Agenda item

Report of the Portfolio Holder for Finance, Growth and the City Centre

This item does not contain any decisions that are subject to the call in.

The Board considered the report of the Portfolio Holder for Finance, Growth and the City Centre on detailing the Council’s current financial position assessing the impact of government austerity alongside the impact of the COVID-19 pandemic. The following points were highlighted:

(a)  The full financial impact of COVID-19 on the city is unlikely to become clear for some time. As a result of addition spend to ensure that vulnerable citizens have been looked after throughout the crisis the Council has spent an additional £85.5million and received a government grant for £19million;

(b)  An In Year budget process is underway to find further savings to help to mitigate this extra spend;

(c)  Core Cities are lobbying the government asking for the financial support that was initially pledged, to fund the cost of the COVID-19 outbreak for Local Councils;

(d)   As a way of generating income to combat the budget cuts from central government, the Council has made investments in property and in companies. Companies such as Nottingham City Transport, which is a successful and multi-award winning company. However even the most successful companies owned by the Council will be unable to pay their usual dividends to the Council this financial year and possible next due to the impact of COVID-19 on the economy;

(e)  Each capital project prior to the outbreak of COVID-19 had a business case for the investment. A piece of work has already begun to look at Post COVID business cases as the impact has been so wide reaching. This piece of work has only recently been started and details will come back to the Board when appropriate;

(f)  The Council is in the early stages of reacting to INTU going into administration. It will look at various options to allow regeneration of the site to continue.

(g)  The impact of the COVID-19 outbreak on homelessness will become more pronounced as time goes on. Section 21 evictions have not stopped even through lockdown and around 100 households a week present to the Council as homeless.

(h)  Despite having projects in the pipeline because of the delay starting them because of the COVID-19 outbreak, the Council may be forced to return right to buy funds to the Government because they cannot be spent within the strict time scales. This will further compound the expected housing pressures going forward;

(i)  The first Local Outbreak Board has met and is working on plans to help prevent and manage future outbreaks.

The board acknowledged the hard work and sacrifices made Nottingham City Council staff and by residents of Nottingham City throughout the lockdown period helping to prevent the further spread of the virus.

Resolved to:

(1)  note the overall in-year financial position of the Council as set out in this paper; 

(2)  note the significant impact that the Covid-19 pandemic has had on the income and expenditure of the Council;

(3)  note the substantial lobbying that is underway to secure further financial support from government to stabilise the financial position of the Council;

(4)  note the financial gap for this financial year and approve the activities underway to address the position in the form of the extension of spending controls, the identification of in-year savings and the review of reserves;

(5)  note that if additional savings and the review of reserves are believed to be insufficient to ensure a balanced budget position in the professional judgement of the s151 Officer, then a Section 114 Report will be issued;

(6)  note that the s151 Officer will keep the financial position under continuous review;

(7)  note that a review of the capital programme is underway;

(8)  note that progress on the implementation of a minimum level of £15.5m of savings will be presented to the Board for approval in July; and

(9)  note that an updated Medium Term Financial Strategy will be presented to Executive Board in September.

Reasons for decision

The City Council, like many other councils across the country are facing significant financial pressures as a result of Governments cuts. This has been compounded by the impact of COVID-19. Given the scale of the financial challenge it is necessary for the Council to refresh the Medium Term Financial Outlook as well as plan to deal with immediate in year issues. 

Other options considered

This report is for information only and no other options were considered.