Counting the cost Council predicts debts of £2.5m in coronavirus crisis

AGLOUCESTERSHIRE council could be facing debts of £2.5 million if the Government doesn’t provide any more money to cope with the coronavirus pandemic, according to a council document.

Cotswold District Council lost income of £428,000 up to April 30 and predicts it will lose out on £2.8m by the end of the financial year in March 2021, the district council report said.

And further costs such as keeping leisure and cultural services going with little income and providing accommodation for homeless people as a result of the crisis is forecast to total £548,000 next year.

The Government provided £941,887 across March and April to support the authority during the pandemic – but a report says the package reduces its debt to £2.5m forecast by the end of March 2021.

The majority of lost income is expected be from car parking totalling £1,765,000 by the end of next year, the report said.

The news comes as Tewkesbury Borough Council reveals the crisis is expected to cost the authority £1.8m by the end of the year, taking into account the £1m government package.

The Cotswold District Council document said: “The overall financial impact to the council for April 2020 taking into account additional costs [...] and lost income [...] is therefore around £0.5million and forecast impact for the rest of the financial year is around £3.4 million.

“To date, the council has received two tranches of additional funding from Government – £33,080 in March 2020, and £908,807 in April 2020. If no further funding is made available from Government, the forecast net financial impact to the council in 2020/21 will be £2.5 million.”

Meanwhile, officers at Tewkesbury Borough Council said the authority is in a “good position” to tackle the financial impact of the pandemic and to avoid a short-term need to stop all new expenditure, a process known as a Section 114 notice.

However, in a council document they said the authority needs to balance its budget from council “one-offs”, and that the Government needs to “quickly clarify” whether it will provide councils with more money.

A Tewkesbury Borough Council document said: “The Government will need to quickly clarify its intentions on a range of financial issues affecting local government finance and also whether it will be offering further financial support to councils in order to fully understand the size of deficit faced in the following financial year.

“The council has steadily increased its reserve base in recent years which leaves it in a good position to tackle the financial impact of the pandemic and to avoid a short-term need to issue a Section 114 Notice.

“However, the financial challenge presented by the pandemic, coupled with the existing challenges arising from a long period of austerity and planned change to the funding of local authorities, should not be underestimated and will require strong financial management and discipline by all involved with the council in order ensure its future sustainability.”