The Cabinet gave consideration to a report of the Director of Finance which sought approval of the deployment of the additional grants received in the financial years 2019/20 and 2020/21 and sought approval of the allocation of additional Council resources to supplement the unringfenced Government Funding already announced to meet costs associated with the COVID-19 pandemic.
The report also sought approval for the Director of Finance to create appropriate reserves to support the Council’s response to the COVID-19 pandemic.
Members were advised that due to the COVID-19 outbreak, further unprecedented pressure was being placed on services provided by both the Council and the NHS. The Government, in response to the COVID 19 pandemic had allocated a number of significant grants in 2019/20 and 2020/21 to provide support. This was in addition to a number of grants allocated towards the end of 2019/20 that due to their late notification could not be included in the month 9 financial monitoring report approved at Cabinet on 23 March 2020. The report presented all the additional funding received by the Council during March and April 2020 which had not previously been reported.
It was reported that Section 2.2 of the report set out a range of ringfenced and unringfenced grants received in late 2019/20 solely for use in 2019/20. These grants would therefore be included within the final outturn for 2019/20 and their allocation and use would be reported within the Council’s 2019/20 Statement of Accounts.
On 27 March 2020 the Council received an unringfenced grant payment of £7,641,407, its share of a £1.6bn unringfenced grant allocation for Local Government. The Government indicated that this was to mainly meet the additional costs of Adult Social Care resulting from COVID-19, but also other pressures such as loss of income. On 18 April 2020, a second tranche of £1.6bn funding for Local Government was announced. The Councils’ share had yet to be notified.
On 27 March 2020, the Council received £11.233m of grants in lieu of business rates. This was received to support cash flow at the end of 2019/20 and would be carried forward into 2020/21 as a receipt in advance and would be used to support the 2020/21 budget as initially intended.
A grant allocation specifically to finance the Government’s business grants initiative was received on 1 April 2020 in the sum of £54.738m. The Government had urged all Councils to pay the grants as quickly as possible and in response payments have begun. The grant payment system was being administered having due regard to Government guidance and a balanced approach had been adopted, managing the requirement to issue grants at speed but also to ensure appropriate administrative disciplines are followed to minimise potential instances of error, fraud and infringements of State Aid protocols.
A £3.015m Hardship Fund grant was received on 3 April 2020. This was to provide support in paying Council Tax for those primarily of working age in receipt of Council Tax Reduction. A separate report had been prepared to outline the proposed use of the grant. This would be treated as an unringfenced grant in 2020/21.
The final grant notified was an increase in notional Public Health grant funding in 2020/21 of £0.606m. This would increase the 2020/21 net revenue budget, but the additional resources would be ringfenced to the Public Health Service.
The Financial Monitoring reports presented to Cabinet during 2020/21 would provide information about the impact of COVID-19 on the financial position of the Council and the use of the grants detailed in this report.
The report also advised that a high-level review had been undertaken of the Balance Sheet and Reserves which indicated an amount of £2.359m could be set aside to supplement the costs associated with the COVID-19 pandemic. When this was added to the £7.641m of unringfenced Government resources, this would enable the Council as a priority, the flexibility to deploy a total of £10m to meet urgent and unforeseen costs and financial pressures that are impacting on the Council and the Oldham economy as a result of the pandemic. As the grant was received in 2019/20, it was considered prudent financial management to transfer the balance remaining at the end of 2019/20 and the Council resources, to an Earmarked Reserve for use in 2020/21.
It was further reported the review of the Balance Sheet was ongoing and may identify the potential to further supplement this emergency resource and any future Government funding if required.
Members noted the content of the report and the additional resources and thanked Council staff for their continued work in assisting businesses and residents.
Members also noted the loss of income due to the COVID-19 pandemic and increased expenditure in adult social care and other services within the Council.
Option 1 - Cabinet approves the adjustments to the budget of the Council to reflect the additional grant funding received at the end of 2019/20 and in early 2020/21 and agrees to the allocation of supplementary resources to fund pressures arising from COVID-19 as proposed in this report. This would give the Council the capacity to spend £10m in total in addition to the funding received for business grants and hardship funding.
Option 2 - Cabinet does not approve the adjustments to the budget of the Council to reflect the additional grant funding received at the end of 2019/20 and in early 2020/21 and does not approve the allocation of supplementary resources by the Council thus reducing the funding it has to support pressures arising from COVID-19.
RESOLVED – That: