Agenda item

To receive an update on the significant financial impact of Coronavirus and to earmark monies to support the financial needs of the Council in the current year and future years.

1.       That the current financial impact estimate be NOTED and the financial challenge faced by the Council as a result of COVID-19 be acknowledged.

2.       That the setting aside of the Business Rates Collection Fund Surplus, to support the financial needs of the Council arising from COVID-19, be APPROVED.

3.       That the principle of revising base estimates for the second half of the current year be APPROVED. 

6.1            The report of the Head of Finance and Asset Management, circulated at Pages No. 16-24, updated Members on the significant financial impact of Coronavirus and asked the Committee to earmark monies to support the financial needs of the Council in the current year and in future years. Members were asked to note the current financial impact estimate and acknowledge the financial challenge faced by the Council as a result of COVID-19; to approve the setting aside of the business rates collection fund surplus to support the financial needs of the Council arising from COVID-19; and to approve the principle of revising base estimates for the second half of the current year.

6.2            The Head of Finance and Asset Management explained that, from early April the Finance team had been monitoring the potential impacts of COVID-19 and the estimates in the report from mid-May were in line with the forecast made to the Ministry of Housing, Communities and Local Government. Appendix A to the report set out the detailed forecast and highlighted a central estimated cost of just under £2.8 million. The report also set out the low and high positions which were 50% and 150% of the central case. The £2.8million had been offset by the support already provided by the government which left £1.8million to be financed by the Council. £3.5million was set to be released from the business rates provision which provided some funding to help cover the cost of COVID-19 in the current year and going forward. This meant the Council was in a good position to meet the deficits faced and unlikely to need to issue a Section 114 Notice this year; however, it would need a pragmatic approach to its spending plans given the financial uncertainties faced in all funding streams. The Council would need to pay a levy before it could get the benefit of the release of provisions and there was likely to be a need to reduce some year-end reserves because of that.

6.3            In response to a query regarding the recovery period, the Head of Finance and Asset Management advised that the figures had been based on a three-month lockdown and then a varying recovery period – the higher level of impact allowed for a second spike in the pandemic. He felt it was unlikely there would be another funding round in the near future as the government was taking stock of financial returns from all authorities and would probably wait until the end of the summer to assess the actual impact of COVID-19. This week he had spoken to colleagues in the south west and they were putting their case to the government as a region, rather than individually, which it was hoped would mean the government would better understand the financial challenges and look to compensate in future years as well as in the current year.

6.4            In response to a Member’s query in relation to the Council’s business rates provision, the Head of Finance and Asset Management confirmed that it was not shown in the reports to the government so it should not cause the Council to be penalised when receiving funding. In addition, any funding made available was likely to be based on a general formula on the government’s priority areas such as homelessness and social care; there were other areas, such as commercial activity, which it was less likely to want to support.

6.5            The Chief Executive reiterated that the Council was pushing for government funding on all fronts including lobbying the Local Government Association and the District Councils Network. The District Councils Network was particularly important as it was managing to get Ministers to attend every teleconference and they had all been advised by local authorities of the acute need for funding; for example, he understood the government wanted to give capital funding for local authorities to provide housing for rough sleepers but the point had been made that Councils needed ongoing funding to be able to service those homes.

6.6            A Member expressed the view that receipt of the business rates provision was good news for the Council, but that recovery would be slow and difficult. He advised that there had been a suggestion to reinstate parking charges across the Borough Council’s car parks at the end of June but most local Members did not think that was a good idea as the high street would be facing enough challenges without the addition of parking charges. In response, the Chief Executive advised that this had been discussed informally with Members and it had been made clear that Tewkesbury Borough Council had been one of the few local authorities which had stopped charging for car parking during the lockdown period. Officers were aware of the concerns from retailers, and the need to stimulate the economy, but this had to be weighed against the Council’s income needs. The proposal was to use delegated powers, having canvassed the Town Councils and Local and Lead Members and taken account of their views, to decide how to approach the reinstatement of parking charges. The Head of Finance and Asset Management had also written to all Borough Members inviting their views.

6.7            Another Member noted that one of the issues faced was that the social distancing measures put into place on Tewkesbury High Street had blocked on-street parking so people could not just pop into shops. She questioned whether the Council could allow two hours free parking to help retailers in the towns. In response, the Head of Finance and Asset Management advised that this was one of the options being considered. Another Member expressed the view that there would never be a good time to reinstate charges, but traders could always reimburse customers for parking should they wish to. Another Member agreed that this was a difficult judgement to balance with many competing issues, but he felt Officers had worked hard to gain a good understanding of potential issues and in canvassing the opinions of Ward Members. He indicated that the on-street parking in the high street had been removed to facilitate social distancing for the opening of high streets on 15 June and the primary objective was to get town centres back into operation and allow people to earn and spend money as they wished. He expressed the view that the Council had a responsibility to collect parking charges as well as being mindful of businesses and how that might affect them. A Member was concerned that residents had been using car parks for permanent parking whilst the charges had been removed and, if the charges were not reinstated, there was a chance that people coming to the high streets to shop would not be able to park which would also be detrimental to retailers.

6.8            Upon being proposed and seconded, it was