Staffordshire council finances 'managing OK' despite £50 million coronavirus cost
Staffordshire County Council is “managing OK” despite facing a £50 million coronavirus cost, according to a senior member – but there are concerns about its longer term financial future.
The council is expecting to see a drop in income of just under £4m after lockdown led to the closure of services such as libraries – and it has also lost money from rents and car parking.
Its cost-cutting programme is also set to be hit by the pandemic, as services will be unable to make the savings budgeted for before the crisis, a scrutiny meeting heard on Thursday.
But the council has been given grant funding by the government to help meet extra costs incurred during the recent weeks and months.
Councillor Mike Sutherland, cabinet member for finance, said: “The county council has been allocated £37.8m for general Covid-19 support, along with £9.9m for adult social care and infection control. Further funding is expected for the council’s role in test and trace arrangements.
Covid-19 coverage:
“The Covid-19 support grants have been used to fund a range of measures including extra funding for care providers in addition to the increases already included in the MTFS (Medium Term Financial Strategy), PPE (personal protective equipment), increased volumes of care packages and facilities for mortality management, food for vulnerable people, additional staff to support care providers, volunteer expenses and nursery care and childminders to stay open for key workers.
“In addition there has been a loss of income, currently forecast at around just shy of £4m. This is as a result of closed car parks, loss of rent at enterprise centres, closed libraries and schools.
“Services are striving to deal with the pandemic and its consequences – being realistic they may not be able to deliver the savings currently in their budgets. At the moment we’re tracking that at £14m.
“In the short term I would say we are managing OK – I think we have the wherewithal to get through this year. However there is a cloud towards the end of the year.
Impact
“It is prudent and wise to anticipate that collection rates for business rates and council tax will be reduced and this could well impact us when the collection fund is tallied up at the end of the year – and therefore start to impact 2021/22.
"The grants allocated so far are welcomed. The current forecast for the total cost is around £50m for this year. This includes loss of income and unachieved savings. It does not include impact coming through next year.
“Work is ongoing to assess the longer term impact on the council’s finances, which includes increased demand for adult social care, increased demand for children’s services, support for local businesses, economic regeneration and delivery of transformation and cost reduction programmes.”
Staffordshire County Council’s PPE bill is set to run to over £3m, after the authority began buying in extra supplies for front line health and care workers ahead of the lockdown.
Councillor Sue Woodward said: “We’re told that only four per cent of the PPE we have needed in Staffordshire has come via national sources. I’m very grateful to the cabinet that they are putting additional resources into procuring PPE because we want to make sure our residents are as safe as possible.
“I’m concerned we are getting messages on a national level but we’re having to pay for additional PPE at a Staffordshire level and therefore there is an impact on our council tax payers. Are we paying twice?"
Councillor Ian Parry raised concerns that financial controls may be less strict during the time of crisis and some services may have been duplicated.
“My fundamental question is how we pay for it”, he said. “There is going to be a gap despite the fact the Government have been relatively generous in terms of the grant funding they have given.
“We have got to work out how we pay for this. Is it going to be an in-year savings challenge or are we going to look for a longer piece of road to run on?
“There is borrowing potential – provided there can be permission given for borrowing potential. Is this something you can borrow against and ensure there is a smoother exit from this financial burden we are going to be faced with or is this going to be a cliff edge type response financially?
“Given there is no mandate has there been any thought given to as how we might consult people in Staffordshire as to how they think? Would it be through increased council tax, would it be through longer term paying it off through borrowing or are they prepared to face further reductions in services and reductions in assets and other things within the county?”
