Agenda item

The coronavirus pandemic is a public health emergency as well as an economic emergency.  The Council has a significant role in supporting those affected in the District, in addition to the effect on the Council’s financial position.  The purpose of the report is to raise awareness of the issues and to inform Councillors of the actions taken to date, whilst starting to evaluate the potential financial consequences.

The Cabinet

          RESOLVED – That

(1)  The action taken and likely financial consequences contained in the report be noted; and

(2)  The continued lobbying of Central Government for additional funding be endorsed

Prior to introducing the report, the Cabinet Member for Corporate Support took the opportunity to thank all the staff of the Council for enabling and facilitating its work across all the different platforms for the benefit of residents.  He also thanked the Facilities Team, working in the background, for their hugely professional effort in erecting the new partitions in the receptions at Bognor Regis and Littlehampton, which had been completed within a very tight timescale.

The Cabinet Member for Corporate Support stated that the purpose of this report was to provide an update on the financial consequences of the Covid-19 pandemic.  He advised that the Group Head of Corporate Support would provide some more contextual information whilst the Financial Services Manager would add a further explanation of Appendix 1 which closely correlated to the Ministry of Housing, Communities & Local Government (MHCLG) return that was submitted on Wednesday 15 April 2020.  He also highlighted that the situation that this Council and Councils across the country were facing was unprecedented and had resulted in direct financial consequences in terms of loss of income and cash flow, additional expenditure had been incurred and there would continue to be significant cash flow implications.  He confirmed that this was going to be very much an ongoing situation and certainly in the short and medium term the impact on the cash flow position of the Council would be serious. 

            The Group Head of Corporate Support provided a brief overview of the current position by reminding Members that, in participating in various discussions on the Budget, it had been anticipated that Government funding would be considerably less for 2021/22 and only last night the Government had announced that the Fair Funding Review had been rolled forward yet again to 2022/23, which could only further affect the financial position of the Council.  He was of the view that there would be a probable recession and that less resources would be received by the Council in future years.

            An approximate estimate of the Council’s losses due to the emergency had been provided to the Government and in last night’s announcement, Arun was due to receive £1.6m towards those costs.  Whilst welcoming that, the Cabinet was advised that there would still be a significant shortfall and there would have to be careful consideration of the Council’s current budget and its medium term financial strategy going forward in light of how long the emergency might last and the resultant financial implications.         

The Financial Services Manager then presented the report which provided an update on the financial consequences of the corona virus emergency.  The summary tied up with the financial response supplied to the MHCLG on 15 April 2020.  It was stressed that, although the financial information was just a snapshot in time, it did provide a good overview of what was a fast moving environment, with the underlying assumption that the lockdown would continue for 3 months before things gradually returned to  some form of normality.

The Financial Services Manager advised that the estimates in Appendix 1 illustrated that the Council’s finances would be £2.4m worse off in 2020/21 and beyond and that that figure was dominated by the anticipated loss of income of around £1.9m.   The actual losses would depend on how long the lockdown continued and what the economy looked like when things returned to the new normal.

            The significant loss of income reflected the importance of fees and charges to the Council’s budget, and some of this would not be recouped, such as car park income.  Other estimates depended on how badly the economy was going to be affected which could, in turn, reflect in a potential reduction in collection rates in areas like Council Tax and Business Rates.  It was stressed that the estimates would change as more information became available.

To summarise and to put the fast pace of financial change into context, the Financial Services Manager advised:-

·         £1.6bn Government C19 Emergency funding was announced on 19 March – Arun’s share was just £64k

·         The MHCLG return was submitted on 15 April

·         The Cabinet Report was finalised   on 16 April and 2 days later on 18 April Government announced a further £1.6bn C19 support - with no detail of allocations.

·         The £1.6m grant announced last night was good news but the funding to date did not cover the Council’s anticipated losses.  Therefore a measured approach must be taken in supporting individuals and suppliers as resources were limited.

The Financial Services Manager concluded her presentation by reiterating that the figures provided in the report were subject to change and would be kept under review.

In discussing the report, Members again expressed their thanks to staff for their efforts in maintaining services.

 The Leader and CEO were thanked for their input into lobbying Government for a fairer share of the emergency funding that was being made available and the Leader confirmed that that had been done not just in respect of funding but also to stress the importance of the horticultural industry within the local economy. 

Following further discussion which centred around the effects of the lockdown on the physical and mental wellbeing of residents during the period of lockdown, the Chairman turned to a question from another Member.  A full schedule of questions, answers and supplementary questions and answers would be attached to the signed copy of the Minutes and would also be uploaded to the website as a separate document following the meeting.

The Cabinet

RESOLVED – That

(1)  The action taken and likely financial consequences contained in the report be noted; and

(2)   The continued lobbying of Central Government for additional funding be endorsed.

            The Cabinet confirmed its decision as per Decision Notice C/050/290420, a copy of which is attached to the signed copy of the Minutes.