Agenda item
Financial Update Quarter 2 2020/21 (Decision: 110538)
Minutes:
Councillor Hebb introduced the
report and stated that central government had recently made a
top-level announcement regarding government funding for
Council’s, but Thurrock were currently waiting for the detail
of this to fully understand the Council’s position. He stated
that Thurrock were currently in discussions with the Ministry of
Housing, Communities and Local Government, and the outcome of these
discussions would be known next week. He stated that central
government’s spending review would affect Thurrock’s
position in a positive way, but would not fix all financial
problems currently being faced. He added that the 2% increase limit
for Council tax was still in place, as well as the 3% increase
limit for the social care precept, which was now more important
than ever due to COVID. He highlighted that the Council’s
current calculations suggested financial pressures in the budget,
and although the COVID vaccine was moving forward, financial
pressures due to the pandemic would continue to be felt for years
to come.
Councillor Hebb stated that since 2018, the Council had always had
a balanced budget for four out the five years on the Medium Term
Financial Strategy, but the Council were now in a deficit of
£33.6million over the next four years due to COVID. He stated
that the next financial year was when the Council would experience
the most financial pressure, with a funding gap of
£19million. He added that although some Council’s
around the country had had to bring an emergency in-year budget to
their Full Council meetings, Thurrock were not in that position,
although the Council would be setting its budget up until the
eleventh hour, which was the case around the country. Councillor
Hebb added that Thurrock were working with central government to
find ideas to tackle the budget deficit, but highlighted that some
ideas would not work. He commented that the Council wished to do
whatever was in their control to reduce the deficit without
affecting services to residents, or increasing council tax.
Councillor Hebb added that had the pandemic not occurred then
Thurrock’s budget would have broken even. Councillor Hebb
then outlined current service pressures, such as Children’s
directorate which was currently experiencing a pressure of
£0.9million, or 2% of their overall total budget. He stated
that this was due to an increase in the number of children
presenting to the service, and an increase in the number of complex
cases. He mentioned that Thurrock were not currently planning any
new investments, as there was currently no market for new
investments and confidence had decreased. He stated that all
Councillors had voted for the investment strategy which had helped
maintain the delivery of non-statutory services and reduced the
financial burden on residents. He added that for the sixth year
running the Council’s audit had been signed-off by external
auditors as being within target, and this had also been agreed by
the Standards and Audit Committee.
Councillor Hebb then added that the Council were currently
experiencing £15m in-year pressure, although Thurrock were
receiving SR20 support. He added that Thurrock were also
experiencing £4.3m in adult social care pressure, which would
increase post-COVID, as well as £2.2m spent on rough sleeping
accommodation, which had ensured that those homeless residents in
Thurrock had been kept safe during the pandemic.
Councillor Hebb commented that the capital programme had been
paused, which would provide £13m in savings, and the capital
budgets were also under review. He stated that as of 30 September
2020, Thurrock had borrowed £3bn, and investments had been
agreed by all Councillors in 2017, 2018 and 2019. He stated that
Thurrock had also recently had discussions with the Public Works
Loan Board, but this was not to borrow for new investments. He
summarised and stated that although there were ongoing financial
pressures from COVID-19, the Council were in a good position due to
increased reserves.
Councillor Halden commented and stated that he was proud of the
social care team, and thanked the Corporate Director of Adults,
Housing and Health; the Corporate Director of Children’s
Social Care; and all frontline staff for their hard work throughout
the pandemic. He stated that even during this difficult time, the
Council were still supporting those in need in the borough, such as
through tax cuts for foster carers, the Resiliency Fund, and new
housing for the Head Start Housing project. He added that the
consultation regarding domiciliary care had ended today, which
would help reduce market threats. Councillor Halden added that the
social care teams had a difficult challenge ahead, as the economic
impacts from COVID affected people’s social situations, and
increased the number of domestic violence and mental health
incidents across the borough. He stated that although government
grants would help with the COVID-19 pressures, and social care
market would continue to see increased demand and more complex care
cases to deal with.
The Leader stated that the Council had been in a good financial
position before the pandemic had hit, and although government
grants did help, they did not fully cover the financial pressures
being experienced by the Council. He added that the Council were
being affected by the pandemic in numerous different ways, such an
increase in people claiming Local Council Tax Scheme support; a
reduction in the number of houses being built, so no increase in
council tax; and a reduction in car parking fees. He stated that
the additional pressures had been unexpected and significant, and
Thurrock would have to pay for 75% of its lost income, with 25%
being paid by central government. He stated that Council
expenditure would need to be rolled back, but projects that had
already been started would continue.
RESOLVED: That Cabinet:
1. Commented on the MTFS and the forecast outturn position for
2020/21
2. Agreed that Thurrock’s 2021/22 schools funding formula be
implemented as stated in section 16. This being consistent with
Cabinet’s decision made in February 2020.
Reason for decision: as outlined in the
report
This decision is subject to call-in
Supporting documents: