Council determined to rise to financial challenges caused by COVID-19

Money

The coronavirus crisis is putting the finances of all councils under enormous pressure as they keep critical frontline services running.

The coronavirus crisis is putting the finances of all councils under enormous pressure as they keep critical frontline services running.

They have also set up brand new ones like the community hubs that are helping thousands of vulnerable people receive food and medicines.

In Canterbury, the city council has been hit by:

  • A dramatic fall in parking income which normally makes up £9 million of the council’s total revenue
  • A fall in property rents which normally account for £14.1 million of revenue
  • The closure of venues like the King’s Hall and the cancellation of events
  • Large increases in spending on areas like the incredibly important work of housing rough sleepers and getting the community hub up and running
  • A likely fall in the amount of council tax we collect and an understandable increase in the number of people who need help with paying it
  • A fall in income in a range of other areas

The difficulty for all councils in assessing their finances and working out what the gap in the budget will be in the months and years ahead is that nobody knows when the lockdown will come to an end, just how those restrictions will be lifted and in what order.

Council Leader Cllr Robert Thomas said: “Over the years, councils have had to find new sources of income to support a wide range of services because government funding has almost completely disappeared and council tax increases are capped.

“When things like car park revenues, property rents and people's ability to pay their council tax are all hit at the same time, it is a huge challenge and no-one knows how long this crisis will last.

“But councils are well used to making council taxpayers' money go further than ever before and will already be looking at ways of becoming more efficient while serving residents at their time of need and preparing to get their districts/the county back on its feet.

"So far, we have received £82,500 from the government with a further £1.6 million allocated to us, but the increased costs from supporting our community through this crisis, together with the significant drop in income seen up to now, will comfortably exceed this total of nearly £1.7 million. The money is a welcome contribution, but a large gap will remain.

“The government has said that councils will get the resources they need to cope with this pandemic and they are going to have to deliver on that promise. Councillors and officers will continue to make our voices heard in Whitehall.”

Council officers have already begun looking at ways of plugging the budget gap with a view to presenting an emergency budget for councillors to discuss and decide upon in the coming weeks.

Among the proposals being explored and to be decided on by councillors are:

  • Looking very closely at the council’s ambitious capital programme - money used to invest in buildings and infrastructure - to reduce potential borrowing costs and protect cashflow
  • Cutting spending in every council department and managing the consequences on the levels of service we can provide
  • Putting a hold on filling job vacancies
  • Leaving some of the services we have currently suspended closed for a little longer
  • Working out how much of the council’s reserves, the money it puts away for a rainy day, should be used to plug any gap with the certainty that there will be rainy days in the future

Deputy Chief Executive Tricia Marshall said: “In recent years, Canterbury has been very good at finding innovative ways of reducing costs and generating income to ease the burden of providing services on our council taxpayers. In the past four years we have managed to save over £6 million from our budget in this way.

“Post-lockdown, generating income will be far more difficult as nobody knows how quickly the economy will recover or what it will look like when it does.

“It is going to be incredibly challenging but I am certain we - councillors, officers and everyone we serve - can rise to that challenge.”

As well as getting the council back on course, officers and councillors will be looking at ways to protect prosperity in the district and take advantage of any new opportunities presented to it.

Chief Executive Colin Carmichael said: “At some point soon, the lockdown measures will start to be eased, and we are already thinking about our role in the recovery phase of this crisis. 

“This will involve working with everybody with a stake in the district’s future, from businesses, universities and colleges, through to community groups, voluntary organisations and the tourism bodies.

“Yes, money will undoubtedly be very tight, but we have every confidence in the district’s ability to overcome this pandemic and look forward to a bright, positive future."

Published: 27th April 2020