To receive a presentation from the Director of Finance.
The Director of Finance gave a brief overview of the presentation that had been circulated with the agenda. The presentation contained an update on how the council performed against the 2020/21 budget and the Council’s reserve position.
The Committee were informed that the total impact of Covid on Trafford during 2020/21 was around £52M. This had been reduced through a combination of government grants and other tools, including the ability to cover some of the cost over three years. The net financial pressure of Covid 19 on the Council in 2020/21 was around £8M. Through the use of other funding made available for specific services, such as Public Health, the Council were able to achieve an overall underspend for 2020/21 of £2.8M.
The Director of Finance then moved onto the update on Trafford’s reserve position. Trafford had started 2020/21 with a reserve balance of £91M and that had increased to just over £200M by year end. The Director of Finance explained that there were plans in place to use large swathes of those reserve funds to tackle the continued challenges of Covid 19. One example of the use of reserves was to address the expected reduction in revenue due to the Council not receiving a dividend from Manchester Airport. The Committee were directed to slide eight of the presentation which showed the expected depletion of the reserves from £200.92M to £56.26M by 2024.
The Director of Finance concluded their overview by informing the Committee that the Public Accounts Committee had sat in May 2021 to look at the impact of Covid 19 on Council budgets and they had asked MHCLG to feed into local governments’ response. It was hoped that the outcome would be long term funding plans for local government which would in turn enable local authorities to plan further ahead.
Following the overview the Vice Chair asked about capital projects within schools and whether they were being paid by schools. The Director of Finance responded that works within schools were usually funded through capital grants. There were additional funding streams available to schools to complete works but schools should not need to use their own funds to pay for capital works required by the Council. The Director of Finance asked the Committee to provide him with any examples that they were aware of so that he could look into it further.
Councillor Procter asked whether any of the predicted impact of Brexit upon the Council’s budget had started to be seen. The Director of Finance responded that Brexit had been a key focus prior to the pandemic and the finance team were continually tracking the impact. The Director of Finance explained that Trafford had a large reliance upon business rates and there had been a steady decline in them over the past two years although there were a number of factors attributing to this with Brexit being just one. It was very difficult to understand the position at the moment as the ongoing impact of Covid made it difficult to identify what was leading to changes in those rates.
Councillor Carter asked whether there were any plans for generating additional income either by upscaling existing practices or from new sources. The Director of Finance responded that the Council was continuing with the asset investment strategy. The Council received returns on investments of £7M which were used in the 2020/21 budget and part of the budget for 2021/22 would also be addressed through similar returns. The Council were looking to maintain the level of returns from investments going forward.
1) That the update be noted.
2) That Committee Members are to contact the Director of Finance if they are aware of schools using their own funds for capital works required by the Council.