This Council has relatively low levels of reserves for a unitary authority of our size - with the combination of increased pressures due to the CoVid19 crisis and dramatically reduced income streams, what measures will the Council consider to deal with these challenges?
Minutes:
“This Council has relatively low levels of reserves for a unitary authority of our size - with the combination of increased pressures due to the CoVid19 crisis and dramatically reduced income streams, what measures will the Council consider to deal with these challenges?”
Councillor Jarrett thanked Councillor Maple for his question. He stated that, with regard to low level of reserves, there were quite a number of other local authorities with a similar level of reserves, some of which were larger than Medway, which of course did not make it any better.
Councillor Jarrett stated that Medway’s Medium Term Financial Strategy which the Cabinet had approved in September 2019 not only sought to balance expenditure with resources, but also to protect and rebuild general reserve balances to provide cover against continued austerity, significant unforeseen events and to demonstrate that the Council was financially resilient. At the end of the 2018/19 financial year the Council was able to increase general reserves by around £4million and in line with that strategy, through a review of the Minimum Revenue Provision, the Council had planned a further increase at the end of 2019/20 and through the budgets for 2020/21 on into the medium term.
Councillor Jarrett stated that, in responding to the Covid 19 pandemic the Council had moved heaven and earth to act quickly, working closely with a whole range of partners from the public and private sector and of course the voluntary sector. Inevitably the Council was spending significant sums in that response and its income was down, with some significant income streams ceasing entirely.
He also stated that the Council’s Revenues and Benefits teams were working hard to apply the government announced support for businesses in both grants and discounts, and the hardship fund for Council Tax payers with these schemes being fully funded by the government. Medway Council had also received £6.628million of direct funding from the government, and on Saturday 18 April the government had announced that the national sum of £1.6billion would be doubled. The Council was yet to see what its share of that sum would be, though it was hoped that it would be similar to the last allocation of £6.6million. Through all available channels, the Local Government Association, Key Cities through working with the South East 7, the Council continued to lobby the government to underwrite local authorities for all spend and lost income in responding to this pandemic.
Councillor Jarrett stated that some of this response dealt in part with the points Councillor Khan made in her question and comments made earlier in the meeting under Leader’s report.
He stated that Finance officers were integral to the Council’s response, with arrangements in place for the financial impacts to be considered and captured for all action taken. The Council was building a picture of what the pandemic meant for the Council’s finances but it was still in the response phase and with government funding announcements continuing, it was too early to make decisions about how the Council would deal with the longer term impacts.
Councillor Jarrett concluded by stating that he was already thinking about what moving to the recovery phase might look like, and there would be opportunities to take advantage of new ways of working which might enable the Council to make savings and ensure the continued financial sustainability of the Council.