Issue - meetings

To consider the report of the Interim Head of Finance (to follow).

The chair explained that there was one appendix that is confidential (A6). It contained officer estimates of costs of the pandemic. If this needed further discussion it would need to be in closed session at the end of the public meeting.

Councillor Rawlins, Cabinet member for Finance, introduced the report.

The budget was constrained by less officer time being available and was very much a Covid-19 budget.  That said, bringing together a budget was a major task and the officers were thanked for their work. The Interim Head of finance had set the scene in the paper.

The Cabinet report presented for scrutiny brought together all relevant information to allow Cabinet to recommend to Council a revenue budget for 2021/22 and a capital programme for 2021/22 to 2025/26. It recommended the prudential indicators to be set by the council in accordance with ‘the Prudential Code’ introduced as part of the Local Government Act 2003.

It also contained the opinion of the council’s chief financial officer on the robustness of estimates and adequacy of the council’s financial reserves and contained the Medium-Term Financial Plan (MTFP) which provided details of the forward budget model for the next five years.

In last year’s budget, there was a £2.2 million deficit. This climbed to £6.5 million deficit by 2024/25, leaving £7.7 million of unallocated revenue reserves remaining.

This year’s budget assumed that the unallocated revenue reserves at the end of 2024/25 would be £17 million, and £11 million at the end of 2025/26. The burning of reserves was an existential threat long-term. We projected that £21 million of reserves will be used up over the five-year MTFP period.

We will be seeking a long-term sustainable framework from Government to provide understandable security to councils. Addressing these shortfalls was a priority.

There was a corporate plan in place now to guide the future. There was progress on a number of projects despite the limit on resources, and some projects needed to be scoped.

Other points:

• £5 increase in council tax was proposed - maximum increase allowed.
• Commercial property income has fallen due to Covid-19.
• There had been a slightly better settlement from government than was anticipated, leading to a more positive outlook.
• Base budget net expenditure grew by £2.6 million from 2019/20 base to 2021/22. Much of this will be tied down directly to Covid-19 costs. We had taken account of funding that had already been committed to by government.
• Paragraph 53 – revenue per resident is £131 per resident – we can apply 2.5 residents to each home = £328 cost per home. Last year was £126 per resident. Costs for South Oxfordshire are very low.

There was some positive progress:

• New office progress
• 5Cs negotiations progress and repatriating of staff
• Sales fees and charges items do feed beneficially into the budget.
• Proper stewardship of council properties
• Grounds maintenance brought in-house

Total net cost of Covid-19 to the council in this budget was £1.9 million.

The Interim Head of Finance reminded the committee that  ...  view the full minutes text for item 88