Agenda item

To receive a report from the Director of Finance providing an update on the overall financial position facing the Council and highlighting significant risks, issues and uncertainties.  The report also presents an early overview and assessment of the financial impact of COVID-19 on the medium term financial strategy and outlines future steps to ensure the Council continues to operate in a financially sustainable and resilient way.

AGREED to note the report and potential financial impact of Covid-19 on the Council’s Medium Term Financial Strategy.

Councillor McLennan, Deputy Leader of the Council, introduced the report from the Director of Finance setting out the overall financial position facing the Council and highlighting the significant risks, issues and uncertainties. The report also presented an early overview and assessment of the financial impact of COVID-19 on the medium term financial strategy and outlined future steps to ensure the Council continued to operate in a financially sustainable and resilient way.

In introducing the report, Councillor McLennan explained that the update had been designed to provide an outline of the past, present and future financial position of the Council and of the challenges now faced as a result of the impact of the pandemic.  Prior to the pandemic, the Council had been able to operate on the basis of a balanced budget, with a programme of savings agreed for 2021-22 and 2022-23.  This position had become much more challenging, however, as a result of the pandemic given the additional financial impact associated with responding to Covid-19 estimated to be in excess of £47.6 million, including associated loss of income in the form of fees and charges.  Whilst the Council, acting as requested by Central Government, had put in place measures to support residents it had only to date received £21.2 million in additional funding from central government towards these costs.  As further context, members were advised that the cost incurred by the Council in supplying PPE already stood at approx. £2 million.  Given the challenges highlighted and initial commitment made by Central Government, the Council would be continuing to lobby for additional funding to cover the full costs identified.  The challenges identified were also expected to be made worse once the furlough scheme ended, with Brent having over 50,000 residents on the scheme and unemployment expected to increase as the full economic impact of the pandemic became clear.  Whilst the position remain difficult, the report had been designed to outline the full extent of the financial challenges and risks faced in order to support the continued lobbying of Government for the additional funding required to address these.

The Mayor then opened the debate, inviting other members to speak on the report.

Councillor Nerva opened the debate by highlighting the difficult position the Council found itself in with such a significant funding gap to address.  The approach adopted by the Council was, however, fully supported as it was felt the prioritisation of finances over resident outcomes in responding to the pandemic would have resulted in a far worse position.  Councillor Nerva felt there was a need to ensure residents were made fully aware of the financial position the Council now found itself in and the reasons for this post Covid-19, which all councillors would have a role to assist in.  Concerns were also expressed about the proposal from Transport for London (as part of the package of measures in response to its funding deal with central Government) to cease free travel for children.  With schools being asked to return in September, it was felt this would place an additional financial strain on parents and it was suggested that the Council should continue to lobby the Mayor of London and Department for Transport on this issue.

Councillor Donnelly Jackson then spoke and also expressed concern about the number of residents who had been furloughed and who would face the real prospect of unemployment once the scheme ended.  Concern was also expressed about the housing market given the impact of the Governments current housing policies and the pandemic on the Council’s ability to meet its affordable housing development targets.  The Council was encouraged to look at how it could continue to support the provision of affordable housing in the borough and prevent a wave of evictions post-pandemic, especially in areas such as Willesden Green where over 50% of rented accommodation was in the private sector.

Councillor Johnson whilst recognising the concerns expressed regarding the financial challenges faced, felt it was important to commend the Council for the efforts made to provide PPE to care homes, as well as food for residents and to provide accommodation and food to the homeless during the pandemic.  This had been in line with the approach requested by the Government and as a result he felt it was entirely reasonable to expect them to cover the associated costs, with support expressed for the Council’s continued efforts to lobby for this additional funding.

Councillor Shahzad then spoke to thank all councillors and officers for their hard work during the pandemic, which he felt had brought out the best across all communities in Brent.

Councillor Azfal in recognising the bleak nature of the challenges and risks identified within the report, felt it was important to also highlight the impact which the Government’s programme of austerity had had on the residents of Brent in order to ensure the position post pandemic was not made any worse by the imposition of any further austerity measures.

Councillor Kansagra, speaking on behalf of the Conservative Group, expressed his surprise that no members had yet commended the impact of the initiatives introduced by the Chancellor in responding to the economic effects of the pandemic.  This had involved the provision of what he felt had been an unprecedented level of financial support for many individuals and businesses.  Given the challenges identified he felt there was also a need for the Council to consider how best to make use of it available reserves to support Brent’s post-pandemic recovery.

Councillor Ethapemi also spoke in support of the need for continued lobbying of Government in relation to their funding of the full costs incurred by local authorities in leading the local response on the pandemic.  He felt there was also a case to be made for the additional funding required to be ring fenced to avoid the Council needing to utilise a significant amount of any reserves.

Councillor Tatler then took the opportunity to assure members, in view of the concerns expressed, about the Council’s continued commitment towards the achievement of its affordable housing targets with 700 affordable homes delivered on site during this year, despite the impact of the pandemic.  Turning to Councillor Kansagra’s comments, she felt there was a need for the Chancellor’s approach to have been better targeted with flexible approaches to the furlough scheme.  She also shared the concerns raised regarding the impact any potential increase in levels of unemployment would have once the scheme ended.  Whilst the Council had made prudent decisions to ensure it managed its overall level of reserves, Councillor Tatler felt it was unacceptable that the Government had now appeared to reneged on their initial promise of financial support to local authorities, with the level of funding provided to date not sufficient to cover the challenges and costs carefully identified and on which continued lobbying was supported.

Councillor Kabir then spoke to highlight the need for the Council to ensure sufficient resources were identified, as part of the ongoing budgeting process, to fund the Brent Black Community Action Plan.  Whilst recognising this would need to be planned within the context of the funding gap and loss of income created by the pandemic, a fully funded programme would, she felt, be able to provide huge benefits for many communities within Brent that had been affected the hardest as a result of the pandemic.

Councillor Chohan and Councillor Dar then both spoke in praise of the Council’s leadership during the pandemic, with Councillor Dar also commenting on the effective speed of decision-making under the virtual meeting and emergency decision making arrangements.

Councillor Thakkar highlighted the potential likelihood of the demand for Adult Social Care services increasing post-pandemic and suggested the Council explore the possibility of bringing care homes in-house.

Councillor Kennelly then spoke to highlight his concern at the impact of the pandemic on the hospitality industry and delayed response from central government in supporting the sector.  He felt this contrasted significantly when compared to the speed of the wider response by the Council and also local communities to support those most in need.

Responding to previous comments regarding the Chancellor’s support packages during the pandemic, Councillor Kelcher felt it was important to recognise the impact of the Government’s austerity programme on public sector finances (particularly NHS and Public Health budgets) since 2010, which had clearly impacted on their ability to respond to the pandemic.  Moreover, he highlighted how World Health Organisation (WHO) advice had been ignored in relation to testing along with the Government’s failure to provide adequate PPE which he felt provided the real context in which to reflect on the Government’s efforts to date.  In terms of the Council’s approach to spending, he encouraged the continued adoption of a sensible and prudent approach, especially in relation to the suggested use of reserves and with lobbying needing to continue in relation to the level of Government funding being made available, given their initial commitments in relation to provision of the financial support.

As a final contribution, Councillor Mahmood felt it was important to recognise that without the dedication of council staff and community volunteers the costs incurred as a result of the pandemic could have been far greater.  He ended by urging the Leader of the Conservative Group to join the Administration in highlighting the efforts made by the Council, partners and local communities across the borough to support the most vulnerable and in lobbying to ensure that they honoured their initial commitment to fund whatever was necessary in order to support the response which had needed to be delivered.

As no other members indicated they wished to speak, Councillor McLennan, in exercising her right of reply, once again took the opportunity to thank all members for their contributions.  She hoped all members would support the Council in continuing to lobby for funding to be reimbursed by Central Government as a result of the costs incurred in responding to the pandemic not only within Brent, but across the country as a whole.  This would ensure local authorities (whatever their political persuasion) were able to continue focussing on the support for residents moving forward rather than on having to address the financial challenges identified in order to balance their books.

The Mayor then put the recommendations to the vote and they were declared CARRIED.

It was therefore unanimously RESOLVED to note the contents of the report and potential financial impact of COVID-19 on the Councils Medium Term Financial Strategy.