Decision Maker: Council
Decision status: For Determination
Is Key decision?: Yes
Is subject to call in?: No
To consider the corporate financial update
Quarter 2, 2020/21 and approve requests for budget virements and
re-profiling of budgets between years.
Councillor Andrew Jarvis, Finance and Resources Portfolio Holder presented the Corporate Financial Monitoring report which summarised the position of the Council at the end of Quarter Two of 2020/21. He reminded Members that the financial reports were more complicated than usual this year due to the by the Covid-19 crisis and the amendments that were made to the budget earlier in the year.
Councillor Jarvis focussed first on the latest view of the impact of Covid-19 on the Council’s budget drawing attention to a net cost to the Council of £1.67m and although higher than initially expected, the increase would be more than offset by the 75% compensation for lost income. He further referred to the fact that since preparation of the report, a combination of additional grants and strong car-parking income had further improved the outlook and, consequently, the cost of Covid-19 for this year presented to Cabinet in the last version of the Medium Term Financial Plan was closer to £1.3m.
Councillor Jarvis informed Members as regards the “business as usual” performance of the Council and a forecast overspend on this year’s activities of approximately £216,000, with a further £75,000 to be carried forward to next year. He provided details regarding specific requests in respect of the revenue budget. The report also provided an update on the Capital Programme, the full year budget for capital for 2020/21 being a little over £22m. Councillor Jarvis explained how the pandemic had impacted on many of the projects being worked on, resulting at the end of Quarter 2 in just under £2m in capital being spent. Capital expenditure had, therefore, been reviewed for the remainder of the year, with a proposal for just over £10m to be reprofiled. He stressed, however, that at this stage no capital expenditure had been cancelled although projects’ timing and feasibility would need to be further reviewed in the light of Covid-19 and he expected to provide more information on this during the Medium Term Financial Plan cycle.
Councillor Jarvis referred to Sundry Debts, the report highlighting that collection of Council Tax, Business Rates and sundry debts was running well below last year. Until recently, enforcement of recovery had not been possible due to the closure of the courts. The Council was also very aware of individual and corporate difficulties due to lockdowns. A recovery specialist had recently been employed and the Council was trying to approach this issue in a very sensitive manner. However, Councillor Jarvis pointed out that the Council had a duty to all tax payers and had to ensure that those who could pay did so. He drew attention to help on offer through the local Council Tax Reduction Scheme and the related hardship scheme. Importantly, he explained that any deficit on Council Tax and Non-Domestic Rates would not hit this year’s budget, but would exacerbate the financial situation in future years.
Councillor Jarvis acknowledged that the Council’s staff were under great pressures at the moment with the Covid-19 crisis and a huge workload. He was particularly grateful to the Finance Team for the work being done to continue to ensure proper running of processes and to provide timely information on the financial position of the Council.
Councillor Jarvis moved the recommendations contained within the report and was seconded by Councillor Giles Archibald, Leader and Promoting South Lakeland Portfolio Holder.
Councillor Robin Ashcroft, Economy, Culture and Leisure Portfolio Holder, prior to commencement of the debate, provided Members with an overview in relation to regarding Kendal Vision funding towards the development and delivery of agreed activities for which had been discussed by Cabinet on 8 December 2020 at CEX/04. He drew attention to the significant challenges faced by the Town as a result of an increase in online shopping and decline in high street retail, also exacerbated to the Covid-19 pandemic. In addition, he pointed out the challenge as a result of the aging population in South Lakeland and the need to attract young people to live and work in the area. Councillor Ashcroft felt that there was an opportunity for positive change, the Council and the Kendal Futures Community Interest Company, in collaboration with local stakeholders and community groups, having developed an ambitious vision and strategy to transform Kendal.
In response to a Point of Order raised by Councillor Archibald who felt that Councillor Archibald, in his role as portfolio holder, should remain connected to the meeting during discussion, the Legal, Governance and Democracy Lead Specialist (Monitoring Officer) explained that she had, prior to the meeting, discussed the matter with both Councillor Ashcroft and Councillor Susanne Long, who both shared the view that they did not wish to potentially influence the debate by remaining in the meeting.
Note – At this point in the proceedings, Councillors Ashcroft and Long disconnected from the meeting for the remainder of the discussion and voting on the item, for the reason outlined within C/76 above.
In response to a query regarding variances and the £212,000 adjustment following the audit of Housing Benefit Subsidy Claims for 2017/18 and 2018/19 to be offset by use of reserves, Councillor Jarvis explained that these minor adjustments related to prior year adjustments and were made each year and by all councils. The problem was that they had been taken through the accounts in the wrong manner in the prior two years and then discovered during the audit process this year. Rather than correct last year’s accounts, they had been adjusted in this year’s. The balance sheet was correct but there had been a need to put them through the revenue account. The figures had nothing to do with current issues. In response to a further query as to whether there was likely to be an additional burden on reserves into the future, Councillor Jarvis explained that 2019/20 would be the same as each year, with some degree of truing up at the end of the year. The Finance Lead Specialist (Section 151 Officer) expanded, explaining that the Subsidy Claim was currently being audited and that there would be some final figures, probably by January 2021 which would be reported to the Audit Committee in either February or April. She explained that the overall adjustment was on two claims that together covered £33m and was a relatively small adjustment in terms of the total amount. She further informed Members that these adjustments were becoming smaller each year, with more specialist staff now being dedicated to the process.
Note – At this stage in the proceedings, Councillor Janette Jenkinson, seeking advice from the Legal, Governance and Democracy Lead Specialist (Monitoring Officer), declared an Other Registrable Interest by virtue of being a Trustee of the Coronation Hall. Whilst she had no financial interest, for the sake of transparency, she would disconnect from the meeting following raising a question on reprofiling of the Capital Programme in relation to the Hall.
Attention was drawn to Capital Programme reprofiling and the sum of £39,900 shown for Coronation Hall queried. Attention was drawn to the fact that a sum of around £70,000 had been left over following Ulverston Town Council having moved offices, that money having been promised for refurbishments at the Coronation Hall. Councillor Jarvis undertook to ensure that a written response was provided by officers and copied to all Members.
Note –Councillor Jenkinson disconnected from the meeting for the remainder of the discussion and voting on the item, for the reason outlined above.
The report was welcomed and support expressed in particular for the proposals for Kendal Town Centre which, it was felt, were vital in terms of the wider economy of the area. Reference was made to the need to build back following Covid-19 and to the golden age of playgrounds within South Lakeland and of their importance during the pandemic. Pride was expressed with regard to the hard work of officers during the pandemic, assisting individuals and businesses. The need for the Government to properly fund councils in the north of the country was stressed, particularly in the light of Covid-19.
Councillor Archibald, as seconder for the proposals, referred to an earlier question and explained that there was still an amount of £79,800 in the budget for the Coronation Hall alterations and that the £39,000 was simply regarding reprofiling. He referred to the impact of Covid-19 on the Council’s finances, however, explained that the Authority was in a fairly good position due to the excellent work which had been carried out by officers and portfolio holders. Although there would be a budget gap, Councillor Archibald remained confident that this would be filled. He made particular reference to infrastructure projects and explained that the Council was determined, where possible, to push ahead with ambitious projects such as Ulverston Leisure Centre, Grange Promenade and Lido, enhanced flood defences, Swarthmoor Roundabout and Disablity Toilets. The Council still had to push ahead with plans to regenerate, maintain and update its assets. He thanked Councillor Jarvis and officers for their work on the report.
No Member having raised concern when asked by the Chairman, it was
RESOLVED – That
(1) the contents of the report and Appendices 1 to 4 be noted;
(2) the re-profiling of the Capital Programme as shown in section 3.2.3 of the report and Appendix 3 to the report be approved; and
(3) further to Cabinet’s decision on 8 December 2020, the following be approved:-
(a) the carry forward of unspent estimates, as set out in section 3.1.2 of the report and Appendix 5 to the report;
(b) the virement of £92,800 from the Community Housing Fund in section 3.1.3; and
(c) the use of £150,000 from the NNDR Pooling Reserve, £135,294 from the Kendal Town Centre Masterplan and up to £246,000 of Section 106 funding, as set out in section 3.1.4.
Report author: Claire Chouchoulas
Publication date: 11/02/2021
Date of decision: 15/12/2020
Decided at meeting: 15/12/2020 - Council