Issue details

The effects of the Covid-19 crisis will have a significant impact on the finances of the Council in the current and forthcoming years.

At the time of writing the Q1 forecast is not finalised, with the draft position showing that treasury management gains are mitigating a large proportion of the current estimated unfunded Covid pressures of £22.602m, leaving a forecast overspend of £3.737m.

Given available reserves and currently lower levels of demand for a number of services due to lockdown and social distancing measures, the authority will be able to manage in year pressures for 2020/21 without recourse to an emergency budget.

Estimated ongoing financial pressures suggest that without significant high level intervention, possibly from the proposed Comprehensive Spending Review in the autumn, action will need to be taken to reduce net expenditure to meet the potential funding gap for 2021/22 and beyond.

Revised forecast funding gaps of £44.555m, £54.325m and £71.703m for 2021/22-2023/24 represent a cumulative funding gap of £170.583m which is an increase of £105.092m from the cumulative funding gap of £65.491m last reported to Cabinet.  Based on this forecast there are sufficient reserves to support the revenue budgets for 2021/22 and 2022/23 which allows time for the necessary actions to be taken in a planned way to address the financial gap. 

To address the forecast pressure officers, working with our national professional organisations, will develop an evidence base and narrative to influence the forthcoming Comprehensive Spending Review. We will also look to maximise efficiencies across services and commence work to identify potential savings should a poor settlement arise.