Report of the Deputy Chief Executive and City Treasurer attached

This report outlines the projected outturn position for 2020/21, based on spend and income as at the end of May 2020 and future projections.

The Committee considered a report of the Deputy Chief Executive and City Treasurer which outlined the projected outturn position for 2020/21, based on spend and income as at the end of May 2020 and future projections.

The main points and themes within the report included:-

·                An overview of COVID-19 financial implications, which included a forecasted outturn position of £5.476m deficit which was anticipated to be balanced by government funding;

·                Details of additional Central Government funding for COVID-19 response;

·                An overview of the overall forecast financial position 2020/21;

·                Measures that would be taken to balance the budget in 2020/21; and

·                Proposals for the use of budgets to be allocated, grants in addition to those already planned, proposed virements, increases to Directorate budgets and the use of reserves in addition to that already planned, which all required Executive approval.

The report and proposals contained within would also be considered by the Executive at its meeting on 29 July 2020.

Some of the key points that arose from the Committee’s discussions were:-

·                Was the £4.837million allocated to rolling out of a local Test and Trace programme sufficient

·                Would local authority staff be included in the recent announcement by government of public sector worker pay rises and if so would this be built into the Council’s projected budget;

·                It was suggested that the Council pro-actively communicate with Manchester residents on the true impact of COVID19 on the Council’s future financial arrangements;

·                What, if any, assurance was being given by the Government that they would be reimbursing the Council for the costs it had incurred in tackling the impact of COVID19;

·                Was there any indication that there would be financial support from Government from the loss of revenue income from Manchester Airport;

·                It was concerning that the deficit of approximately £19 million within the HRA would result in the level of reserves being exhausted over the course of the next three years;

·                Why was there such a significant underspend in terms of the Children’s budget for No Recourse for Public Funds (NPRF), how many children in the city were within families with no recourse to public funds, was it considered generally appropriate to treat this underspend as a saving given the doubt recently cast over the legality of the NRPF scheme, and had any equality impact assessments been undertaken in using this underspend as a potential saving;

·                Concern was expressed that savings were being proposed around unaccompanied Asylum Seeking Children and clarification was sought as to how these savings were being proposed; and

·                Were any additional resources going to be provided to support the Section 21 Team when the suspension of evictions ended on 23 August 2020.

The Leader advised that the £4.837million was allocated for the tracing element of the project as the funding for the testing element was separate from this amount. He added that this money was adequate in so much as it covered cost until the end of the year, but further funding would be required to continue beyond the end of the year.  In terms of the recent government announcement of pay rises to public sector workers, he advised that it would not include local government workers, but what was not clear was whether the pay rises would be fully funded by the Government, as in previous occasions it had not been and had been left to local authorities to make up the difference.

The Committee was advised that there was no assurance coming from Government that they would reimburse the total expenditure the Council had made in tackling the impact of COVID19 and that their position on funding to local authorities from the start of the outbreak had changed from supporting no matter what to sharing the burden of cost.

The Deputy Chief Executive and City Treasurer reported that the Government had not to date provided any financial support to the Council for the loss of revenue income from Manchester Airport.  The Leader added that the Council would continue to lobby the government on this issue as the real financial impact of this loss would not be felt until the 2021/22 financial year.

The Deputy City Treasurer commented that the forecasted £18.961million deficit on the HRA was not attributed to the impact of COVID19, and was in relation to planned investment in capital works in the HRA which would be funded through reserves.  The COVID19 impact on the HRA was closer to approximately £2million.

The Deputy Chief Executive and City Treasurer agreed to provide a response to the questions posed around No Recourse to Public Funds following the meeting.  The Leader added that the Council, through the LGA, regularly lobbied government about the inadequacy of the amount received to support adults with NPRF.

The Deputy City Treasurer advised that the underspends around unaccompanied Asylum Seeking Children would be achieved through additional grant funding from Government.  This would now cover some of the additional costs in this area that the Council had been expecting to have to fund at the time the budget was set.

The Leader commented that he received a weekly report from the Council’s Homelessness team which was reporting an increase in referrals from families and individuals, but the reason for this was not due to evictions.  Government had announced national funding to tackle homelessness but it was not clear how the Council could access this at present.

Decisions

The Committee:-

(1)       Notes the report

(2)       Places on record its dissatisfaction with Government for its failure to recognise all key workers in its announcement of public sector pay rises, including local authority staff, who have been and continue to work tirelessly throughout the COVID19 pandemic

(3)       Requests that the Committee is provided with a briefing note on the questions asked around No Recourse to Public Funds.