Coronavirus leaves council with £7m bill

Peterborough City Council is facing a £7m budget hole in its finances due to the cost of the coronavirus pandemic.

As a result of the mounting costs of paying for the COVID-19 crisis, Peterborough City Council is facing the shortfall in its funding, even after help from the government.

It’s estimated that the crisis will cost £18.4m which exceeds the £10.998m granted to Peterborough City Council by the government - £5.364m on March 27 and an additional £5.634m on April 18 - leaving a gap of £7.402m. The council is likely to dip into its reserves while it seeks additional government support.

Peterborough City Council reserves currently stand at £13.9m. If the shortfall is taken from there, it will leave just £6.498m in reserve.

Cllr David Seaton, cabinet member for finance, told this week’s ‘virtual’ cabinet meeting: “The government have provided substantial support for local authorities amounting to some £2.6bn of direct government grant funding for the crisis and our share of that has been £10.998m.

“In addition, there has been £1.8bn of rates relief, for leisure, hospitality, retail and non-council run nurseries. For Peterborough, this amounted to an award of £37m.

“Plus, there was £3bn of grant support to rural and small businesses, leisure, hospitality, and retail. For Peterborough, the city council was awarded £34.5m.

“There was also a grant of £500m for council tax relief, which amounted to £1.6m for residents of Peterborough.

“We made available almost immediately grants of £10,000 and £25,000 and I’m able to announce that as of today we’ve made payments to 93.26% of the 2,600 local applicants.

“This means we’re the eleventh best council in the country at getting these grants out to local businesses and we were the only council in Cambridgeshire to achieve the government target of 90% pay-outs.

“The ongoing impact on the revenue budget then is that we have an estimated £18.4m worth of pressures, but only £10.998m of government funding.

“So, we will need to draw £7.402m from reserves.

“Given that the council needs to provide vital services and re-build our budget in 2021/22, the £6.498m left in reserves means that we will have to go back to the government at some stage for additional funding help to get a balanced budget position.

“We’d already started detailed financial planning for that year before the COVID-19 emergency began, but of course now all our assumptions and associated impacts will have to be reviewed.

“What I would say is that Peterborough is no different to any other council up and down the country at the moment – we’re all in the same boat in this regard.”

City councillor and officers ytook part in the first online council meeting on Monday this week.