Shortfall of £19m in budget due to pandemic
Telford & Wrekin Council’s budget currently faces a hit of £19 million due to the coronavirus pandemic, a report to the Council’s cabinet shows.
The additional budget pressure comes from the Council facing the combination of extra costs and reduced income due to the pandemic.
The report states that it expects the pandemic to increase costs by £12 million by the end of the year. This includes almost £4.5 million to support adult social care providers and clients, an extra £2.4 million providing support for children in care, while it has had to spend almost £480,000 on extra measures to help tackle homelessness and £430,000 to buy extra PPE. The council has for example committed to provide an initial supply of PPE to all schools to help them re-open as easily as possible.
On top of this the Council says it has expects to lose a further £17 million in income by the end of the year. This includes almost £3 million through the closure of leisure centres, almost £2.5 million in reduced business rental and around £1m due to the closure of its catering services and theatre, while income from planning and parking fees and the closure of its outdoor activity centre Arthog in Wales have also dried up.
The Council also predicts to lose around £8 million in reduced business rates and council tax as the impact of the pandemic hits many borough businesses and some residents face significantly reduced incomes.
Together these £29 million in extra costs have so far been offset by £10 million in extra funding from Government, creating the £19 million funding gap – five times more in just three months than the savings it had originally expected to need to make in its budget this year.
Cllr Rae Evans, cabinet lead for finance, said: “We estimate the financial impact of the pandemic this year will be around £19m and we need the Government’s help to plug this gap.
The Council has worked very hard to support our more vulnerable residents for example by providing free schools meals to those eligible weeks before any national scheme was put in place by the Government.
“We’ve met extra care costs for both vulnerable adults and children, while we’ve given schools initial supplies of PPE so these can reopen as quickly and as safely as possible.
“We’ve provided extra funding to help the homeless, support our foodbanks, mental health and domestic violence partner services – all very real pressures created by the lockdown.
“It is on top of the £123 million we have saved from our budget in the last ten years because of austerity.
“Ministers have promised that Government would support councils to do whatever was necessary to tackle the pandemic. We now ask the Government to make good on that promise and help us by filling the £19 million shortfall.
“Councils of all political colours agree – we need more help from the Government.