03:03PM, Tuesday 19 May 2020
Finances at Slough Borough Council will need to be closely monitored to ensure the local authority’s cash reserves do not fall below the recommended minimum, a council officer warned last night.
The financial impact of the ongoing public health crisis has left the council facing a potential funding shortfall of £2.9million for 2020/21.
The council is estimating COVID-19 will cost it £15.3million, outstripping the £7.6million of grant funding from central Government and a further £4.8million in planned spending reductions.
This shortfall can be covered by the council’s financial reserves but the council’s service lead for finance, Barry Stratfull, told a virtual cabinet meeting last night money will need to be reinvested into the council’s rainy day fund.
He said: “The figures we have are provisional and we’re forecasting on less than two months of activity and there’s considerable uncertainty about what the financial impact is going to be.”
The council had been planning to have cash reserves of £16.1million at the end of the 2020/21 financial year.
But the reserves could fall below the recommended minimum of £9.3million if COVID-19 costs continue to spiral.
The local authority is also owed £4million from a start-up loan given to the Slough Children’s Services Trust in 2014.
Mr Stratfull added: “We do need to look at putting money back into the reserves as soon as we can.”
Council leader James Swindlehurst (Lab, Cippenham Green) said: “Clearly we’re in a more robust financial position than some of our neighbours and our strategy of trying to put more money back in reserves has at least created the headroom space to deal with the £2million to £3million of pressures created by this.”
Opposition councillor Wayne Strutton (Con, Haymill and Lynch Hill) asked the council’s cabinet what the financial implications of COVID-19 disruption are likely to be on regeneration projects in the town centre.
He also questioned whether the council’s financial projections for its two new hotels in the town centre could be impacted by less international business travellers due to the pandemic.
Cllr Swindlehurst said work on The Moxy hotel and Residence Inn, located on the former Old Library site, had already been running ahead of schedule so was unlikely to see its completion date delayed.
He added: “Like all hotels it’s not one source of traffic in terms of customers and Cycas (leaseholders) still clearly believe they can run a hotel business on the site.”
The council leader added ‘intensive talks’ have continued with British Land over the proposed Queensmere Observatory redevelopment and Slough Urban Renewal over the Thames Valley University site regeneration to ensure the projects do not become ‘casualties of COVID-19’.
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