Agenda item

The Leader presented the report that outlined to Cabinet the key issues and risks to the Council’s

finances resulting from Covid-19, the estimated additional costs and funding for the

Council’s response to the crisis and progress in administering financial support given to local

businesses and taxpayers during the Covid-19 lockdown period. 

 

The Leader confirmed that Local Authority Leaders, Welsh Local Government Association, Welsh

Government Ministers have been meeting regularly and commended the Minister for Local Government

and Housing for the work she has done in partnership with local authorities.

 

The Leader reported the three key financial issues resulting from the Covid-19 situation:

 

·         What has the Council done to support businesses and vulnerable households/individuals?

 

·         What is all this forecast to cost and how is it being funded?

 

·         What does this mean for the financial outlook this year – what impact will it have on the Council’s finances?

 

The Leader confirmed the situation is very dynamic, with the response to the crisis at an all-Wales level and locally, changing daily.  In that respect, the impact on the Council’s finances is subject to change and the report highlights the current areas of potential risk and the costs the Council is incurring (mainly up to June).  The situation remains fluid and is dependent on further responses to the situation.

 

Welsh Government have responded to the crisis with over £2.4 billion of initiatives and local government has been at the frontline in delivering the various support schemes that are in place; the Leader applauded their support.

 

The Leader confirmed the report detailed where the funding has been spent with most going to support businesses through the ‘Economic Resilience Fund’ and providing rates relief for eligible businesses.   In addition, health service capacity is being supported, and local government is being funded to provide specific support for free school meal pupils, the homeless and care providers.

 

The Leader reported that locally the Council is providing financial support to businesses and vulnerable households/individuals, and highlighted the following:

 

·         actioned rate relief of a considerable amount of money to those eligible businesses meaning they will not need to pay business rates for this year;

 

·         paid out over £28m of non-repayable grants to approximately 2,300 businesses to provide short term financial support whilst closed over the period.  The Council has been complemented on the speed in which they addressed this, in fact the Council borrowed money in order to get this cash out to them as fast as possible and by doing so, paid about £16m by the end of the first week of April;

 

·         the Council has also worked with many households and deferred payments of Council Tax to those suffering some financial loss or uncertainty over this initial period.

The Leader further confirmed the Council is forecasting spend of approximately £6m in specific initiatives to support:

 

·         those children eligible for free school meals whilst schools are shut – to the end of August.

 

·         increasing its stock of short-term accommodation provision to support the homeless in this period.

 

·         supporting care providers with additional financial support to cover their increased costs.

 

The leader highlighted the statistics and facts behind some of these figures:

 

·         Over 60,000 food vouchers distributed to eligible families;

 

·         75 rough sleepers offered temporary accommodation and specific support;

 

·         232 families offered emergency and temporary housing;

 

·         Over £900k financial support given to care homes to help them meet the increased costs of supporting the City’s older and vulnerable population.

The Leader confirmed that whilst much of this is being funded by Welsh Government, the Council is facing significant financial uncertainty itself through this period and the Leader highlighted some of the key issues in the report:

 

·         costs will continue to be incurred beyond June whereas funding commitment from Welsh Government is only available until June (this is the current understanding);

 

·         a significant reduction in the Council’s income from fees and charges; some support has been announced to help with this but going forward that support will not completely cover all the Council’s losses;

 

·         losses on collection of Council Tax; the revenues team have taken a sympathetic approach and will continue to do so but council tax does need to be collected and the Leader asked for Newport’s council tax payers to be understanding of this;

 

·         the increased cost of the Council Tax Reduction Scheme.  The Leader urged all those families who are struggling to pay Council Tax to look into and apply for this benefit. 

 

The Leader was pleased to report that the Council continues to work well with Welsh Government and continues to seek further funding wherever possible.  However, the situation is changing regularly and therefore there is much uncertainty in the Council’s finances for this financial year. The Leader confirmed the Council does have a contingency available to help with this if required. 

 

The Leader emphasised the need for all service areas to manage their core budgets as well as possible and to avoid overspending.  The usual budget monitoring processes continue; these are challenging due to the crisis and Cabinet will be receiving a report on the revenue outturn.

 

The Leader was pleased to report that to date, the Council’s response has been comprehensive and robust, with essential services being more or less maintained and additional support given to those most vulnerable.  All this has been made possible because of the herculean efforts made by Council staff.  The Leader gave sincere thanks for this as the efforts have made a very positive impact on people’s lives in this most challenging of times.

 

The Leader invited Cabinet Member comments:

 

Cabinet Members agreed that going forward more services may need to be cut in order to provide a balanced budget and they urged the UK Government to discontinue its austerity agenda.  Praise was given to staff and the excellent way in which the Council’s finances are prudently managed.  There is a need to reflect on the costs to alterations in the services provide and new costs that may arise due to Covid-19. 

 

The Leader thanked her colleagues for their comments and reiterated that prior to Covid-19 local authorities were feeling the impact of the Government’s austerity agenda.  The Leader again praised the Welsh Government for the work they have done with local authorities in providing as much financial assistance as possible; she also commended Newport East’s MP Jessica Morden for raising this in the House of Commons and also Baroness Wilcox of Newport who has also raised the plight of local government in the House of Lords.

 

The Leader invited the Head of Finance to comment.  Mr Rushworth encouraged businesses to apply for the business grants offered by Welsh Government – there are six days left before these grants end; he confirmed that mailshots have been sent out to businesses to remind them to apply and he encouraged businesses to apply for the grants before the deadline date of 30 June.  He went on to say that there is some uncertainty going forward with regard to about half a dozen key financial issues and these are currently being discussed with Welsh Government.  The situation remains changeable but he expects the first financial budget forecast will be available in the next two weeks.  He asked all Heads of Service to look after their core budgets as robust financial management will help the Council get through this difficult period.

 

The Acting Chief Executive confirmed that work is starting next week on the MTFP for 2021/22 onwards which will be very different to what was proposed previously. 

 

The Leader thanked everyone for their comments and proposed that Cabinet:

 

-       note and comment, as necessary, on the financial support administered and delivered to local businesses, organisations and households

 

-       note the Council’s costs in the delivery of specific Covid-19 service support in the first quarter of the year, and in particular that funding support for these costs is currently planned to cease at the end of June, with exception of free school meal provision which will continue until the end of August.

 

-       note and comment, as necessary, on the key areas of financial risks and challenges the Council will face this year as a result of the current situation and the uncertainty that surrounds much of this given the very dynamic nature of the situation.

 

-       note, agree and instruct the importance that all services operate within their core budget for ‘non Covid-19 response activities’ in this coming year as best they can, given the additional challenges created by Covid-19.

 

Decision:

 

Cabinet voted and unanimously agreed the report.