Councils need to know what extra support is likely to be offered by the Government, says the leader of Chelmsford City Council as local authorities begin setting budgets for the next year.
Knowing what support is likely to be available is understood to be particularly important for local authorities facing huge income gaps.
Chelmsford City Council was already facing a £3 million budget gap for 2020/2021 from having main income streams such as leisure and car parking severely curtailed as a result of COVID-19.
Leader of Chelmsford City Council, Stephen Robinson, said: “All councils need to know in the next few days what extra support we are likely to get because we have to start setting out budgets for next year in the next couple of weeks.”
Some £4.8 million intended to be used to fund capital projects will instead be used to make up a shortfall in Chelmsford City Council’s finances caused by the knock-on from COVID-19.
The net budget shortfall for 2020/21 is expected to be some £3 million due to several of the council’s income streams such as leisure centres, theatres and importantly, car parking being severely impacted by restrictions and lockdowns.
To give some idea of how damaging restrictions have been to council finances, Chelmsford City Council has admitted that the four-week lockdown due to end in December reduced its income by another £400,000.
The shortfall can be funded by not making the budgeted contributions to revenue of £4.8 million.
This would provide around £1.8 million to be used to increase the un-earmarked reserves to help manage COVID-19 and other risks in 2021/22.
But it means that any future purchasing plans, such as new refuse vehicles, will have to be funded through borrowing, if they are made at all.
The government reimbursed councils such as Chelmsford 70p for every £1 of lost income.
Cllr Robinson added: “We are back to the situation where we were in March and April and the government told us to do whatever was needed to protect the public and promised to cover all our costs and they didn’t.
“Chelmsford is in a slightly stronger position than many councils, but we have been looking at reducing costs whether that is to reduce staff and difficult decisions like that in order to make the books balance.
“The Government once again failed to give more than one year of a settlement in the autumn statement and the actual settlement itself wasn’t a grant but rather an assumption we would put council tax up.
“It also contained a ridiculous assumption that the number of new homes would rise by 1.7 per cent which is a ridiculous assumption.”