THE town council’s financial forecast has started to improve following the reopening of more facilities in Lyme Regis, but the town clerk has still warned there will be “difficult decisions” ahead.
Last month, town clerk John Wright reported that the council’s reserves were expected to drop by more than £900,000 over the next year, due to the effects of the coronavirus pandemic.
In April, as lockdown measures first took hold, the council’s reserves stood at £969,794 but by June this had dropped to £581,674. The reserves were expected to continue decreasing rapidly to just £67,000 by the end of the financial year in March 2021 – a shock to many who considered Lyme to be a “rich council”, once with reserves of £1.3million.
However, during last night’s virtual meeting Mr Wright said that the financial position was now “starting to strengthen”, with reserves now expected to stand at just under £200,000 at the end of the financial year.
He explained that the financial outlook had improved as the town had begun to reopen, with car parks now taking 65% of their historic income for this time of year, compared to 45% when they first opened in May.
The council’s amenities, such as the mini golf, had also now reopened but estimated income for these remained at 50% compared to previous years.
Last month the council agreed to a 20% discount on Monmouth Beach chalet and caravan tenant fees to compensate for the site being closed during the height of the pandemic. A condition of this discount was that all outstanding debts from tenants had to be paid by March 2021, meaning the forecast income has now raised from £187,000 to £204,000.
Mr Wright said that there was also a possibility that the the council may be eligible for funding from the Local Authority Income Loss Scheme, which could cover its lost car parking revenue, but further clarity was needed on this.
The council’s finance officer Mark Russell added that some income from car parking would be delayed due to the number of people now paying via phone rather than in cash.
Payments from chalet and caravan tenants may also be delayed as the council had had to re-invoice them, taking into account the government’s recent reduction in VAT.
Mr Russell said that the council’s amenities had made a little under target this month, but they were opened later than expected due to a delay in the delivery of Perspex screens.
He added that the council’s finances may be further boosted by the government’s Job Retention Scheme, which would see the authority receive a bonus of £1,000 for every furloughed member of staff that keeps their job until the end of the year.
‘It won’t be pleasant, but we can do it’
Despite the more positive outlook, Councillor Richard Doney said they should still be prepared in case “things go pear shaped”.
He suggested that the council identify a “trigger point”, i.e. a figure in the reserves that would prompt the council to take urgent action, such as seeking a loan.
He also suggested that members identify a target reserve figure to build up to, adding that £200,000 was not enough. He said this would have to be done by increasing income, reducing expenditure and cutting running costs, and requested that officers prepare a report on how costs could be cut by 20% and the knock-on effects this would have.
The Mayor of Lyme Regis, Councillor Brian Larcombe, agreed with Councillor Doney’s points, adding that the council staffing and supply costs put together were more than £1million a year, which he said was “significant” for a council of this size.
The town clerk agreed that “difficult decisions” would still have to be made.
He commented: “I won’t pretend that this will be easy and councillors will have to think long and hard about things they would not normally want to do to build reserves up quickly.
“It won’t be pleasant but we can do it; we have options.”
The mayor agreed that the council still had to be prudent to build up reserves and prepare for the possibility of a second wave.
“If there is a second wave the government will not be able to help as much as it has done this year, they will not be so generous and we will be on our own,” he added.
“But Lyme Regis has more options that many other councils. This will be out main work for the autumn, building up our resilience.”
It was agreed that, after seeking further clarity on the council’s eligibility for the Local Authority Income Loss Scheme, a further discussion on the council’s finances would be held when a target reserves figure would be set and decisions made on how to reach it.