Covid-19: £10 million hole in council budget

Thurrock Council Offices

By Local Democracy Reporter

THE coronavirus pandemic is expected to cost Thurrock Council almost £10 million by the end of July, a new report has revealed.

The report published on Tuesday reveals the total cost of responding to Covid-19 will be around £9.7million by the end of July but with no end to the pandemic in sight, the costs could rise even further.

The biggest drain on council funds has been from services linked to adult social care, including the council’s work to ensure emergency care facilities have sufficient capacity hospital leavers and the increased demand for PPE.

Council officers have also estimated they will lose £2.3million of income they would usually get from fees and charges, such as parking.

Sean Clark, the council’s chief finance officer, said: “The budget report issued in February 2020 set a balanced budget based on the assumptions in place at the time.

“The Covid-19 pandemic has created a significant shock to the economy and resulted in significant unplanned expenditure and income losses.

“The full impact of this is not yet known but the ability of the council to deliver a balanced budget in 2020/21 remains uncertain.

“The most significant uncertainty is on the impact of the pandemic on council tax and business rates income going forwards. This combined with the additional costs and local income losses will be significant.”

Of the £9.7million, the council has received £9.4million in grants from the government to offset the losses.

But it is unclear what the situation will be beyond the end of July, particularly after the secretary of state for local government, Robert Jenrick, told a press briefing in May that what councils had been given was “sufficient to meet the crisis”.

Referring to the situation beyond July, the report said: “The council expects significant additional funding to be required.

“In addition, the council has frozen nonessential spend and this applies to both capital and revenue projects.

“The information is based on current knowledge and will fluctuate on a regular basis depending on our assessment of new and emerging risks and opportunities.

“The council continues to engage in an ongoing dialogue with the Ministry of Housing, Communities and Local Government and regular returns are submitted to ensure the full range of financial impacts are clear.”

The Government is expected to allocate some additional funding in the coming weeks which will be focussed on the local response to the track and trace scheme.

As part of the scheme, the council will expected to implement a virus control plan, as well as support efforts to track people who are suspected of infection.

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