Thanet council is planning a report to Cabinet members next month to assess the financial impact of COVID-19 on the 2020-21 budget as it faces £5.5million in lost income.
The lockdown from March 23, combined with many people living on 80% wages through furlough and businesses attempting to exist on government grants and adapted business schemes, means the council has suffered financial losses in areas from parking fees to council tax and business rates.
Although government emergency funding has so far amounted to £1.5 million it is against total General Fund losses currently estimated at £5.5 million.
This is made up of £3 million from fees and charges -inclusive of £1 million is car parking fees – £1.5 million from Council Tax and Business Rates and £1 million of additional estimated expenditure.
Resources have also been used for the council’s community response to the crisis with a helpline and coordinating food deliveries to vulnerable people in partnership with established groups such as the Salvation Army, Global Generation Church, Kent Coast Volunteering, Age UK and town and parish councils to make sure people in need are connected to those best able to help them either due to proximity or specialist skills.
Council leader Rick Everitt says the crisis has had a ‘significant’ effect on funds and, like other councils, TDC is lobbying the government for more financial aid.
He said: “The council has obviously prioritised the needs of the community during the response phase of the Covid-19 emergency. This has had a significant effect on the budget agreed in February, just as it will have done in other district councils across Kent and beyond. The loss of revenue during the lockdown is particularly significant.
“It’s too soon to be very precise about the extent of the impact, but we can say that the sums we have received from the government to date won’t cover it. In common with every other council, we are lobbying for more and we remain hopeful we will get more in due course.
“In the meantime. there is no risk of the council running out of money, as we do have reserves which we can call upon, although these will need to be replenished and there may be an impact on activities that would otherwise have been funded from those reserves.
“It is a difficult situation, but we will be looking to safeguard frontline services to minimise any impact on residents as the recovery takes shape.”
The estimated loss for 2020-21 is based on an assumption that income will recover from late summer.
Thanet District Council has received other funding for initiatives such as funding for rough sleeping and reopening the high streets. It has also received funding for Business Rates reliefs, business grants, discretionary grants and Council Tax hardship, all of which are passed through the council’s accounts – if the funding isn’t used for the purposes it is granted, it is returned to Government.
‘Financial pressures ahead’
Local Government Association chairman Cllr James Jamieson said: “Local government continues to lead the way during the emergency response to this crisis, but they are being stretched to the maximum.
“Vital emergency funding from government has helped meet extra cost pressures and lost income in the past three months.
“Concerns remain about the ongoing financial pressures ahead. Councils will need further funding and financial flexibilities in the weeks and months ahead to meet ongoing COVID-19 pressures and to keep services running normally.
“Certainty around this is desperately needed so councils can balance their budgets this year and take vital decisions about how to pay for vital local services next year.
“Councils not only need to be fully funded to help our communities beat this virus now but also to help support the nation as we tackle the unprecedented social and economic task ahead and move into the next phase.”