Covid set to leave £18million shortfall in council budget

County Hall, which administers areas such as roads, health and education for residents in Melton borough and the rest of the county, was already experiencing financial pressure before the pandemic due in large part, it says, to a lack of sufficient funding from government,

The strain on the counci’s budget was intensified following lockdown in March with the need to supports services and vulnerable people at a time when income was significantly reduced from business rates, Council Tax and commerical income.

Overspend from the health crisis was expected to be nearer to £28million but it has been revised down to £18million.

Extra costs and loss of income have increased costs by £90million this year alone.

Councillor Byron Rhodes, cabinet member for finance, said: “Covid-19 has exacerbated an already challenging financial situation.

“I’m pleased that the measures we’re taking are working but the financial impact in future years is even more uncertain.

“Even without further lockdowns, it is vital that the county council continues to reduce this year’s gap to avoid an impossible challenge building up in future.”

Pressure on County Hall finances during the coronavirus crisis have come from supporting vulnerable people, recruiting new staff and fully reimbursing them for the national living wage, paying social care providers in advance and an increase in fees paid to providers.

Keeping services going during the pandemic has also been expensive and there have been higher waste disposal, IT and construction costs.

Councillor Rhodes added: “The financial difficulties experienced pre-Covid, relating to demand for services, have not gone away and the mitigations have been disrupted by the crisis.

“This means that focusing on our priorities is crucial.

“And that’s why we’re working closely with managers to stop non-essential recruitment and spend and step up spending controls.

“Thanks to taking tough decisions since 2010, we’re in a good position compared to other councils who are effectively about to run out of money.

“And furloughing some staff, reviewing capital projects and controlling spend mean we’re not at risk of being unable to balance the books in the short term.”

He said there was uncertainty for the authority for the coming months with Prime Minister Boris Johnson announcing a tightening of social distancing regulations for the next few weeks, commenting: “Government support has been significant but not enough.

“Without funding reform or a major efficiency initiative, more savings will be required including service reductions.

“The rule of six announcement this week highlights how precarious the situation is - and the real risk of a return to greater lockdowns that would have significant financial consequences.”

A report into the county council’s budget will be discussed by members of the scrutiny committee on Monday and the cabinet next Friday.