County Hall reveals combating coronavirus has left it facing £19m shortfall
PUBLISHED: 16:14 30 April 2020 | UPDATED: 16:35 30 April 2020
Norfolk County Council
Fears are growing that services for people in Norfolk could be put at risk, because councils face multi-million pound funding black holes due to coronavirus.
Norfolk’s councils were told this week that they would share an extra £25.8m from a £1.6bn government pot to help their response to the coronavirus in communities.
Local government minister Robert Jenrick described council workers as the “unsung heroes” of the pandemic, for their work supporting vulnerable people.
But Conservative-controlled Norfolk County Council, which has been awarded £43.6m, says it is not enough - and its efforts to respond to COVID-19 have already incurred extra costs and loss of income of 62.7m.
That means it has a funding gap of £19m while the existing £39m shortfall in the council’s medium term budgeting is also likely to rise, as changes the council was intending to make are unlikely to happen to the extent hoped.
Andrew Jamieson, cabinet member for finance, said: “We are doing what it takes to support the public during this pandemic – but there is no doubt we will take a financial hit, due to lost savings, additional costs to services and loss of income.
“We are clearly going to be needed to provide more support to care homes and that is really going to escalate the overall costs.
“We will need to reach out to them more than we had previously estimated.”
He said he was confident the government would provide money to help, but that, in the longer term, more sustainable funding for councils was crucial. If not, significant savings would need to be made.
He said the council has £20m in reserves and stressed: “We are not in the Northamptonshire position.”
Northamptonshire County Council declared itself effectively bankrupt in 2018, after it could not balance its books.
Steve Morphew, leader of the opposition Labour group at County Hall, said: “As ever councils are stepping up, but there are not enough resources for the wonderful people doing a brilliant job.
“We can’t let down our heroes by creating a legacy of their services in tatters, a huge hole in council finances and the risk we would face worse problems if there are future spikes.
“The hit on the council budget from cuts is more than the extra so far given to cope with the huge extra pandemic demands.
“Those cuts can’t be achieved with so much locked down and loss of council income has not been taken into account. The government need to grasp the reality.
“For the past few years government have dithered, delayed and cut, leaving councils wallowing in a financial and social policy vacuum. Now it’s coming home to roost.”
And Liberal Democrat group leader Steffan Aquarone said: “The £20m shortfall in just a few months shows us that the county council’s programme of cuts was short sighted and ill focused.
“Norfolk’s economy was already facing significant challenge from Brexit and the climate emergency, now coronavirus risks making entire swathes of Norfolk’s workforce redundant.
“Norfolk needs vision, ambition and leadership to cope with these challenges and create opportunity and prosperity.
“Norfolk’s economy was already defined by low wages and low business startup rates.
“Whether we sink or swim depends on whether the county council can step up and take the lead in fighting for the interests of Norfolk.”
Meanwhile, the leader of Norwich City Council says the extra £1.4m it received this week, on top of the £105,000 it had preciously got, is just a fraction of the £14m it estimates it will lose in lost income.
Alan Waters, Labour leader at City Hall, said: “Throughout this crisis we have focused on supporting our most vulnerable residents, and continued to deliver essential services, and I’m proud of what we’ve achieved.
“However, providing this additional, vital support to keep our city and its residents afloat has meant higher spending – at a time when we’ve seen a huge drop in our usual income streams.
“Although the full impact of this crisis is still unclear, our initial estimates suggest the loss of income to the council could be up to £14m.
The recent government allocation to Norwich of £1.4m, although welcome, will simply not cover the expenditure and loss of income the council is experiencing as a result of COVID-19.
“Going forward, district councils will be key in driving the social and economic recovery from the pandemic. In order to do this and continue to deliver vital services to local people, the sector urgently needs additional funding.”