Agenda item - Covid19 - Financial response and implications for the Council

Report of the Acting Chief Financial Officer.

(1)      That the use and allocation of the Hardship Fund and Emergency Response Fund as set out in paragraphs 4.2 to 4.4 and 4.10 of the report be approved;

(2)      That the progress regarding the application of Business Rate reliefs and distribution of government Business Rate grants be noted;

(3)      That it be agreed to pause new General Fund Capital Programme schemes as defined in paragraph 5.14 of the report until a further report is brought to the Policy & Resources Committee in July;

(4)      That the expenditure incurred to date using Officer Urgency Powers set out in Section 5 of the report be noted;

(5)      That the progress and approach to meeting the requirements of the Cabinet Officer Procurement Policy Note as set out in Section 5 of the report be noted;

(6)      That it be noted that the Executive Director of Economy, Environment & Culture, in consultation with the Chief Finance Officer and Executive Director of Housing, Neighbourhoods and Communities, will take all steps necessary to develop a process for identifying and supporting commercial tenants in council-owned properties who present in financial difficulty and bring a report to Members where necessary or use Officer urgency powers where more appropriate;

(7)      That the work being undertaken to understand the risks and issues and potential support required for the city’s events and arts sector be noted;

(8)      That the proposed payment of Casual Staff and the extension of full pay sickness absence cover as set out in paragraphs 5.26 and 5.28 of the report be agreed;

(9)      That it be agreed that any exceptional costs arising from the crisis that have been incurred using appropriate governance routes, including officer urgency powers, that are over and above available government emergency response funding will be a call on the council’s working balance and, if this is insufficient, other earmarked reserves; and

(10)   That it be noted that in accordance with the powers delegated to officers by Policy & Resources Committee on 19^th March, the above will be given effect to by the relevant Officers.

4.1         The Acting Chief Finance Officer introduced the report which set out the key financial issues arising from the national funding initiatives alongside the direct financial impact of the pandemic on the council’s resources and financial position.  He noted that it was a fast-moving environment and whilst every effort was made to keep Members as up to date as possible, new announcements were being made on a daily basis and the full implications could take time to interpret and act on.  He also noted that spending decisions were having to made on a daily basis.

4.2         The Acting Chief Finance Officer recognised that residents and local businesses were being directly affected by the situation and where possible the council was taking action to support them.  However, it also meant that there was a likelihood of the council’s own financial position falling into financial deficit and therefore, further direct support would be required from the Government.  He also noted that there was a need to ensure that wherever possible duplication of support from the government and the council to local businesses and organisations was avoided and as such there would be a need for businesses and organisations to adopt an open book approach when working with the council.

4.3         The Sub-Committee welcomed the report and raised questions in relation to:

(i)        How access to the Hardship Fund would be communicated taking into account those who were digitally excluded;

(ii)       Which capital schemes were likely to be affected and put on hold and what that meant for projects such as Valley Gardens, the Corn Exchange and Madeira Terraces for example;

(iii)      Whether a report could be brought to Policy & Resources in July rather than leaving new capital projects on hold until further notice;

(iv)     How the purchase of PPE (Personal Protective Equipment) would be monitored and then distributed;

(v)      The cost of providing additional care home beds and transfer of patients;

(vi)     The impact of any loss of rental income for the HRA;

(vii)    The potential to provide additional loan funding to the East Sussex Credit Union;

(viii)   Whether the council had received the Adult Social Care funding announced by the Government;

(ix)     The position of Freedom Leisure;

(x)      How will relevant voluntary and community organisations be identified and supported;

(xi)     How will vulnerable people e.g. those suffering domestic violence which had seen an increase because of the social restrictions be supported;

(xii)    Why were agency workers being used by City Clean rather than taking on staff;

(xiii)   Were casual staff able to do other work for the council where needed; and

(xiv)   Will there be an opportunity to utilise volunteers to support council services?

4.4         The Chair noted that a number of the issues raised did not relate directly to the report and suggested that written answers should be provided and that these could be made available as supporting information to the minutes. However, where officers could provide information to the points raised it would be helpful for them to respond.

4.5         The Acting Chief Finance Officer stated that he would ensure officers looked at how those in need who were digitally excluded could be contacted to offer support.  In regard to capital schemes, he noted that where savings would be generated, i.e. schemes were self-funding, such as the Street Lighting Programme these schemes should continue. However, projects such as the Sustainable & Climate Reduction Investment Fund (SCRIF) which was reliant on increased parking revenues would need to be paused, as would part of he Madeira Terraces scheme where part of the scheme was based on funding being generated from the purchase of and rental of commercial properties. With regard to Madeira Terraces in particular, the economic position was likely to change as a result of the crisis and a further report would need to be brought to committee in due course. It was proposed to bring a report to the Policy & Resources Committee in July to update Members on the situation and seek guidance on various projects/programmes affected by the pause.

4.6         The Acting Chief Finance Officer stated that where council tenants went into difficulty with rents, it was likely that they would then receive Housing Benefits or Universal Credit which would cover the loss of rent and thereby not directly affect the HRA income. However, the question of bad debt was one factor that may increase and could have some impact.  He also noted that the Economy & Events Cell was looking at how the East Sussex Credit Union could be supported and used to help people and advised that casual staff who could not work in their normal workplace have been invited to work in other areas as part of the deployment process.

4.7         The Executive Director for Economy, Environment & Culture stated that a procurement process would be followed in regard to the purchase of PPE and associated items. In relation to City Clean, he stated that the service was experiencing a shortage of staff across areas and the use of agency staff enabled these gaps to be covered quickly with experienced workers. It was usual practice to use agency staff in the service and worked well. However, other staff who cannot perform their current role were also being invited to work in City Clean.

4.8         The Chief Executive stated that a number of officer groups, known as Cells, had been established to deal with specific matters and subjects and these would have responsibility for managing projects such the purchase of PPE and transfer of patients that were being discharged.  He also noted that the council was working with a range of community organisations to identify vulnerable people and to put mechanisms of support in place for them.

4.9         The Chief Executive confirmed that managers had been asked to identify where staff could be asked to work in other areas to support services and anyone wishing to volunteer could contact their local councillor or look at the council’s website.

4.10      The Acting Chief Finance Officer confirmed that the council had received £8m funding on the 27^th March from the Emergency Response Fund, primarily to support Health and Adult Social Care, but also other areas such as homelessness.  He stated that Freedom Leisure was in a similar position to other businesses and would be likely to lose substantial income. However, any support provided by the council should not duplicate any direct government support that was provided to the company.

4.11      The Chair stated that she had been involved in open discussions with the Secretary of State and repeated assurances had been given that the government would provide support to local authorities.  She also noted that it had been suggested to amend recommendation 2.3 so that a report came to committee in July and proposed that it be accepted.

4.12      The amendment was agreed unanimously, and the Chair then put the recommendations as amended to the vote which were approved unanimously.

4.13      RESOLVED:

(1)      That the use and allocation of the Hardship Fund and Emergency Response Fund as set out in paragraphs 4.2 to 4.4 and 4.10 of the report be approved;

(2)      That the progress regarding the application of Business Rate reliefs and distribution of government Business Rate grants be noted;

(3)      That it be agreed to pause new General Fund Capital Programme schemes as defined in paragraph 5.14 of the report until a further report is brought to the Policy & Resources Committee in July;

(4)      That the expenditure incurred to date using Officer Urgency Powers set out in Section 5 of the report be noted;

(5)      That the progress and approach to meeting the requirements of the Cabinet Officer Procurement Policy Note as set out in Section 5 of the report be noted;

(6)      That it be noted that the Executive Director of Economy, Environment & Culture, in consultation with the Chief Finance Officer and Executive Director of Housing, Neighbourhoods and Communities, will take all steps necessary to develop a process for identifying and supporting commercial tenants in council-owned properties who present in financial difficulty and bring a report to Members where necessary or use Officer urgency powers where more appropriate;

(7)      That the work being undertaken to understand the risks and issues and potential support required for the city’s events and arts sector be noted;

(8)      That the proposed payment of Casual Staff and the extension of full pay sickness absence cover as set out in paragraphs 5.26 and 5.28 of the report be agreed;

(9)      That it be agreed that any exceptional costs arising from the crisis that have been incurred using appropriate governance routes, including officer urgency powers, that are over and above available government emergency response funding will be a call on the council’s working balance and, if this is insufficient, other earmarked reserves; and

(10)   That it be noted that in accordance with the powers delegated to officers by Policy & Resources Committee on 19^th March, the above will be given effect to by the relevant Officers.