Report of the Deputy Chief Executive and City Treasurer

The report will set out the impact of COVID-19 and other pressures and changes on the Council's budget for the period 2021-2025.  It will summarise the savings options under consideration from 2021/22 as well as set out the approach to Equality Impact Assessments and consultation as part of the budget setting process. It also sets out next steps in the budget process, including scrutiny of the draft budget options by this Committee.

Separately the report sets out the impact of COVID-19 on the capital programme and the implications for the budget.

The Committee considered a report of the Deputy Chief Executive and City Treasurer that set out the impact of COVID-19 and other pressures and changes on the Council's budget for the period 2021-2025.  The report also set out the impact of COVID-19 on the capital programme and the implications for the budget.  The report stated that the budget reflected the fact that the Council had declared a climate emergency by making carbon reduction a key consideration in the Council’s planning and budget proposals.

The main points and themes within the report included: - 

• The Medium Term Financial Plan remained challenged by uncertainty, which included the outcome of the Spending Review and post 2021/22 the potential changes to how local government funding was distributed; 
• Prior to COVID-19 there was an underlying budget gap of c£20m for 2021/22 rising to c£80m by 2024/25; 
• Dealing with the impact of COVID-19 had resulted in major spending pressures, particularly in social care, but also across all Directorates; 
• The forecasted budget shortfall relating to COVID-19 pressures and the Budget Position 2021/22 to 2024/25; 
• Initial proposals across all Directorates to start addressing the budget gap in advance of the Spending Review and Local Government Financial Settlement; 
• The need to undertake an Equality Impact Assessment on the options put forward, particularly those that involve impacts on services for residents and reductions in the Council’s workforce; 
• Proposed consultation on budget options and timescales; and   
• Next steps. 

The Committee also considered a report of the Strategic Director (Neighbourhoods) which estimated that the Council would have a budget gap of £105m in 2021/22 increasing to c £159m in 2022/23 and stated that all Directorates had been seeking to identify savings options for consideration by Members.   The report set out the details of the initial savings options proposed by officers for the Neighbourhoods Directorate.

The main points and themes within the report included: - 

·         Background and context;

·         The Directorate’s current budget position and in-year forecast;

·         Savings options for 2021/22 onwards;

·         Further considerations;

·         Workforce implications; and

·         Equalities.

The Committee was invited to comment on the reports prior to their submission to the Executive on 11 November 2020.

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

·         That the Council was in a very difficult financial position and that more funding was needed from the national Government but that, in the absence of this, difficult decisions had to be made to set a balanced budget;

·         Whether the savings set out in the report in relation to parks were achievable and how they would be made;

·         Concern about the costs of maintaining leisure centres and providing funding to Greenwich Leisure Limited (GLL) during the pandemic, possible ongoing subsidies to GLL and whether any of this money could be recouped from the Government;

·         That the Council should only be supporting private companies such as GLL as much as was necessary, for example, to prevent them going out of business where that would be more costly to the Council, as this had to be considered against other priorities such as preventing homelessness, and that, in the current climate, the Council needed to prepare for the possibility that a company the Council had outsourced services to could go out of business;

·         Concern about the potential impact on the income budget of ongoing restrictions related to COVID-19 and what steps were being taken in relation to that, including quantifying the amounts and identifying possible further savings;

·         That Equality Impact Assessments (EIAs) should be carried out at the earliest appropriate time and used to inform decision-making and that this should be more clearly set out in reports;

·         To ask that the next report on the budget proposals include information on what the Council’s statutory obligations were, to enable Members to see where cuts could be made without breaching those obligations; and

·         That the Executive should take into account the possible unintended consequences of the Council’s budget decisions on partners, including the Voluntary Community and Social Enterprise (VCSE) sector.

The Head of Parks, Leisure, Youth and Events reported that £12 million capital investment had previously been allocated to invest in parks to help generate income streams from parks and to reduce their operating costs.  He advised that income from parks had been increased by about 40% over the past four years and he stated that his service was confident that the income targets were achievable, although he acknowledged that any restrictions on trading which lasted into next spring and summer represented a risk to this.  He reported that previously the intention had been to re-invest this additional income to improve parks but now it was proposed that this money would be used to balance the Council’s budget and maintain parks at their current standard.  A Member requested that details of the proposed investment programme for parks be included in a future report to the Committee on the Parks Strategy.

The Head of Parks, Leisure, Youth and Events informed Members that the Council had made representations to the Government about the need to provide funding to the leisure sector during the pandemic.  He informed Members that a funding package had been provided to councils with in-house leisure services but councils which had outsourced their leisure services were not eligible for this; however, he reported that the Government had in the previous week announced a £100 million fund which local authorities could bid for and the Council would be submitting a bid to that fund.to try to secure the maximum amount possible to try to ameliorate the additional costs.  He advised the Committee that further funding announcements were expected.

The Strategic Director (Neighbourhoods) drew Members’ attention to section 4.3 of the Budget Options report which detailed the impact of COVID-19 on the Directorate’s income.  She advised the Committee that this had been taken into account in the in-year budget management, that mitigation was in place for £1.7 million and a number of further options were being looked at, including securing more money from the national Government.

In response to a Member’s question about Manchester Fayre, the Strategic Director (Neighbourhoods) advised that this had been discussed at the most recent meeting of the Resources and Governance Scrutiny Committee, whose remit it fell within, and that the Executive would be taking a decision about this at its December meeting.

Decisions

1.            To note that the Committee’s comments will be provided to the Executive in advance of its meeting on 11 November 2020.   

2.            To request that details of the proposed investment programme for parks be included in a future report to the Committee on the Parks Strategy.

3.            To ask that the next report on the budget proposals include information on the Council’s statutory obligations in relation to the areas where cuts are being proposed.

[Councillor Rawlins declared a personal interest as a Director of the Forum Trust.]