Date published: 2020-11-12 | Category: Finance
A report outlining Bath & North East Somerset Council’s finances, the financial impact of Covid-19 and the effect it will have on its spending plans is to go before the council’s Policy Development and Scrutiny Panel on Monday 23 November.
The report is the first stage in the council’s budget setting process for the coming financial year.
The Medium-Term Financial Strategy (MTFS) provides a framework for the council to maintain a sustainable financial position and balance its budget. It sets out the council’s current financial position, the challenges it faces and its strategy for addressing the funding gap.
The MTFS was agreed by Cabinet on 8 October following a report to cabinet in July which said the council must reassess its spending plans in the light of lost income as a result of the pandemic, maximise new sustainable income opportunities and take action to achieve savings with minimal disruption to services and residents. However, the report concluded the council should continue to focus on delivering its Corporate Strategy, including its key roles to improve people’s lives and tackle climate change, which it said were central to helping support recovery and renewal amid the challenges of Covid-19.
Councillor Richard Samuel, cabinet member for Resources, said: “At the height of the first lockdown the council lost £91,000 every day just from parking and heritage income. We also lost significant income from rents and business rates. As we responded to the pandemic, supporting the most vulnerable and supplying PPE, our costs increased. As a result, we were faced with an unparalleled financial challenge.
“Despite financial support from the Government, in July our forecast deficit for this year stood at £10.7m. It was clear we had to take action and we did so immediately, responding with robust recovery measures to stabilise our finances whilst still delivering essential services. Five months on, I’m very pleased to report that we are now heading for a slight underspend, avoiding the need to use our reserves.
“However, it is clear Covid will have a long-term impact on our finances and we must address this. The report estimates we will need to find £29m in savings over the next five years, so it is vital we have a robust budget process in order to deliver our priorities within affordable and sustainable financial restraints.”
To date the council has received one-off Local Government Support Grants totalling £26.7m to meet Covid pressures on the council and an additional £58.1m in Covid grants to support the community and business sector. However, the report warns the council must assume that no further grant support will be available next year, and it should therefore set a transitional budget which enables it to recover from the effects of Covid-19 and to live within its means.
The report outlines the council’s predicted income for 2021/22. It says this will fall approximately £20m short of its budget requirement. It therefore proposes to draw £10m from reserves and make £9.2m of savings across services.
In order to deliver a balanced budget, the report says the council will need to:
- deliver savings to enable it to live within its means whilst continuing to provide frontline services that support residents such as Adult Social Care.
- increase Council Tax to fund both inflationary pressures and increases in service demand and to ensure a fixed income stream.
- think and invest in services differently ensuring capital investment addresses council priorities.
A series of webinars on the council’s budget will take place next month.
Residents will be able to put their questions to the council’s Leader, Councillor Dine Romero, Deputy Leader, Councillor Richard Samuel, Chief Executive Will Godfrey and Director of Finance Andy Rothery.
The webinars will take place on:
- Tuesday 15 December 5.30pm
- Friday 18 December 2pm
- Tuesday 22 December 12 noon
Further details will be made available.
The council will consider comments before drawing up it’s final budget proposals early next year ahead of its Budget and Council Tax meeting on Tuesday 23 February 2021.
To view the report visit: