Agenda item

This report outlines the current financial position of the Council and the known pressures reported to Executive on the 1^st October, along with an overview of the outlook for future years.

The Committee considered the update report provided and officers outlined the Council’s financial position. It was noted that the Government had announced a Spending Review in the Autumn of 2020 which could have an impact on the Council’s finances, however, details of the spending review had not yet been released.

Discussion took place regarding financial support for residents in York and the potential impact of the end of furlough and the introduction of a new government scheme. Members also noted the positive of the Council maintaining the York Financial Assistance budget while up take had not been as high as expected. It was highlighted that the Council didn’t use the furlough scheme and would be unlikely to use a new scheme as it had the majority of staff working in their business as usual roles.

The Council’s finances were discussed and it was noted that the Council had a healthy amount in its reserves, however, the Council had been hit by the pandemic. It was noted that income from areas such as car parking was down and that income from council tax and business rates would likely see a decrease in the next financial year if forecasts for a rise in unemployment and a decrease in business’ that pay business rates were correct. Members considered this in the context of the Council’s expected deficit and discussed how the Council tackle its expected deficit including if the reserve could be used. It was noted that any use of the reserves would require a planned approach to replenishment.

Members raised questions as to whether the Council and residents were expecting budget cuts, officers noted that this would depend on a number of factors including the government spending review. However, the Council would likely need to reduce its expenditure. Discussion took place regarding areas of overspends including in both Children and Adults Social Care which had overspends prior to COVID-19. It was confirmed that work continued to be undertaken to reduce costs in these areas, however, results from these changes in Social Care would take time and during COVID-19 there had been an increase in the cost of securing care and support for those with complex needs.

It was noted that the Council had taken the decision to implement a freeze on non-essential recruitment and would review how temporary and agency staff were being used. The Council would also look at how each directorate worked in order to find efficiency savings where possible. Officers noted that towards the end of each financial year it is always expected that some areas will produce an underspend and that this would be expected to reduce the Council’s expected end of year deficit. Members highlighted cuts to the Council budget from Government throughout the last decade and acknowledged that the financial challenges the Council were facing were a national issue faced by many Councils. Members discussed and it was noted that the Council had lobbed Government regarding the need to properly support Council’s financially throughout the pandemic and would continue to do so.

Resolved: 

                      i.         That the Finance Update be noted.

Reason      To ensure that the Committee remains updated on the Council’s financial position.

The meeting was adjourned from 18:32 and reconvened at 18:39. Councillors Kilbane and Mason gave their apologies and left the meeting at this point.