Agenda item

Maria Gee had asked the Executive Member for Finance and Housing the following question. Due to time constraints the question was not asked and the following written answer provided:

Minutes:

 

Question

Regarding Item 7, Appendix B Estimated General Fund Balance.  The balance on the general fund is now predicted to be £5.1 million at 31 March next year, which is very worrying and unsafe. It should be at a safe level of between £9.3m and £14.3m. This Council has to set the balance in this range as this is policy, because the Council should be taking risk into account and practising good financial management.

 

Risks were identified in the Medium Term Financial Plan as increasing significantly in 2020/21, and include the risks of further grant reductions, additional service pressures, dependency on future commercial income, and risks around business rate receipts. These risks are certainly higher as a result of the pandemic.

 

Given that the Government is running out of money, and there is a risk of a second wave of Covid 19 over winter, what plans does the Council have to get the general fund balance back up to the safe level, should lobbying not be successful?

 

Answer

Despite the fact that this Council has been one of the best financially managed Councils in the country over many years, as demonstrated by the independent assessments set out in the Executive Report, we are indeed facing considerable financial challenges as a result of Covid 19. We have incurred considerable additional costs to support our most vulnerable who have been dependant on our support during such difficult times and we have lost considerable income from activities that help fund what we do, such as car parking and leisure. As I am sure you are aware the financial impact of this pandemic is being faced by local authorities throughout the country with numerous claiming publicly that they are no longer sustainable.

 

The judgement of whether this Council has safe balances and its medium to long term financial viability rests with our Statutory Finance Officer, our CFO, who was the author of the MTFP you refer to. It is not a judgement that sits with our politicians.  As the Lead Member for Finance you will understand that we discuss the finances of the Council almost daily.

 

We continue to recognise the importance of strong and robust financial management of our Council taxpayers’ money. This will involve ensuring our expenditure remains targeted to those most in need and delivering the key objectives of the Council. We will continue our endeavours to maximise our income streams where appropriate to fund the growing gap between Government grant and the costs of delivering our statutory services. We will further embrace new and innovative ways of working to ensure the provision of our services are most cost effective and efficient in delivering services to our residents whilst maintaining or improving the customer experience. And, as you referenced in your question, we will continue to make representations to the Government to seek the best funding deal for our community.

 

This work is already underway and in many ways it has never stopped, it just needs to be taken with greater intensity. It also needs to be taken in a calm, considered and planned way focused on achieving the medium term to long term health of the organisation rather than making knee jerk quick fix solutions to restore balances immediately which could generate catastrophic service and financial outcomes further down the road. I am confident we have the calibre of politicians and Officers to do this the right way and in the way we have collectively successfully addressed our financial challenges in the past.