To receive a report from the Executive Member for Finance and Investment.
The Executive Member for Finance and Investment introduced the budget outrun report that had been circulated to the committee prior to the meeting. The Committee were informed that the projected shortfall for the year was £17.7M which comprised of £23.2M COVID 19 related costs and £5.5M underspend on the delivery of the Council’s Corporate Services. There was an explanation on pages 16 and 17 within the report of the impact of COVID 19 on the budget. Since that report was written a third tranche of funding had been announced which consisted of £1.8M from central government. It had also been announced that the Council were able to spread the Council Tax and Business rates collection fund deficit over the next three years and support was being provided around lost fees and charges. The exact detail around this support had not been provided but the Council estimated that the Council would receive around an additional £4M. Together with an increase in Council tax collection the Council were looking at an in year gap between £1M and £6.4M. The Executive Member for Finance and Investment stressed that these figures were estimates and could all change during the course of the rest of the year. While the in year deficit had reduced since the last update the Executive Member for Finance and Investment drew the Committee’s attention to the forecasted deficit in 2021/22, which was estimated at around £35M. The Executive were looking at possible plans to address that gap and a report was to go to the Executive in October. The Corporate Director of Finance and Systems added that the figures that had been presented would undoubtedly be wrong due to the early time in the year and the unpredictable nature of the COVID 19 pandemic.
The Chair requested that an update be provided for the Committee which laid out what may happen and what actions the Council were taking so that both Committee Members and the public understand the position. The Executive Member for Finance and Investment agreed with the Chair and assured the Committee that both the Committee and the public would continue to receive updates on the work of the Council going forward. The report going to the Executive meeting in October would lay out the Council’s plans in greater detail.
Councillor Coggins asked for clarification around a number of points raised within the update including the spreading of the deficit across years, what the £4M reduction in the deficit related to, and whether the worst case scenario regarding Manchester Airport had been updated. The Executive Member for Finance responded that around £2M of the current year’s deficit was being spread to next year and that the main increase in the 2021/22 deficit was due to expected recurring COVID 19 pressures. The £4M was an estimate of the support that Trafford would receive from the Government in relation to the loss of income. The Corporate Director of Finance and Systems added that some of the recurrent costs were around the increased social care costs which the Council were predicting as well as the spreading of the deficit over the next three years. The Corporate Director of Finance and Systems stated that the Council welcomed the ability to spread the deficit and would welcome further ability to spread other parts of the deficit to deal with the substantial in year budget gap. The Council had split costs related to COVID 19 into recurrent and none recurrent and it was hoped that the Pandemic would not continue into further years, but this was something that could not be predicted. The Executive Member for Finance informed the Committee that an IFS report had recommended that local authorities be allowed the use of short term borrowing facilities which would be welcomed by the Council. The Corporate Director of Finance and Systems informed the Committee that Manchester Airport were meeting regularly with stakeholders and were monitoring their income closely. It was currently predicted that the airport would get back to usual levels within two years but this was very difficult to predict.
The Chair thanked the Executive Member for Finance and Investment and the Corporate Director of Finance and Systems for attending the meeting and answering the Committee’s questions.
1) That the report be noted.
2) That an another report on the Council’s position and action’s being taken at the Committee’s next meeting.