County council lays out ‘dire financial situation’
Authority has so far been given £28m but more is needed it says
THE “rather dire financial situation” of Leicestershire County Council was laid out during a public meeting.
The leader of the Tory-run authority, Nick Rushton, introduced an emergency report to cabinet on the council’s finances as a result of the coronavirus crisis and painted a less than optimistic picture.
Chris Tambini, director of corporate resources, told cabinet members the authority had so far been given £28 million in two chunks by central government. He said that at least the same again would be needed to balance the books.
Forecasts show that loss of income and extra spending pressures will amount to £56 million.
Mr Tambini said: “Clearly, the biggest pressure is adult social care. There are also extra costs around recovery when it comes to providing services in a socially distanced way.
“We’ve looking at £5 million for that, but we’re still working through the actual costs.
“Loss of income is also a big pressure, council tax and business rates account for £400 million of our income.
“We think there will be a £10 million reduction on those income streams but we’re still working on that and I must admit I do fear the £10 million figure will increase.”
Officers are confident the council will cope with the extra costs this year but have “major concerns” about the medium-term impact.
Mr Tambini said: “We can balance this year, but that will involve reprioritising the capital programme.
“We’ll look at that in September, I think at that stage it will involve some pretty tough decisions. We do have some major concerns about the medium term.
“We know we are now in recession and that recession usually means a further decrease in our income streams. What we also see during recession is more demand on our services which is another pressure.”
Outlining what can be done to mitigate the long-term impact, Mr Tambini said: “Top of the list would clearly be more funding from central government.
“But equally important is getting some kind of income guarantee around council tax and business rates. If we got that, it would be a big step forward.
“There is a certain inevitability that this crisis will push some local authorities into severe financial difficulty.
“There’s a plea in this report that the Ministry of Housing, Communities and Local Government takes a look at the structure of local government rather than making a series of tactical decisions.
“This was always going to be a challenging financial year, there are pressures with adults’ social care and children’s social care and our biggest financial pressure is in the area of special educational needs, we’re still forecasting a £20 million deficit.”
He signed off by saying: “The county council went into this with sound finances and even for us this will be massive challenge. Despite that I remain confident that if we do get money from government we will manage it, but it is going to be a couple of tough years coming up.”