The report of the Director of Finance (Document “BT”) provides Members with an overview of the forecast financial position of the Council for 2020-21.

It examines the latest spend against revenue and capital budgets and forecasts the financial position at the year end. It states the Council’s current balances and reserves and forecasts school balances for the year. 

Recommended -

That the Executive

(1)       Note the contents of Document “BT” and the actions taken to manage the forecast overspend.

(2)       Approve the new initiatives required to respond to Covid-19 as outlined in paragraphs 4.13 to 4.32.  Funding for the schemes of up to £5.978m to derive from Council reserves unless additional Government support or partner support is received, with a further £1m to derive from Public Health grant.

(3)       Approve the following capital expenditure schemes.

·      £0.9m for the purchase of two Children’s Residential Homes. They will be funded by a mixture of corporate borrowing and capital receipts.

·      £3m for IT Core Infrastructure projects of connectivity and network infrastructure, server investment and mobile enhancements. The scheme to be funded by using £3m of the previously agreed £3.7m budget in February 2020 from the previously approved Reserve schemes for IT Capital Projects.

·      £5.5m for the development of an Advance Fuel Centre and the replacement of vehicles with compressed gas variants. To be funded by fuel cost savings and additional income from sales. 

·      Create a £2m reserve as a contingency against future overspends within the Capital Investment Plan.

Note the following have been approved under Section 1.7 of the Financial Regulations:

·         £0.05m additional funding to replace the pool filters as part of the works to refurbish Bowling Pool. To be funded from the general contingency budget.

·         £0.6m for the extension of the burial ground at Scholemoor Cemetery.  

(4)       Approve the continuation of the contract with Impower as outlined in paragraph 12.15 and Appendix 3, to support the delivery of transformation, using the £1m investment which was approved as part of the 2020-21 Council budget. The objective being to continue to;

·         Improve outcomes in the services where significant changes to service delivery are being undertaken

·         Provide a Return on Investment on the work undertaken and a sustained improvement in performance and value for money

·         Increase the skills within the Council so that more capacity exists to re-modelling services in the future.

·                    It is recommended that the Executive approve the continuation of the contract with Impower to support the delivery of key transformation programmes within a reset Council Transformation Plan.

·         Executive is asked to delegate authority to the Strategic Director of Corporate Resources to enter into a contractual arrangement with Impower.

·         Strategic Director Corporate Resources presents a revised Council Transformation Programme to a future Executive meeting.

(Corporate Overview & Scrutiny Committee)

(Andrew Cross – 01274 436823)

The report of the Director of Finance (Document “BT”) provided Members with an overview of the forecast financial position of the Council for 2020-21.

It examined the latest spend against revenue and capital budgets and forecast the financial position at the year end. It stated the Council’s current balances and reserves and forecast school balances for the year.

The Leader noted that the report reflected the changed environment brought about by the Covid-19 pandemic.  She expressed concern that the Government message to spend to support businesses and residents in the current circumstances had not been backed up with the funding required by the Council in providing this support.  She added that the report had been prepared before the latest funding announcement by Government.

The Director of Finance noted that the Council was forecast to overspend by £5.4m due to non Covid-19 related reasons by 31 March 2021 and by up to £35m including the additional net costs of Covid-19.  He added that due to the impacts of Covid-19 on businesses and individuals further priority investments of £6m were recommended which would increase the overspend.  He added that significant deficits were expected on Council Tax and Business Rates collection which would have to be repaid in the 2021-22 financial year.  He added that the 2020-21 unbudgeted effect on the Council could be in the range of £25m- £66m depending on the length of time in which Covid-19 impacts.  He added that the financial position was severe but that it was in line with other local authorities and that the financial reserves of the Council were relatively robust compared to other authorities.  He added that the Government had announced the previous week the following additional support for Councils, none of which had been factored into the report:

An emergency grant of £500m of which Bradford expected to receive £5m

Support for non tax income losses with the Council covering up to 5% of all sales fees and charges losses, with the government funding 75p in the £ above this level .  Specific detail was awaited on how this would operate.

Indication that Council Tax and business rates collection fund deficits could be spread over 3 years rather than 1 year, specifc detail was awaited on how this would operate.

The Leader commented that in February 2020 the Council was in a reasonable financial position despite 10 years of austerity but that due to Covid-19 the budget was now under extreme pressure and it had been necessary to dip into reserves.  She added that the expected £5m additional funding announced by the Government was far short of the £25m - £66m unbudgeted effect of Covid-19 on the Council.  She added that if the country went into a recession there would be a need for the Council to support residents and businesses so the Council was proposing to invest as it had a wider responsibility to the whole of the district, not just the Council.

The Education, Employment and Skills Portfolio Holder stated that as Bradford was the youngest city with 100,000 children in school it was important the Council ensured that children had access to meals during the summer.  He added that the Council had topped up the Government investment in laptops to ensure that children were ready to go back to school in September and that investment had also been made in summer schools and 1:1 tutorials in September to provide support for English and maths.  He stressed that employment was a key to coming out of poverty and noted the significant investment in Skills House to provide wrap around supports for 6 months after starting a new job.

The Regeneration, Planning and Transport Portfolio Holder commented that the Council was investing in a robust delivery plan to assist the district out of recession as soon as possible and lay the foundations for maximum growth.  He referred to the projects in  the pipeline such as One City Park, Bradford Live and the Darley Street Market and the benefits from West Yorkshire devolution and also the Keighley and Shipley Towns Scheme funds.

The Healthy People and Places Portfolio Holder noted that capacity had to be increased to work with victims of domestic violence, perpetrators and their families.  She referred to the increased need for welfare advice and access to benefits.  She also noted the impact that Covid-19 had on individual’s mental health and the need to invest in services that provided support.  She referred to the great job done by domiciliary services but noted that there were now a number of voids in care homes and recognised the need to support this essential service.  She stressed the importance of the Government bringing  forward the much delayed green paper on funding Adult Social Care.  She went on to add that the poorest areas tended to be disproportionately affected by climate change and stressed the need to deliver investment in climate change activities.

The Leader thanked care home workers for their huge effort and personal sacrifices in supporting residents during Covid-19.  She noted that investment was being made in additional wardens in communities to reinforce pubic health messages.

An opposition member attended the meeting and asked for clarification regarding capital and revenue funding for IT equipment.  The Director of Finance responded that it was proposed to spend £3m of the £3.7m identified in the Capital Programme for IT upgrades to upgrade infrastructure and facilitate remote working. 

Resolved -

(1)       That the contents of Document “BT” and the actions taken to manage the forecast overspend be noted.

(2)       That the new initiatives required to respond to Covid-19 as outlined in paragraphs 4.13 to 4.32 of Document “BT” be approved.  Funding for the schemes of up to £5.978m to derive from Council reserves unless additional Government support or partner support is received, with a further £1m to derive from Public Health grant.

(3)       That the following capital expenditure schemes be approved.

·      £0.9m for the purchase of two Children’s Residential Homes. They will be funded by a mixture of corporate borrowing and capital receipts.

·      £3m for IT Core Infrastructure projects of connectivity and network infrastructure, server investment and mobile enhancements. The scheme to be funded by using £3m of the previously agreed £3.7m budget in February 2020 from the previously approved Reserve schemes for IT Capital Projects.

·      £5.5m for the development of an Advance Fuel Centre and the replacement of vehicles with compressed gas variants. To be funded by fuel cost savings and additional income from sales. 

·      Create a £2m reserve as a contingency against future overspends within the Capital Investment Plan.

That it be noted the following have been approved under Section 1.7 of the Financial Regulations:

·         £0.05m additional funding to replace the pool filters as part of the works to refurbish Bowling Pool. To be funded from the general contingency budget.

·         £0.6m for the extension of the burial ground at Scholemoor Cemetery.  

(4)       That the continuation of the contract with Impower be approved as outlined in paragraph 12.15 and Appendix 3 to Document “BT”, to support the delivery of transformation, using the £1m investment which was approved as part of the 2020-21 Council budget. The objective being to continue to;

·         Improve outcomes in the services where significant changes to service delivery are being undertaken

·         Provide a Return on Investment on the work undertaken and a sustained improvement in performance and value for money

·         Increase the skills within the Council so that more capacity exists to re-modelling services in the future.

·        That the continuation of the contract with Impower be approved to support the delivery of key transformation programmes within a reset Council Transformation Plan.

·         That authority be delegated to the Strategic Director of Corporate Resources to enter into a contractual arrangement with Impower.

·         That the Strategic Director Corporate Resources presents a revised Council Transformation Programme to a future Executive meeting.

(Corporate Overview & Scrutiny Committee)