Council uses Government funding to ensure services continue for residents.

Date: 
Thursday, June 25, 2020

Councils across the country have been reporting additional financial pressures arising from additional expenditure incurred in their local responses to the Covid-19 pandemic, as well as loss of key income streams which fund council services. This could lead to many councils incurring overspends in the 2020/21 financial year and may threaten their legal obligation to set a balanced budget from 2021/22 onwards.

In response to the COVID-19 pandemic the Government made £3.2bn of un-ringfenced funding available nationally to help councils mitigate their financial exposure arising from the crisis. The allocation to Rochford District Council was £902,370.

In common with all authorities, Rochford District Council has been required to report to Government how it intends to use the grant allocation made to it; this financial return has also been shared with all Councillors for their information.

At the Council’s Executive meeting on 17 June, a question was asked by a Councillor about how the Council intended to use its grant allocation. The response given by the Portfolio Holder for Finance was:

‘The table sets out a breakdown of how the Council is currently anticipating its grant allocation of £902,370 will be used, based on the financial return to MHCLG in May (which was previously circulated to all Members). This represents the Council’s best projections of income losses/costs over the course of 2020/21, but will be subject to review and refinement as the financial year progresses and the figures crystallise

Since the Executive meeting was held, a further financial return has been submitted to Government on 19 June. An updated table setting out the latest estimated use of the grant funding is shown below, with the May figures shared at the Executive meeting also shown for comparison. Some more detail is also provided beneath:

Estimates of Financial Pressures at June 2020

Pressures/Income Loss
(for more detail on each heading, please see further information below)

Full Year
Estimates at
May (£)

Full Year
Estimates at
June (£)

Total Spent/
Committed to
June (£)

Mitigation against loss of Car Park income 540,675 602,031 394,982
Additional Temporary Accomodation Costs 123,106 123,106 42,106
IT resilience / 24hr Availability costs 102,000 11,155 929
Mitigation against expected loss of Building Control income 51,619 40,172 26,773
Mitigation against expected loss of Planning income 28,125 47,078 47,078
Leaflets to publicise Community Hub 13,412 13,412 0
Mitigation against expected loss of Licensing income 13,108 23,000 8,096
Mitigaton for Leisure Services Income 12,670 12,670 0
Additional Waste Collection Costs 5,000 16,000 5,000
Software related to Business Grants 4,500 4,500 0
Business Grant Admin Costs 3,780 3,780 0
Facebook Advertising Campaign for Business Grants 2,000 2,000 2,000
Emergency Food Parcels 1,000 1,000 0
IT Server Works 1,000 1,000 20
Other 375 1,466 642
Total 902,370 902,370 527,626
  • Mitigation against loss of car park income – this represents the loss of income the Council expects to face as a result of the massive decline in car park usage during the pandemic, which would normally be used to help fund overall council services, and which would otherwise create a gap in the Councils 2020/21 budget.

 

  • Mitigation against expected loss of Building Control/Planning income -this represents the loss of income the Council expects to face, which would normally be used to help fund the cost of providing those services to the public, and which would otherwise create a gap in the Council’s 2020/21 budget

 

  • Additional temporary accommodation costs – this represents the expected additional cost of providing accommodation for homeless families in the district since the start of the pandemic, as mandated by government legislation

 

  • IT resilience/24 Hour availability costs - this represents the cost of enabling staff to work effectively from home during the crisis, to ensure services could be delivered effectively to residents.

 

  • Leaflets to publicise Community Hub – this represents the cost of printing and postage of resident information leaflets to every household in the district to promote the work of the Community Hub at short notice

 

  • Emergency Food Parcels – this represents a contribution for food parcels provided by two food banks within the district

 

  • Additional Waste Collection costs – this represents the cost of additional litter collection during the pandemic

 

  • Business grant related costs – this represent the additional costs to promote and support the Government’s business grants scheme which includes Facebook promotion (£2,000); admin costs including the cost of making swift payments to businesses (£3,780); changes to operating software to record and enable distribution of funding to businesses (£4,500);

 

Background Information

 

On 18th April an open letter from was sent to all Councils from the Secretary of State for Housing, Communities and Local Government. This outlined some of the key areas of work Councils have been carrying out during the Covid 19 pandemic and provided assurance that councils would be provided with the all the necessary resources required to carry out their vital work.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880100/200418_Open_Letter_SoS.pdf

A further letter was sent to Councils by the Director of Finance at the Ministry for Housing, Communities and Local Government on 28th May which stated:

The Government has made £3.2 billion available to support local authorities in meeting the costs of the activities that they have been asked to deliver, including: adult social care; children’s services; public health services; fire and rescue services; waste collection services; shielding the clinically extremely vulnerable people; homelessness and rough sleeping; domestic abuse; supporting the NHS; and managing excess deaths. This funding is un-ringfenced on the basis that councils are best placed to determine the specific needs of their local communities’.