Cabinet has considered a report outlining the financial implications on the Council as a consequence of Coronavirus, as Local Authorities in Wales work with Welsh Government to find solutions to the financial challenges brought by the pandemic.
The Officer report was considered by Cabinet on Thursday, June 25 – in the second formal meeting of Members since the national emergency started, again held virtually via video conferencing. The report provides an initial assessment of the financial implications on the Council.
The Council’s Budget for 2020/21 and Capital Programme up to 2022/23 were agreed by Full Council in March 2020. Shortly afterwards, the Coronavirus emergency escalated and the lockdown arrangements started – bringing disruption across Council services with many repurposed, reduced or fully suspended. Significant work to assess the financial impact of this continues.
Councillor Andrew Morgan, Leader of Rhondda Cynon Taf Council, said: “The Coronavirus emergency has brought disruption and challenges for Council services over the last three months as social distancing measures have been implemented – as is the case with organisations and businesses right across the country, which inevitably come with a financial cost. Forecasting the financial implications is clearly very difficult at this stage, as it is dependent on numerous factors that are subject to change.
“It is important that the Council continues to review and refresh our financial modelling in conjunction with Welsh Government’s continual review of the lockdown restrictions and arrangements in Wales. It is hoped that over the next few months the picture will become much clearer on the way forward.
“Therefore, in a report to Cabinet on Thursday, Officers proposed that a Mid-Year Budget Review is held. This highlights the unprecedented nature of this time and has been put forward because circumstances looking forward are different to what anyone could have predicted back in March. The review, now agreed by Cabinet, will also look forward to the medium term and the implications for next year’s Budget, to be set by March 2021.
“The initial estimated impact for the three month period since the Coronavirus emergency was a £13.6m cost, averaging around £4.5m for each month.
“Positive discussions continue with Welsh Government in relation to financial support for all 22 Councils in Wales. Vital funding streams from which each Council will benefit have been agreed – for example the COVID-19 Hardship Fund, Funding for Adult Social Care, Free School Meal Funding and Lost Income.
“The wider financial implication for Councils will ultimately be determined by a number of currently-uncertain variables, as the ongoing situation continues to change. The Officer report to Cabinet on Thursday confirmed that the financial position of the Council will continue to be modelled and monitored, but it is clear that the 2020/21 Budget set in March does not reflect our current position.
“By undertaking a Mid-Year Budget Review in September 2020, there will likely be greater clarity in relation to the financial implications of Coronavirus. This review will support the decision-making process to revise our 2020/21 budget and will also inform our Medium Term Financial Planning, which has underpinned the strong financial foundations of the Council over recent years and through previous challenges.
“I have already made public the clear position that I do not believe the Council Tax-payers of Rhondda Cynon Taf should foot the bill of this pandemic, and instead it is vital that the UK Government provides the necessary financial support to the devolved nations and seeks to stimulate our economy as we move forward over the coming months.”
The report to Cabinet highlighted emerging financial pressures including continued support for social care, provision of food parcels to the vulnerable, PPE requirements and staff cover – as well as increases in the number of Children Looked After, Council Tax Reduction Scheme claimants and waste management costs due to increased volumes of kerbside waste and recycling.
There are also future considerations about increased Home to School Transport requirements, funding for the national Test Trace Protect strategy, and the potential for longer-term income losses if services cannot ‘return to normal’ for some time (for example, Leisure).
Posted on Thursday 25th June 2020