North Herts forecasts at least £2.6m in coronavirus losses
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Plans to increase council tax are already being considered, as forecasts estimate the cost of COVID-19 exceeding £2.6 million for North Herts District Council.
Loss of income from parking, museums, planning applications and extra costs for waste collection and homelessness means NHDC could face huge monetary pressures this financial year – and additional funding from central government hasn’t fully covered the shortfall.
Among the biggest hits are the predicted £1.37 million loss in parking revenue and the estimated £300,000 to £550,000 extra costs in waste collection services.
As things stand, there are no plans for staff redundancies at the district council or for councillors to set an emergency budget.
Cllr Ian Albert, NHDC’s executive member for finance said: “We are continuing to operate our services as normally as we can under the current circumstances, thanks to the efforts of our staff and contractors.
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“We welcome the additional funding received from government and the announcement of support for some of our lost income, but residents might reasonably ask why the government doesn’t simply deliver on its previous promise of fully supporting local authorities through the pandemic.
“Even with this funding, we are still faced with a shortfall of over £1m in this financial year. But that is only the current forecast. This could increase if there is a second wave or localised outbreak.
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In total, the council is predicting “income pressures” of between £4.7m and £5.2m for 2020/21.
So far, the government has provided two general grants to NHDC, totaling £1,372,000.
Despite these income pressures, the recommendation put to council is that it uses its financial reserves – which was more than £10m on March, 31 – to cover costs.
But, council tax rises could still be on the cards to help offset the financial hit of COVID–19.
Cllr Albert added: “We want much greater clarity on the future funding of local authorities like North Herts. This would mean that we could effectively plan to support our residents and help our local economy towards a full recovery.
“After years of cuts in Government funding and forecasts of yet more cuts to come, our current financial strategy, even before the stresses caused by the pandemic, already recommends that council tax is increased.
“It is too early to say what the increase in council tax will be next year. The final decision on this will be taken by the council next February.
“But we recognise that local people have been hit hard by this pandemic. They need the vital services provided by this council.
“Therefore, we hope that the government accepts that it cannot expect our communities to bear the brunt of continued funding shortfalls.”