Delegate authority to the Chamberlain to determine the final financing of capital and supplementary revenue project expenditure.

7.    Agree the creation of a City of London Covid Business Recovery Fund to alleviate some of the worst effects of the pandemic upon the Square Mile’s support infrastructure and to enable the City to emerge with a functional and thriving economy, by drawing-down up to £50 million from City’s Cash balances and short-term financial investments, or alternatively financed through borrowing. Grants from the Fund will be made available to small and independent retailers and hospitality businesses together with those providing clinical and professional services (e.g. dentists and opticians) necessary for the successful return of all those who work in businesses in the City. Businesses applying for support from the Fund, the process of which must be easily accessible, must demonstrate that they are capable of surviving on a viable and going concern basis and that owners have taken necessary steps including, where possible, financial contributions to their business. Grants from the Fund would normally be dependent on the businesses also receiving substantial financial support (not just rent deferrals) from their landlords. Officers are instructed to bring forward a report to the next meeting of the Policy & Resources Committee, who will be responsible for the fund and its deployment, recommending arrangements and detailed criteria to implement the deployment of the Fund, including the appointment of professional firm(s) with relevant expertise necessary for providing advice and support to enable the Fund to commence making grants as soon as is reasonably practicable.