Date published: 2021-07-15 | Category: Finance
A series of cabinet reports on Bath & North East Somerset Council’s finances reveals that early action to deal with losses arising from the pandemic has brought the council’s finances back on track, delivering a balanced budget for 2020/21 and enabling it to continue to invest in the priorities it set out in its budget this February.
However, the 2021/22 forecast does highlight that losses from heritage income may result in a projected £1.9m overspend at the end of the financial year without further action. It is still early in the financial year and the council will need to ensure all appropriate action is taken to maintain a balanced budget in 2021/22
The reports, due before cabinet on Tuesday 20 July, highlight how - despite the pandemic - the council delivered an on-budget outturn in 2020/21, with a slight improvement to its predicted end-of-year accounts. This was due to the early actions taken by the council to ensure financial recovery from income losses - especially in heritage and parking - as well as further underspends in adult social care services and the receipt of additional Covid Grant. The favourable outturn means the council can press ahead with its capital investment plans to deliver on its key priorities.
However, the reports to cabinet are clear that further financial challenges lie ahead unless additional Grant funding is forthcoming as Covid restrictions continue to impact income, particularly from the Roman Baths.
Councillor Richard Samuel, deputy council leader and cabinet member for Resources and Economic Development, said: “I am delighted that through our early action in the face of the pandemic and our prudent financial management we’ve been able to stabilise the council’s finances without drawing too heavily on our reserves.
“It is a significant achievement considering the financial pressures caused by the pandemic with substantial loss of income from our heritage, parking and commercial rent income combined with new Covid related expenditure.
“We are in a position where we can press ahead with delivering on our Corporate Strategy commitments, particularly relating to tackling the climate and ecological emergency.
“It means we can continue to invest this year in our priorities to improve people’s lives by creating cleaner, greener communities, helping the local economy recover and protecting the most vulnerable.
“However, there are words of caution that I’d like to say. If the third wave is followed by a fourth wave and further restrictions that affect our key income streams are imposed, I have not ruled out the need to take emergency action to control expenditure this year as I did last year.
“I’m under no illusions that we are out of the woods yet and we will continue to face financial challenges posed by the pandemic for a number of years.”
The Budget agreed by Council in February this year allocated £9.11m
of investment to schemes which tackle the climate and ecological emergency, including two new Renewable Energy Funds totalling £1.9m for renewable energy projects and to retrofit the council’s own energy plant and equipment, as well as support for the natural environment through the £5.11m Bath River Line project. £1.5m was also allocated for Two Rivers Primary School to provide a local contribution to ensure delivery to Passivhaus Environmental standards.
Since then, investment plans for the climate and ecological emergency have received a boost through Public Sector Decarbonation Programme projects for Cleveland Pools and Charlton House, bringing the total capital allocation to £10.109m
Funding has also been earmarked for transport schemes including a £2.2m investment in Liveable Neighbourhoods to promote healthier, more sustainable communities and reduce car usage.
While the council’s finances are on track the pandemic delayed some capital schemes last year and so cabinet are recommended to approve re-phasing the majority of these into the current financial year. This includes £1.4m from the council’s Transport Improvement Programme to deliver schemes which were delayed due to their complexity and the fact that staff were moved to work on emergency Covid measures.
Cabinet will be told that the council is well-placed to sustain its investment programme as its total borrowing of £243.5 million remains well below its provisional Capital Financing Requirement of £326.9 million.
Councillor Sarah Warren, deputy council Leader and cabinet member for Climate Emergency and Sustainable Travel said: “Increasingly, the council is moving its resources- particularly capital spending- into projects which tackle the climate and ecological emergency, including sustainable travel projects . This is reflected in the budget we agreed in February this year and is only possible because we have manged the council’s budgets effectively at a time of significant challenges. I am looking forward to seeing these investments bear fruit over the coming months and years”
The reports to cabinet can be found here