Minutes:
The Deputy Leader introduced
the report and explained that it outlined the economic impact of
COVID-19, as Thurrock moved away from a balanced MTFS budget, which
had been in place since 2018, and towards a deficit. He stated that
some local authorities were having to bring an in-year emergency
budget to Council due to their deficits, but Thurrock were not in
that position as the Council were better equipped due to reserves
and other income sources. He stated that at the beginning of the
2020/21 municipal year, Thurrock had been in a £4million
surplus, but due to COVID, that would be used to reduce the new
in-year deficit down to £2million. He stated that central
government had given Thurrock £10.8million in support, but
the Council would experience £6.3million of pressure above
this government support, due to a reduction in fees and charges,
the cessation of some capital strategy activity, a reduction in
council tax and business rate income, and other COVID-related
pressures. He added that last municipal year the Council had
reversed deficits of £1.5million, and felt that the Council
could do it again this municipal year.
The Deputy Leader outlined other pressures that the Council would
potentially face in the future, and gave examples such as an
increased number of Local Council Tax Scheme (LCTS) claimants, an
increase in the number of people presenting as homeless, and a
reduction in income from Thameside Theatre. He added that the
Ministry of Housing, Communities and Local Government would be
outlining potential additional support for local authorities
towards the end of 2020, but as this was not confirmed, was not
included in future budget plans. He confirmed that investments were
still yielding income as the renewable energy sector had not been
influenced by the global pandemic. He mentioned that following the
pandemic the Council could see a potential deficit of
£19million in 2021/22.
The Deputy Leader moved on and outlined pressures to services which
would also potentially reduce the level of Council income, but felt
that Thurrock would be in a worse position if surpluses had not
increased by 131% since 2016. He stated that council tax and
business rates were accounted using national working practices, but
Thurrock had made representation to the IRRV and LGA to ensure that
accounting practices had been relaxed over the summer to ease with
problems associated with lack of receipts. He added that the
Council would still experience £13million directly related
COVID pressures, and that if COVID had not occurred adult social
care would be experiencing £50,000 underspend currently; the
Place directorate experiencing £0.2million pressure and other
teams such as environment and finance would be breaking even. He
summarised and stated that the Council would be in a balanced
position if COVID had not happened.
The Deputy Leader outlined the need to look at the social care
sector’s financial base in a post-COVID world. He stated that
Children’s Services were expecting to see increased pressure
because of COVID as more unknown and new children entered the
system, which would lead to potential additional spend of
£0.9million, but Thurrock were committed to ensuring that
every child was safe and received a positive outcome. He added that
the Council had also lost £1million income from education and
care providers due to the closure of schools and nurseries during
lockdown. He explained why the environment team were experiencing
increased pressures, which included lost income from the closure of
Impulse Leisure during lockdown, who had now been trading for three
weeks. He added that the environment team had also seen increased
pressured due to increased PPE spend;
reduction of trade waste income; and reduction of car park fees
income. He outlined pressures on the place directorate due to
COVID, which included lost income from the closure of Thameside
during lockdown and reduction in income from planning fees and
charges. He stated that Cabinet had approved £1million of the
dedicated growth reserve being spent on the third stage of the
Local Plan, as this would help boost the local economy through
house and infrastructure building.
The Deputy Leader explained that families were experiencing
financial struggle in many ways, and the questions families were
asking, were the same questions the council were asking itself. For
example, when a family fell into hard financial times they looked
to savings to help them. Thurrock also used savings in the form of
general reserves and investments, which had been endorsed by Full
Council in 2017. He felt that if the Council were prudent with
their surpluses then the Council could absorb some COVID pressures,
but the current plan was not to let the general fund reserve fall
under the 2016 level of £8million. The Deputy Leader added
that when a family fell into financial difficulties they tried to
increase income, and the Council would need to do the same. He
explained that Council tax was modelled as increasing during every
year of the MTFS, as it was always modelled, and there were no
plans to change that. He added that the Council would also need to
consider adopting any future Adult Social Care precept to support
sector resilience. He stated that when the market for investments
was open, it was the plan to help the Council reform services over
the longer-term, and that the Council would need to begin to work
towards self-sufficiency from government revenue funding, but was
also a Council which was smaller and more rationalised. He stated that the Council Spending Review would
be continued and quickened, and that elements of the capital
programme were under review, and like households across the
borough, the Council needed to look at what could be done in a few
years, rather than what it may have planned to do at the start of
the year.
The Deputy Leader summarised and stated that Thurrock were working
hard to ensure a balanced budget and an update would be presented
at October’s Cabinet meeting.
RESOLVED: That Cabinet:
1. Commented on the MTFS and the forecast outturn position for
2020/21.
Reason for decision: as outlined in the
report
This decision is subject to
call-in
Supporting documents: