By Local Democracy Reporter
THE financial damage Covid-19 has caused to Thurrock’s economy is expected to go on for several years even if the lockdown is lifted.
In a report described by councillors as “sobering” and “unprecedented”, the council’s head of finances Sean Clark outlined how the authority could be in line to lose millions as a result of the pandemic.
Speaking during a Corporate Overview and Scrutiny Committee on Tuesday night, Mr Clark explained that while Covid-19 has cost the council £9.7million, of which £9.2million has been reimbursed by the government, the “larger impact” is expected next year.
He said this is due to a potentially major drop in council income from council tax and business rates.
“We know overall collection rates will go down and all of those losses are building up this year to become an immediate cost next year,” he said.
“We collect £70 million in council tax, so for every 1 per cent we might lose, that’s £700,000 and so you can see how that might add up quickly.”
He continued: “Looking at business rates, will all the businesses survive this? It is likely we will collect a lot less than estimated. It could easily run into several million pounds, how much it is really going to be I have no idea. It could be £5million, £10million, £15million, it could be any of those figures.
“We then have to look at what government might do. We are already looking at what we may have to do to balance the budgets.”
Labour councillor and chair of the meeting Oliver Gerrish called it a “sobering view”.
“Clearly this is not going to go away with lockdown,” he continued.
“We are talking about many years of impact on the council’s finances.”
However, Mr Clark gave an optimistic view on the authority’s reserve cash which stand at £17million.
He claimed this was thanks to the council’s controversial borrowing to invest strategy which has generated between £33million and 35 million in profits through investments in renewable energy schemes. But it has also pushed resulted in the council borrowing more than £1billion.
Despite serious concerns being raised about the transparency of the borrowing by opposition Labour councillors, Conservative councillor Jack Duffin praised Mr Clark and his team for adopting the strategy.