Covid cost to Telford & Wrekin Council revealed
Covid has cost a council more than £4.5m with the closure of sports centres, a theatre and car parks, it has been revealed.
Telford & Wrekin Council's end-of-year budget report shines a light on the financial strain caused by the pandemic, as many services have faced complete shutdown over successive months.
In their report the authority's Finance and HR director Ken Clarke and Corporate Finance Manager Pauline Harris write that the council still managed to underspend its £129 million 2020-21 revenue budget by just under £40,000.
They said that doing so in the face of the coronavirus pandemic shows “ongoing financial resilience” and provides a “solid basis” for this year, but added caution that the medium term is “very uncertain” – and the council is likely to have to find £19.5 million in savings between now and 2024.
Telford & Wrekin Council’s Cabinet will receive Mr Clarke’s and Ms Harris’s 2020-21 out-turn report when it meets on Thursday.
It says the 2020-21 revenue budget was set at £128,975,000 but true expenditure totalled 0.03 per cent less than that, at £128,936,000.
The report states: “Clearly there were a number of significant variations from the approved budget in 2020-21, the majority related to Covid-19."
The purchasing of long-term care was the biggest area of overspend, with £6.9 million extra on “support provided to care for providers and clients due to Covid-19, and increased levels of care needs”.
“Costs associated with preventing homelessness during the pandemic” accounted for £664,000 more, and lost income from rents totalled £694,000.
The closure of council leisure facilities, The Place theatre and car parks cost £3.8 million, £494,00 and £358,000 respectively.
Savings
Expenditure was down in other areas.
Day care provision was not needed due to lockdown-enforced closures, leading to a £1.6 million underspend in charges, while the council spent £284,000 less than budgeted on care for children with disabilities because “many recipients are clinically vulnerable and were shielded during the pandemic”, leading to lower uptake of services, Mr Clarke and Ms Harris write.
Just under £5.7 million was saved through “a combination of continued borrowing at lower-than-budgeted short-term rates and lower-than-anticipated projected long-term rates”, they add.
Looking ahead to future years, Mr Clarke and Ms Harris write: “Due to the impact of Covid-19, the major planned reforms to the local government finance system have been postponed with no date for implementation confirmed.
"Changes to the New Homes Bonus system are, however, expected to come into force during 2022-23 and changes to adult social care funding through the long-awaited green paper are also potentially expected.
“Using the limited information that was available when the budget was set out in March, it was anticipated that the council would need to deliver the £8.8 million savings already identified for 2021-22 and 2022-23 plus around £10.7 million of further savings over the two years 2022-23 and 2023-24.”
They write that the authority has already made £126.4 million of savings, “equivalent to about £700 for every person living in the borough”, since 2009.
It comes as Government figures show a combined drop in council tax income of £3.3m for county authorities during the coronavirus pandemic.
According to the data from the Ministry of Housing, Local Government and Communities Telford & Wrekin council will have to address an estimated shortfall of £3,200,000, while neighbouring Shropshire Council is predicted to have a shortfall of £340,700.
