At the CDC Council meeting on Wednesday 23 September, Council voted to approve the revised budget for 2020-21.
Council was informed that revenue streams have reduced significantly as a result of the pandemic, including car parking revenues which were forecast to be £1,680,000 lower than budgeted and the reduction of planning services resulting in a forecast loss of £450,000. The detailed report also outlined a number of other revenue reductions including land charges services (£49,000 lower) and public protection services (£72,000 lower).
Revenue losses have largely been off-set by government support from a one-off grant of £1,062,180. There is a further government commitment to underwrite 75% of all lost revenue, so Cotswold District Council should be able to access a total of approximately £2,595,180 in government aid. The chief financial officer of the council concluded that CDC can manage the financial impact of COVID-19 in 2020/21, so long as promised Government funding for income losses is in line with their assumptions.
Members agreed that the current financial situation of the council was healthy and robust as CDC has substantial reserves to fall back on, thanks to the previous Conservative administration. However, concern was raised about the future financial outlook because the updated budget gave a number of areas where the council costs were rising significantly as a result of the pandemic.
For example, the council has now ring-fenced an additional £578,000 to support SLM (the private company who manages the district’s leisure centres) and the cost of running the waste and recycling service is forecast to be £455,000 higher than expected.
Concern was expressed by the Conservative group that the council were on the verge of a perfect storm - falling revenues, rising costs and a potential second wave of COVID-19. For that reason, the Conservative group put forward a proposal to stall council spending on non-essential items until February 2021 when the full impact of the second wave of COVID-19 wave could be assessed. This proposal was rejected by the Lib Dem administration.
Cllr Richard Morgan, leader of the opposition Conservative group said
“The Lib Dems inherited a council which was debt-free, consistently under budget year on year and had over £33 million of reserves. However we are burning through those reserves at an alarming rate, our spending is going up, our revenues are going down and we are standing on the precipice of a second wave of COVID-19 and nobody knows what financial impact that will have”.
“We suggested putting a temporary halt on all non-essential spending until February 2021 when we can review how serious the impacts from a second COVID-19 wave might be, but this was rejected by the Lib Dem administration. To be clear, we were not suggesting cutting services such as the leisure centres or garden waste collections, we would classify those as essential services to our residents. We were talking about the significant amount of non-essential spending which is currently happening.”
“For example, the £333,000 the Lib Dems have spent changing the management structure of CDC, the £75,000 they are spending to lobby for two unitary authorities in Gloucestershire, the money they want to spend to put the CDC logo on our street signs or the £20,000 the council leader is spending to make PR videos of himself and his cabinet or the £350,000 they are spending on consultants to advise them how they can borrow money for commercial investments.”
The proposal to halt non-essential spending was rejected by the Lib Dem administration, who stated that their revised budget was prudent and their spending was in line with the wishes of the majority of Cotswold residents who elected them in 2019.
The Lib Dem administration also stated CDC was in a very strong financial position and it could weather any second wave of COVID-19 with ongoing government support and the use of the council’s reserves. The Lib Dem administration also claimed to adopt the Conservative’s emergency proposal would ‘send the wrong message’ to residents, staff and partners of the Council.