Horsham District Council : Agenda item - Update on the Council's financial position

To receive a report from the Leader and Cabinet Member for Finance & Assets.

RESOLVED

That:

i) the changes in the Council’s financial position in 2020/21 and the Medium Term be noted;

ii) A reduced 2020/21 capital programme be recommended for approval by Council;

iii) Delegated authority to the Director of Community Services in consultation with the Leader of the Council, the Deputy Leader and Cabinet Member for Leisure & Culture and the Cabinet Member for Local Economy and Parking to agree any waiving of the monthly management fee from Places Leisure for the required period of financial support until usage recovers towards pre-Covid-19 levels, or ending 31 March 2021;

iv) Delegated authority to the Director of Community Services in consultation with the Leader of the Council, the Deputy Leader and Cabinet Member for Leisure & Culture and the Cabinet Member for Local Economy and Parking to agree any financial support payments to Places Leisure for the period of closure and for re-opening until usage recovers towards pre-Covid-19 levels, or ending 31 March 2021 be recommended for approval by Council; and;

v) Delegated authority to the Director of Community Services in consultation with the Leader of the Council, the Deputy Leader and Cabinet Member for Leisure & Culture and the Cabinet Member for Local Economy and Parking to enter into any contract variations in respect of any financial support during the period of closure and for re-opening on the terms recommended Delegated authority be recommended for approval by Council.

Reasons for Recommendations

The Council needs to acknowledge the severe financial realities it is experiencing and their medium-term implications to prepare for the future

To prioritise capital projects that produce a financial return to the Council and postpone non-essential capital works to preserve reserves in 2020/21 allowing more scope for considering options for rebuilding the Council and our District next year.

The Leader reported that he 2020/21 Budget had been approved in February 2020 and near balanced budgets were projected through to 2023/24 on the assumption that business transformation continued and the Council generated further income to mitigate against the cost pressures that continue to rise.

The global pandemic of the COVID-19 virus on 11 March 2020 and the subsequent lockdown and associated recession was having a severe impact on residents, businesses and the Council. The immediate effect of reducing levels of income and increasing expenditure at the Council would result in a significant overspend in 2020/21, and much lower levels of income were anticipated in the future. The Council would have to fundamentally review, change or even close its services to ensure it had a balanced budget in the years to come.

The report set out the projected scale of the impact in 2020/21 and how the medium term financial planning scenarios and assumptions had drastically changed. Without action, this would result in a likely budget gap of up to £3m in 2021/22 and significant budget gaps through to 2023/24. The report was written in the context of unprecedented levels of uncertainty. The length and depth of the current recession was unknown and it was essential the Council kept as much of its reserves as it could this year to give it time to make considered decisions about its future service.

As the situation becomes clearer there would be further updates, detailing the latest information on the scale of the deficit, setting out a more developed response and containing plans to tackle the budget gaps, working towards setting a balanced 2021/22 budget in February 2021.