Nicola Butterworth, Director of Neighbourhoods introduced her report that provided the Committee with a summary of the process for budget setting as a transition year for 2021/22 and described the financial position for 2021/22 as at Quarter 1 (deficit of £45m) and the actions being put in place to mitigate the gap.

The report informed that the actions included a phased approach of 5 stages and included a timeline for the 2021/22 budget setting process of when budget proposals were to be presented to the Policy and Services Committees for the recommendation to Full Council in the setting of the 2021/22 budget.

Members noted that as this was a transition year, proposals had been identified and were to be presented to the Committee by Officers due to the tight timescale to approve the budget.  However, the Committee was encouraged to identify its own proposals for Officers to work up, and if within the timescale, to be included for the 2021/22 Budget. 

The Director of Neighbourhoods apprised the Tourism, Culture and Leisure Committee of 3 key considerations, namely:

The deficit breakdown.

·   17m of unachievable original savings from the 2020/21 budget as a result of delays in progression caused by Covid.  These are:

o  £5.0m new Council model and structure

o  £4.55m Contract reviews and renegotiations

o  £3.75m Adult Social Care reviews and efficiencies

o  £1.27m Children’s Looked After Children reductions

o  £2.5m New investments and refinancing

o  £0.64m Zero Based Budgeting pilot

·  £6m residual income losses after an assumption for compensation from the government scheme for sales, fees and charges losses

·  £2m of unachievable capital receipt sales as a result of delays in progression caused by Covid

·  -£3m of forecast savings as a result of vacancies

Mitigation.

To mitigate this, the Council had requested permission from MHCLG to apply to HM Treasury on the Council’s behalf for a capitalisation directive.  This meant that the Council could charge any unmet 2020/21 and potentially 2021/22 deficits specifically incurred as a result of Covid to the capital programme; and

Options Programme.

Since June, the Strategic Leadership team had been identifying options to mitigate the overall deficit and were working through a programme of immediate actions that could be actioned immediately, and longer term actions to ensure the budget was sustainable for the future. The ‘twin track’ approach ensured that any immediate quick wins would not be implemented at the detriment of any longer terms proposals that would generate future income or result in future cost avoidance.

Following presentation of her report, Members questioned the Director of Neighbourhoods on a number of matters as highlighted in her report. The Director responded accordingly.

RESOLVED - That the Council’s current financial position and process for the 2021/22 budget in this transition year be noted.