Difficult decisions despite cash boost to fight coronavirus
FINANCE OFFICER SAYS SUPPORT ‘DISAPPOINTING’
EAST Riding Council has been allocated more than £1m in new government coronavirus funding, but its finance lead warned “very difficult” decisions lie ahead to close a looming £10m gap.
East Riding Council is set to use its £1,063,690 share of about £1bn allocated to local authorities to help cover lost income and ease pressure on budgets from coronavirus.
The latest round of funding comes as the council has already received £21m in emergency funding from the Government since the start of the pandemic.
A council spokesman said of the latest grant: “The funds will be used to help manage the on-going pressures on our budget arising from the pandemic, which will include additional spending particularly in supporting adult social care providers as well as losses in customer receipts such as in leisure and car parking.”
But the council’s chief finance officer Julian Neilson said cuts and council tax rises could be looked at to plug a growing £10m gap next year.
It comes as Hull City Council’s Finance and Value For Money Overview and Scrutiny Committee heard on Friday its coronavirus bill was forecast at £71m for a year.
The city received £8.7m, with council finance portfolio holder Phil Webster saying officials were at the start of the process of finding ways to plug the gap.
Mr Neilson told East Riding’s Overview and Management Committee on Thursday the overall financial hit to the council was £30m so far, adding the £1m from the Government was a “disappointing” amount.
The officer said while £9.6m cuts made earlier this year and government aid meant the council was on track for a balanced budget, it could face “significant” financial troubles later.
Mr Neilson said: “Reductions in travel costs and savings have also helped us to project a balanced budget for this year.
“That’s a tremendous achievement, but the budget position going forward is very uncertain and volatile at the moment and there may be further restrictions that impact us, it’s massively challenging.
“It’s disappointing that we only received £1m this time, but it appears areas in higher tier lockdowns have been prioritised and we should be thankful we’re currently in the lowest tier.
“We’re expecting to receive further compensation in the region of £10m for losses and expenditure.
“But we’re facing pressures in future financial years when the biggest challenges will come.
“In February, before the pandemic, we were projecting a £1.6m budget deficit, rising to £3.8m by 2024.
“That would have been manageable, it’s the smallest gap I’ve seen in my time at the council.
“But now we’ve had the pandemic and will have to deal with financial impact of that and the wider impact on the economy, and that’s very hard to predict at the moment.
“We’ve seen a 20 per cent increase in council tax support case loads and claims for discounts are rising.