Oxford City Council’s financial update and strategic response to coronavirus.
The upcoming Council Cabinet meeting on 24 June 2020 will further discuss the financial impact of the COVID-19 pandemic on the region, and will review all capital spending projects to prioritise those items which can be moved forward within the available budget.
In addition, as the Council moves away from the emergency response phase and into their restart, recovery and renew phase, an examination of the challenges and opportunities of action already undertaken will be made.
Financial Shortfall
In information released from the Council today, the Council outlines a significant reduction in income streams, whilst also having an increased expenditure. The Council estimates the total financial shortfall due to COVID to be at £24 million, of which £9.4 million is in the current year.
“The funding gap comprises increased costs of £1.5 million arising from response to COVID. However, the bulk of the deficit is as a result of a shortfall of income mainly from commercial property rents, car parks, Town Hall and community centre bookings, leisure centres, and reduced income from its wholly-owned companies Oxford Direct Services Ltd (ODS) and Oxford City Housing Ltd (OCHL), both of which have seen major lines of work halted.”
Mitigating Actions
As the Council is unsure whether further funding will be made available to them by the Government, the Cabinet will discuss measures to mitigate the above-mentioned financial impacts.
Sadly, programs designed to tackle climate changed will be revised, although the Council confirms they will continue with the £100mil capital investment programme on low carbon measures.
“It is proposed that those projects that are not financially driven, or are required for health and safety reasons, or are externally funded will remain paused until the Council-wide financial position is clearer, at which point a decision on whether or not to proceed in each case can be taken against competing demands for Council resources. These projects include the replacement of Bullingdon Community Centre, the redevelopment of East Oxford Community Centre both of which have had strong backing from Members and which the Council would want to deliver if it is financially possible to do so.”
Despite the actions taken by the Council, it is expected that there will remain a deficit of between £9-£10million for the current financial year.
Key points of review for short and long term focus
At the upcoming meeting, the Cabinet will be considering seven key factors for long and short term focus:
- Supporting the local economy and jobs, and helping to secure long term investment to support sustainable and inclusive growth.
- Measures to support the reopening of the city and local centres to enable social distancing, with longer term improvements to public realm and transport to support increased cycling and walking.
- Tackling increasing hardship and homelessness anticipated as a result of the economic impacts; and supporting vulnerable people from COVID and over the longer term.
- Delivering services differently through embedding new ways of working particularly across our locality areas, while undertaking fundamental reviews of leisure, cultural and community services. Planning for potential further COVID outbreaks.
- Cost management and resetting business plans for the Council’s wholly-owned companies, ODS and OCHL, together with a full review of all planned capital expenditure and other initiatives to prioritise what can be taken forward within the available budget. Updated corporate business plan and budget is planned for the autumn
- Continue to support remote and flexible working by staff, and review how we work and where people will be based longer term
- Continue to work with our partners in public health, health and social care to promote and protect health and wellbeing of the population.
Councillor Ed Turner, the Deputy Leader and Cabinet Member for Finance and Asset management has said:
“Our financial situation is extremely challenging, and it is disappointing in the extreme that central government is so far off helping local authorities in the way it initially said it would: around £1.6 million of extra help is welcome, but is a drop in the ocean compared to £24 million of projected losses.”
The Councillor believes that Oxford’s situation is made more acute because they have, in the past, worked to generate income through wholly-owned companies, such as Oxford Direct Services, rather than cutting services. Sadly some of those sources of income are badly affected by Covid.
“We are committed to bringing things back on an even keel, working with our outstanding workforce, represented by its trade unions. We should be able to meet some of the one-off costs because we have a prudent level of reserves, but there are likely to be some difficult decisions in the coming months in order to give us a balanced budget in future years. Many of the impacts of this pandemic will, sadly, be felt for years to come.”
Photo by Sidharth Bhatia on Unsplash
Contact Gi Oxford
Email us: news@gi-media.co.uk
Follows us on Facebook for all the latest local stories, breaking news and to join the conversation