Agenda item

(Report by the Head of Finance)

REASON FOR DECISION

Councillor Howard presented a report,providing an update on the measures introduced by the Government since May 2020 in response to the Covid-19 pandemic, the Council’s actions and the impact on the Council’s finances.

The report stated that the last few months had seen unprecedented changes in the way the Council and the wider economy operated as a consequence of the global pandemic.  Cabinet had received a report in May which outlined the situation at that time.

The Council had been helping support the Government response through the payment of Business Grants amounting to over £14m, business rate reliefs had been processed totalling £9m, as well as the additional award of Council Tax Support.

Since May the Government had made further announcements which impacted on the Council in terms of administering grants for businesses and those which directly impacted on the Council’s budget and its actions to support the response to the pandemic, namely Discretionary Business Grant Fund and Re-opening of the High Streets.

The most significant pressure facing the Council during 2020/21 would be income losses across a range of discretionary services as well as through its investments. Using current assumptions it was projected that the budget for 2020/21 would be adversely impacted by approximately £1.75m.

Impact on service demands in the short and medium terms were anticipated to include:

• Likely increase in homelessness cases and demands
• Increased demands on the Housing Benefit Team
• Increase in those eligible for the Council Tax Support Scheme
• Probable longer term increases on the Council’s pension fund contributions
• A likely increase in contributions required to the bad debt provision

In the longer term, there were concerns around the council tax base and business rate income.  Future updates would include commentary on the rate of collection of Council Tax and Business Rates to enable a more accurate assessment of the impact of the pandemic to be made.

The Capital Programme would also be affected, key risks identified for future programmes included:

• Risk to external funding from Government Departments and external partners e.g. Homes England, developers
• Risk to anticipated housing growth
• Risk of increased costs due to time delays and inflationary costs
• Impact upon economy in the longer term and the housing market affecting the viability of scheme that were currently at feasibility stages.

The Local Government Association (LGA) was continuing to lead national lobbying efforts on behalf of all local councils.   Lincolnshire’s council colleagues continued to collectively lobby the LGA, the District Council’s Network (DCN) and the Society of District Council Treasurers (SDCT) to highlight the likely consequences for local councils if adequate financial support was not forthcoming form the Government.  The Ministry for Housing, Communities add Local Government had introduced a monthly request for information on the financial impacts on councils, but Government was still considering its response.

Further financial support from Government would ensure that unbudgeted costs and reducing income levels did not have a longer term detrimental impact on the Council resulting in service reductions in subsequent years. Whilst the two tranches of funding had been welcomed, they were insufficient to cover the current year’s costs and loss of income. 

Update reports would continue to be presented to Members as the situation progressed