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The Covid-19 pandemic could cost taxpayers more than £10million by the end of the year, according to new a forecast from the council.
Since lockdown came into force in March, Southend Council has had to introduce a range of extra support services but at the same time its revenue from things such as parking and council tax has dramatically fallen.
This has cost a total of £22.3million and while the Government has paid off £12million of this, there remains another £10.3million which has not been accounted for and may end up being the responsibility of Southend’s taxpayers.
The funding gap is almost £1million more than a previous forecast of £9.5million.
Council leader, Ian Gilbert (Lab), said: “Local government has never faced such a challenge whilst also wrestling with so much uncertainty.
“Like all authorities across the country, we have been hit hard financially by the impact of the Covid-19 pandemic.
“Despite this, we have managed to continue to deliver essential services to those who need them, with the support of our staff, volunteers, partners and local businesses.
“At the moment, although the overall financial impact is not completely clear, we know that we will have a significant budget shortfall to meet this year and in future years.
“We are basing our estimates on projected loss of income, additional pressures on key areas such as social care where we have seen an increase in demand due to the pandemic, and also the financial challenges that came with easing lockdown and implementing new measures when they have been needed.”
Forecasts show the council will receive £5million less income this year, with things like parking income, sports pitch hire and other fees significantly dropping, alongside a £4.6million potential shortfall in the collection of local council tax and business rates.
This drop in income has come as the authority has had to spend significant sums on a range of support schemes including food deliveries for vulnerable residents, putting over 120 rough sleepers into temporary accommodation and providing extra resources for adult social care providers.
The £10.3million budget shortfall is in addition to an already projected funding gap of £23.4million up to March 2025, which has been brought on due to Government cuts prior to the pandemic.
Cllr Gilbert added that economic recovery will be “a priority” for the council as it sets the 2021/22 budget “in the most challenging of circumstances”.
The council’s deputy leader, Councillor Ron Woodley (Ind), said he does not want the financial problems to mean cuts to services or a significant increase in council tax.
He said: “We are going to have to think our way out of this. More people are facing unemployment and we need to support them and make sure help is available, especially to the most vulnerable.
“At the same time people want all those things they expect from their council like neat and tidy roads, to feel safe and to have their bins emptied.
“When you look at this, £10million is a lot of money but if you consider our gross expenditure in our revenue budget is probably around region of £350million, it isn’t as much in proportion to that.
“It should be within our ability to make some adjustments to meet this cost.”
The cabinet will discuss the funding gaps in more detail at a meeting next week.