The Covid-19 pandemic has had a £10 million impact on West Suffolk Council’s finances according to latest figures which have been released today.
And now the government has been urged to provide much needed funding to help councils across the country meet the financial challenge it is now facing.
Like many authorities West Suffolk Council Cabinet is looking at how the pandemic has impacted on the current year’s budget and its medium-term plans.
Due to the pandemic the authority has been focused on supporting businesses with millions of pounds of grants and protecting the most vulnerable by supplying food, medicine and support. All this while delivering services which themselves have been impacted by the virus.
The estimated impact of COVID-19 is £10.2 million (including an estimated £8 million loss of income) on the council budget this financial year 2020/21. Government has given £1.8 million to help with the impact of COVID-19 (£1.5 million remains of that for this financial year). This leaves the council to find £8.7 million this current financial year to balance the budget.
The report that goes to Cabinet on July 21, says that balances and reserves can be used to help fill the gap this year. However, it highlights the ramifications of having to repay them and ongoing loss of income could mean difficult decisions effecting funding and services in future years.
Due to the effects of COVID-19, on the council budget the report suggests utilising in full the general fund balance and other reserves, totalling £6.1 million.
In addition, it proposes to make some general cost reductions and mid-year savings measures to continue to protect essential services, deliver what communities, businesses and economy need while balancing the books for this financial year.
The report to Cabinet highlights that the council is in a stronger position thanks to prudent investment and strong financial leadership. The council’s ability to respond to COVID-19 has also been aided by the council’s families and community approach which has meant the authority work with local communities and volunteer groups to deliver tailored solutions and initiatives.
The government has recently announced new funding for local authorities to help reduce the impact of lost income, but guidance and details are still awaited on this and what it means for West Suffolk. Any additional funding received will look to take pressure off the longer term need to replenish the balances and reserves used to assist the council through the current financial year.
Only 20% of services are paid for by Council Tax with little or no grant funding from government. The rest of the funds government expects councils to make through generating income.
Councillors have already called on MPs, ministers and government to provide fairer funding for local authorities as the latest predictions West Suffolk Council reveals the cost of responding to COVID-19 leaves them £8.7m to find in a year through savings, balances and reserves.
John Griffiths, leader of West Suffolk Council, said: “We have taken a leading role in the response to COVID-19 but this has an effect on our budget. Our work with partners has meant the most vulnerable have been able to get medicine, food and support while businesses have been able to get millions of pounds in grants. Equally we continued to deliver services despite a severe loss of income and capacity.
“But this comes at a cost and even with government funding this year we have a £8.7million gap in our budget to meet. We believe we will be able to meet this challenge this year but it will of course have consequences for what we can afford in following years.
“We are not alone in this – councils across the nation are having to change their budget mid-year and facing major financial challenges.
“We never wanted to be in this position but our strategic framework, vision and aims still hold true. They also put us in good stead in the swiftness and effectiveness of our response to the pandemic and will help us move forward as part of the recovery phase. That said, we have to face the financial situation and reality now so we can progress things for our residents in the best possible way in the future. We are pushing hard for further funding and certainty over our future funding from government.”