Cost of coronavirus to council soars to £3.8m

The coronavirus outbreak could cost Argyll and Bute Council up to £3.8 million, a report this week has warned, writes Ellis Butcher.

Estimates to the end of next month predict both a major drop in income with an unexpected spike in spending.

Vital savings targets for the year agreed in February have also been knocked out of kilter, according to a report going to the council’s business continuity committee (BCC) on Thursday.

Responding to the pandemic has caused ‘considerable’ cost pressures for the council, but local authority chiefs admit pinning an exact price on it is difficult.

Independent councillor Kieron Green, a member of the BCC who represents Oban North and Lorn, has warned that the overall financial hit to the council may not be ‘entirely clear’ for some time because no one can say how long lockdown could go on for.

Figures for the first quarter of the financial year suggest the local authority forecasts council tax collection to be down £600,000 and rent arrears up £15,000. It expects to spend £270,000 providing ‘additional support’ to homeless people.

With shops and businesses shut for months, the council also expects to see a £459,000 reduction on fees for collecting commercial waste.

There would also be a £410,000 shortfall in school meal income, and planning fees are expected to be down £188,000.

Furthermore, income from piers and harbours is tipped to fall £450,000. Ferry income is forecast to be down £116,000 and a series of charges related to the fishing industry – from fish landings to fish export certificates – will also be down as fleets remained tied-up.

Parking charges could plunge by £150,000.

A report said: ‘Dealing with the impact of COVID has been, and continues to be, very challenging for the council.’

The Scottish Government has already handed £895,000 to the council from a ‘hardship fund’ and the UK Government has proved £155 million to Scotland for distribution across its councils, although Argyll and Bute does note yet know what its share will be.

The council report added: ‘If no additional funding is distributed to councils this will have a detrimental impact on the council’s general fund which will mean we require a financial recovery plan.’

However, COVID-19 has seen the council find savings estimated at £772,0000. It has not spent as much on items such as utility bills because of the closure of council properties and fuel costs are down, among others.