COVENTRY City Council has incurred extraordinary costs from Covid-19 and income losses of £34.2million from national social distancing and lockdown measures.
This has led to a headline overspend of £33.3m including an overspend in children’s services of £9m as a result of higher looked after children numbers.
The quarter three finance position is due to be reported at the Council’s Cabinet meeting on Tuesday, February 16.
For this period the Council has applied for Covid-19 emergency funding and grants from the government covering £33.8m.
A further £2.8m Covid funding grant will bring the children’s services forecast overspend down to £6.2m.
After applying all of the grants, the council is reporting a net underspend of £0.5m.
Coun Richard Brown, Cabinet Member for Finance, said the council’s finance officers had worked hard to balance the books during what had been an extraordinary period.
But he said the latest figures indicated council tax and business rates revenue was estimated to fall by £12m over two years, and this was posing a threat to council finances going forward.
He added: “We expect there to be further government support in 2021/22, but there remains a strong risk that not all costs will be covered.
“We are working hard to identify ways to mitigate the effect of Covid-19, but this places great uncertainty on council budgeting going forward in areas such as council tax and business rates collection.
“There has been great work in areas such as housing and homelessness where officers have identified more cost-effective temporary accommodation solutions and are reporting a £2.1m underspend but across council services there very few services that have not struggled.
“It feels as though we are trying to stay afloat as a council, but it is becoming harder and harder – especially when the government are forcing tax-payers to fund a bailing bucket to temporarily keep us a float when our boat really needs long term repairs.”
He added – on a more positive note – capital spending was projected to be £231m which exceeded a target of the £216m reported in 2019/20.
“This is despite Covid and almost 80 per cent of the programme is financed by external funding being brought into the city and region.
“The programme includes major scheme expenditure on the A46 Link Road, Coventry Station masterplan, Whitley South infrastructure, public realm, secondary schools expansion and the national battery plant.”
A significant proportion of other Covid impacts related to income which had not been achievable under lockdown or which may not be achievable in subsequent months whilst recovery takes place.
• £3m potential rent losses and associated pressures in respect of the council’s commercial property portfolio
• £5m in respect of significantly reduced car parking, bus gate and parking enforcement activity.
• Lower but still significant Covid-related income shortfalls are expected in other service areas including land charges, court costs, planning, commercial waste, parks, the Outdoor Education Service and other school traded services.
The pandemic had also resulted in expenditure pressures across a range of other services including Adult Social Care costs of £1.9m including provider support, Personal Protective Equipment costs of £1.6m, provision of emergency mortuary capacity of £1.6m, waste disposal and safer working costs within Waste and Street Services of £1.5m and the impact on the cost of housing rough sleepers during lockdown and expected activity increase in housing of £1.3m.