Grim financial predictions for Fife as £20m Covid-19 black hole likely

The C ovid -19 pandemic could impact Perth and Kinross Council coffers by more than £30 million, its top accountant has warned.

The local authority is facing a deepening financial black hole – currently projected to be in excess of £12 m–as it continues to deal with the costs of the pandemic, with the loss of more than £6m in income.

Scott Walker, chief accountant at the local authority, also fears it could lose nearly £6 min council tax.

On September 30, the financial cost of the pandemic was expected to reach no more than £26m.

However, less than two months later that figure is now believed to be closer to the best case scenario for the local authority.

In a report to go before councillors tomorrow, Mr Walker outlined how the projected impact of C ovid -19 on council finances had risen by £4m in the short space of time.

He said: “At that time (September 30), the gross impact of Covid on the council’s in-year financial position was estimated at between £22m and £26.8m.

“Using the latest information available, the projected impact of C ovid -19 on council expenditure is currently estimated at approximately £12.4m.

“This is an increase of £1.6 mon the position reported to council in September.

“The main reasons for this increase are the inclusion of updated projections in relation to education – teaching costs, school logistics and the provision of home to school transport – and anticipated costs in relation to community mental health.

“The projected impact of Covid-19 on council income is currently estimated at approximately £6.3m.

“This is an increase of £1.4 mon the position reported to council in September.

“The main reasons for this movement are the inclusion of updated projections in relation to school meals, breakfast clubs, council tax reduction scheme and recharges to the capital budget.”

He concluded: “The committee is asked to note the potential gross financial impact of Covid- 19 of between £26m and £30.4m.”

The financial papers also lay bare the struggle for the council’ s arm’ s-length external organisations (ALEOs), Live Active Leisure (LAL) and Culture Perth and Kinross.

LAL, which runs the crisis- hit Perth Leisure Centre which is currently facing a further 12-month closure, is projecting losses of between £650,000 and £1m.

Culture Perth and Kinross is looking at a financial hit of approximately £200,000.

Figures for Horsecross Arts, the council’s third A LEO, have not been included in the report, however losses in the arts sector are expected to be considerable and Horsecross has made more than 100 employees redundant since the beginning of the outbreak.

Despite ongoing fears for struggling business amid the lockdown restrictions, the new report also suggests that Perth and Kinross Council has only paid out half of the business grant money made available to it.

Mr Walker wrote the council will receive £755 ,000 to support businesses impacted by C ovid -19, but as of November 10 had only paid out £377,845.

Of the 401 applications by business for the sought- after grants, 154 had been rejected.

The projected impact of Covid-19 on council income is estimated at £6.3 million