County council faces multi-million pound shortfall due to coronavirus pandemic
- Credit: Archant
Cambridgeshire County Council has projected a £7.7 million shortfall in its budget owing to the coronavirus pandemic and subsequent lockdown.
A council report on the impact of the virus showed that the council is projecting additional costs and lost income of £45.7 million.
Additional funds, including an estimated £10.3 million reimbursement from the NHS and £26 million in emergency Government funding, still leaves a gap of £7.7 million.
The county council’s projections, completed on May 8, are based on “service-related forecasts”.
The council report on the situation said: “In spite of the additional funding that has been allocated by the Government, the council is still facing a deficit of nearly £8 million which, if not supported through further Government funding rounds, will have to be met by considering all options available to this council.
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“A range of scenarios will need to be developed and tested to support business planning.
“As patterns of demand and behaviour become clearer following the immediate response stage, the organisation will need to have a range of options and contingency plans in place to anticipate and mitigate against financial pressures.”
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It is unclear if the Government will provide additional funding, with a number of councils across the country forecasting deficits, and some even warning of bankruptcy.
When asked by the Local Democracy Reporting Service on May 5 to clarify whether further additional funds would be provided to councils in Cambridgeshire, the Government did not directly answer the question.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “Council workers are the unsung heroes as we tackle this pandemic and by providing councils with over £3.2 billion in the fairest way possible, we’re working with them to tackle the immediate pressures they have told us they’re facing.
“Councils in Cambridgeshire will receive £44.7 million of the total share of £3.2 billion of this to deal with the pressures of coronavirus, while their core spending power rose by £39.2 million this financial year even before additional emergency funding was announced.
“The Government will continue to work closely with councils as the pandemic progresses.”
Cambridgeshire County Council’s latest report on the impact of the virus and lockdown on its finances will be discussed at its general purposes committee today (Thursday).
The crisis has seen the council paying for additional bed capacity, personal protective equipment, emergency supplies, increased funding for private social care providers and more.
Meanwhile the council’s income from parking, commercial investments and other sources are expected to drop.
The council’s report said it is currently expecting a £4.4million drop in revenue from parking and related services.
The council said it will develop impact assessments “to develop our plans for recovery and redesign”. The report says that those impact assessments have been started and will be “regularly updated”.
The council’s report also notes that the wider impact of the virus will affect people in Cambridgeshire for “years to come,” although there may also be opportunities to make positive changes.
The report highlighted: “The full extent of the impact of the Covid-19 pandemic on Cambridgeshire County Council and the Cambridgeshire community is still unknown.
“However, there is no doubt that this emergency has significantly disrupted many of our existing plans, behaviours and approaches and that the council is unlikely to return to the way it was prior to the crisis.
“The pandemic has brought an unprecedented level of global challenge, the effects of which will have an impact on the health, wellbeing and life chances of Cambridgeshire’s citizens for years to come.
“Looking forward, however, the national and local response and change of behaviours also offers a significant opportunity to build a more resilient and sustainable future.”
It says the council is facing “very challenging circumstances” but that it has “reacted quickly with the dual focus of responding to the crisis and keeping critical services running”.