Crisis response ‘could cost council £29m’ in spend and lost income

RESPONDING to the coronavirus pandemic could cost Cardiff council £29m in additional spend and lost revenue in the first three months of the financial year, a report has revealed.

A statement from the Cabinet to Cardiff council has laid bare the expense involved in dealing with the effects of the virus.

The authority estimates it will spend more than £18m responding to the crisis and a further £11m could be lost in income by the end of June 2020, as a direct result of Covid-19.

The £18m Covid-related spend includes procuring personal protective equipment (PPE), providing emergency accommodation for homeless people and continuing to provide food and financial assistance to those entitled to free school meals.

This spend also covers the additional costs of providing care during the pandemic, the increased costs of changes to ensure the safety of delivering services, like waste disposal and the delivery of bereavement services, as well as the provision of supplier relief.

This £18m estimated additional expenditure is being kept under review, and is being updated regularly as further pressures emerge.

And the change.

The council is yet to fully assess the impact of a significant increase in the number of applications for Council Tax Support.

Cardiff council says it hopes it will be able to claim back the additional £18m expenditure from Welsh Government through the Covid-19 Hardship Fund.

The fund currently totals £110m and is earmarked for all local authorities in Wales to access. To date Cardiff council has received £465,000 to cover Covid-related spend during the latter weeks of March.

The report says it is likely, however, that the current funding level announced so far will not be enough to cover all expenditure requirements at an all-Wales level, and any decision on whether income loss will be reimbursed by Welsh Government is yet to be taken.

Cabinet member for Finance, Modernisation and Performance Cllr Chris Weaver said: “Cardiff council has reacted quickly to the crisis, changing the way we work, putting clear focus on maintaining essential services which deliver for our most vulnerable residents.

“Over the past two months our services have had to respond and adapt to the crisis as events continued to unfold.

“Of course, all of this comes at a cost and we have spent more than £18m ensuring the city continues to run and the most vulnerable among us do not suffer unnecessarily. figure could yet

“Our focus has always been on ensuring the resilience of services critical to our Covid-19 response, doing everything we can to protect our most vulnerable citizens and our staff, and trying to halt the virus spreading.

“When we look at income we estimate that we will lose in excess of £11m as a direct result of Covid-19.

“Lost income during the lockdown includes the closure of the council’s cultural and sporting venues such as theatres, Cardiff Castle, Cardiff White Water and City Hall functions.

“It also reflects a reduction in activity in other income-generating areas including planning, parking, moving traffic offences, trade waste, registration and school catering.

“As with expenditure, this estimate will be monitored closely and updated as required. Over time the assessment of further income streams will need to be analysed, with the most significant being the potential for any impact on the collection of council tax this year.

“Every penny we take in council tax now is essential. It helps us maintain regular cashflow, which allows us to manage some of the expenditure and income losses we have seen.”

Cllr Weaver added: “Welsh Government are working closely with local authorities, and we are submitting claims to them for Covid-related costs on a monthly basis.

“Our submission for March was paid in full. We know, however, that only part of that month was affected by lockdown, and the costs in future months are much higher.

“There is, of course, an element of risk regarding the ongoing recovery of costs. In particular, as current funding arrangements are confirmed to the end of June 2020 only.

“It’s clear to us that the challenges we face and the money we are spending to deal with those challenges will extend beyond that.

“The work monitoring our budget for this year and ensuring vital services are funded will continue, as well as preparing for next year’s budget and beyond.”

A Welsh Local Government Association spokesman said: “Budgets are being strained by the combined pressure of huge extra costs and loss of revenue, which will threaten the sustainability of our essential local services.

“Local authority leaders frequently discuss the current financial position with Welsh Government ministers in regular meetings, where assurances have been welcomed by councils.

“It’s important now that assurances get translated into concrete commitments in order to meet black holes in services’ budgets.”