County council facing overspend in wake of COVID-19 pandemic
- Credit: Pixabay/No-longer-here
The cost of Herts County Council’s response to the COVID-19 pandemic has reached more than £70 million – with an overspend of £2.79 million at the end of 2020/21 now forecast.
Over the summer months, the county council had been predicting an overspend in excess of £18 million, amid fears government grants would not keep pace with the costs of the pandemic.
But at a meeting of the county council’s resources and performance cabinet panel, councillors were told the council was set to receive a further £14.22m in additional government funding – reducing the predicted gap to £4.2m.
If an underspend of £1.4m across other areas of council work is taken into account, this reduces the forecast overspend to £2.79m, and councillors were told that the shortfall could be met from within the council’s contingency budget, which stands at £9m.
“This is a considerable improvement on the Q1 position that we were reporting, principally because of some additional grant announcements,” said assistant director of finance Steven Pilsworth.
Labour Cllr Sharon Taylor stressed that although the net pressure was £2.7m, there was a COVID-19 pressure of £4.2m that had not been met by the government.
And she pointed out the ‘substantial portion’ of future funding that would rely on a five per cent increase in council tax on ‘our hard-pressed residents’.
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Overall the county council has been allocated £61.6m of ‘non-conditional funding’ to support the pandemic response – and a further £7.17m in compensation for lost fees and charges.
The report does highlight concerns for the medium term finances of the council – pointing to factors that include national and local economies’ attempts to bounce back from recession, the impact of a second wave and further lockdown restrictions, collection and reductions in council tax and a slowing in the delivery of housing development.
Mr Pilsworth also highlighted the financial pressures on major infrastructure projects, such as works to the A602 and the A120, as a result of COVID.
He highlighted pressures estimated £8.5m – but he said it would not be until next year when the extent of the delays and any cost impact would be known.