A report detailing Bath & North East Somerset Council's finances, it's strategy to recover from the financial impacts of Covid-19 and the resources available to meet its key aims and ambitions is to go before cabinet on Thursday 8 October.

The Medium-Term Financial Strategy (MTFS) provides a framework for the council to maintain a sustainable financial position and balance its budget over the next two years in the light of the pandemic.

The report outlines the factors expected to drive future costs, sets out funding projections and how the council plans to address the funding gap while focusing its limited resources towards essential services. It says the council should continue to focus on delivering its Corporate Strategy, including its key roles to improve people's lives and tackle climate change which are central to helping support recovery and renewal amid the challenges of COVID-19.

Councillor Dine Romero, Leader of the council, said: "The scale of the financial challenge we face as a result of the pandemic is unparalleled. We've responded with robust recovery measures to stabilise our finances, but the long-term impact of Covid-19 combined with an ongoing review of the national approach to funding local government means we face huge uncertainty. This important report will help to guide the council's short, medium and long-term financial planning to ensure we deliver our priorities within affordable and sustainable financial constraints."

The council's quarter one budget monitoring has forecast a deficit of £10.7m this year after recovery measures, this is largely due to the loss of income from Heritage Services, parking and commercial rents, as well as other income generating services. Work is underway to mitigate this position and the Government income reimbursement scheme will act as a temporary measure to help with the 2020/21 projected deficit. A revised in year projection will be reported to cabinet in November.

Looking ahead though, it is clear Covid-19 will have a long-term impact on the council's finances. The report estimates the council will need to find £35.93m in savings (including pre-approved savings) over the next five years. As a direct result of loss of income due to the pandemic, 81% of those savings will need to be found in the next two years with £20.76m in savings to be found next year.

Councillor Richard Samuel, cabinet member for Resources said: "This is a huge amount of money to save and represents 17.6% of the current net budget of £118.25m. Both our Chief Executive and our Director of Finance (S151 Officer) have warned that this level of recurrent revenue savings will not be achievable in full, given the current strain on finances and new Covid-related demands the council is managing.

"It is clear we need further financial support from the Government, and we'll be lobbying hard for additional funding to be awarded in our Provisional Settlement in December. However, we must assume that the additional grant funding we received this year in response to Covid was a one-off and that means we must develop a robust plan of action to manage change and balance our budget."

In order to address the financial challenge, the report says the council should reduce its reliance on commercial income while maximising new sustainable income opportunities. Capital spending should focus on the delivery of priority schemes which are affordable, new priorities should only be adopted if the council can create financial headroom and over the next two years specific areas should be prioritised, including:

- ongoing investment to deliver more effective transport schemes, with a particular focus on creating low traffic neighbourhoods, prioritising walking and cycling and introducing financial incentives to reduce inward commuting through the extension of RPZs.

- continued investment to support the most vulnerable in our communities.

- continued commitment to secure action to address the climate and ecological emergency.

- continued support to help the local economy recover from the impact of the pandemic, working with partners to rebalance the economy to reduce the dependence on retail, hospitality and tourism.

support for the "Preparing for the Future" programme to modernise the council with a focus on improved asset management and flexible working.

The strategy says the council must take action to achieve savings with minimal disruption to services and residents. Among the changes it recommends are reducing expenditure and diversifying the council's income base, using technology for smarter working, revising the council's operating structure and implementing a new strategy for social care delivery.

The report also explores options for spreading the savings required to more manageable levels over the course of the five-year period. However, it advises caution that this could result in an increase in the total amount of savings the council needs to achieve if temporary funding is used as longer-term measure.

If approved by cabinet, the strategy will go to public engagement later this autumn.

You can view the report HERE: the B&NES site