Chelmsford City Council could be facing a total deficit over the next five years of more than £40million, but does not qualify for a business rate refund scheme that private operators can benefit from.
Leader of Chelmsford City Council, Stephen Robinson, has asked councils to be treated like private leisure providers in qualifying for the business rate refund scheme that would save it £780,000.
The impact of Covid-19 has left a £9.5million budget deficit this year, which may not improve much past an annual £8million deficit over each of the following four years as it strives to meet its commitments such as housing, leisure and rubbish collection.
However, despite promises councils will be properly supported, Cllr Stephen Robinson says the reality is different – with the business rate refund available to private companies not being available to local authorities.
He said: “The business rate refund was meant to help businesses that were losing money, but actually has gone to businesses that haven’t lost any money such as supermarkets.
“It would save us £780,000 if we were treated the same as a private leisure operator. This is not a notional figure, this is an actual figure because we do actually pay the business rate.”
He said it was now time for the government to give local government more freedom to allow councils to work better in what will be a very different economic landscape post Covid-19.
He said: “We hope that government will recognise local government has stepped up over the past three months.
“The future of our local economy with people working from home means they will be spending more of their money locally. It is going to be different.
“Local councils need to be given devolved power both in policy and procedure but also finance to respond to local demands.
“But we are still one of the most centralised countries in the developed world.
“Central government needs to recognise it was local government that stepped up.
“What we are asking for is the freedom to make decisions locally and so we can respond to changing local circumstances.”
The council has had to use more than £6million from reserves to pay staff while revenue streams from the closure of car parks, leisure centres and theatres virtually dried up overnight.
The cash from these charges makes up over half of the council’s total income and pays for services like emptying bins, recycling collections, street cleaning, housing the homeless and community safety.
The council will be replenishing the reserves from £6million of internal borrowing from money in a separate account.
However, long term uncertainties remain.
A statement to cabinet on July 8 said: “There is no mistaking the financial challenge ahead for the council.
“The forecast revenue gap for 2021/22 is the largest the council has seen for some years and time is short in which to plan for, and achieve, the level of savings that may be required.
“The level of uncertainty is also increased, both due to the unknown length and final effects of the coronavirus pandemic and the level of financial support to be received from government. Both factors could significantly alter the forecasts in either direction.
“Within this uncertain environment, the council continues to strive to deliver the key objectives of Our Chelmsford; Our Plan, recognising that some may take longer or be more difficult to achieve.”
A spokesperson for the Ministry of Housing, Communities and Local Government said: “This government is giving councils unprecedented support for the spending pressures they have told us they’re facing during the pandemic.
“The £4.3 billion package, including £3.7 billion of un-ringfenced grants and the £600 million Infection Control Fund, demonstrates our commitment to making sure councils have the resources they need to continue to support their communities through this challenging time.
“We’re also introducing a co-payment scheme to cover irrecoverable sales, fees and charges income lost by councils during the pandemic.
“We intend to set out the principles which will be used to define relevant claims that would be eligible under the announced support scheme shortly.”