The Medway Messenger has recently published a headline indicating a £60m black hole and the heightened risk of a s.114 being triggered in light of poor Council reserves.
We are maybe weeks away from this Conservative-led council going effectively bankrupt.
Will he in retrospect confirm that the Council Reserve position, which he has allowed to deteriorate since 2010, is now a clear and present danger to Council sustainability coming out of the COVID crisis; and to that end will he publish all letters sent to the MHCLG so that Council staff and the public can have confidence that Conservatives are actually challenging this government robustly on increasing financial support?
Minutes:
“The Medway Messenger has recently published a headline indicating a £60m black hole and the heightened risk of a s.114 being triggered in light of poor council reserves.
We are maybe weeks away from this Conservative-led council going effectively Bankrupt.
Will he in retrospect confirm that the Council Reserve position, which he has allowed to deteriorate since 2010, is now a clear and present danger to Council sustainability coming out of the COVID crisis; and to that end will he publish all letters sent to the MHCLG so that Council staff and the public can have confidence that Conservatives are actually challenging this government robustly on increasing financial support?”
Councillor Jarrett thanked Councillor Osborne for his question. He stated that at the beginning of the national response to the emerging Covid-19 pandemic in the UK, on 16 March the Communities Secretary Robert Jenrick assured Local Government Leaders that: “This Government stands with local councils at this difficult time. Everyone needs to play their part to help the most vulnerable in society and support their local economy. The Government will do whatever is necessary to support these efforts.”
Councillor Jarrett stated that the Council began a monumental effort to support Medway’s residents and businesses through the pandemic while maintaining the delivery of Council services as far as possible. Since 2010 local authorities had seen significant and consistent falls in central government funding for core services while changes in legislation and challenging economic conditions had seen increased demand for Council services. To balance its budgets the Council had consistently delivered savings through transformational programmes, protecting vital front line services and leisure and cultural offers, and was extremely proud to have done so with very little call on its reserves. The Council had recognised the need to build up its reserves, with a reserves strategy forming part of each year’s Medium Term Financial Strategy, and since 2018 the Council had contributed more than £2million each year to its general reserves, which currently stood at more than £22.4million, to ensure the Council was as financially resilient as possible under the circumstances.
Councillor Jarrett stated that the Council had provided its estimates of the financial impact on the Council of Covid-19 to the Ministry of Housing, Communities and Local Government in response to their monthly data collection requests. On the results of this information gathering exercise, the Government had determined each tranche of the emergency funding it had provided to local authorities, including the most recent announcements made on 2 July. The Communities Secretary had reaffirmed his original commitment to support Councils in their efforts to respond to, and recover from the impacts of Covid-19, stating: “This Government will continue to stand shoulder to shoulder with councils and communities as we recover from this pandemic as we renew our commitment to unite and level up the country”.
Councillor Jarrett concluded by stating that the Council would continue to provide its latest estimates to MHCLG to ensure the full extent of the financial impact of Covid-19 on the Council was known.