Council calls for ‘greater clarity’ over funding to meet gap of up to £5.4m caused by coronavirus

A debate has occurred over who should take responsibility for millions of pounds worth of lost income and extra costs incurred by a local authority during the coronavirus crisis.

Flintshire Council is facing an estimated financial risk of up to £5.4m during the current fiscal year because of the COVID-19 pandemic.

Public bodies across Wales have encountered added pressures as a result of having to pump more money into social care, as well as buying Personal Protective Equipment for staff and bringing homeless people in off the street.

Officials said the council had also missed out on approximately £3m in income between March and June when lockdown restrictions were firmly in place. meaning many revenue generating services were shut down.

However, while the Welsh Government has set aside a hardship fund to cover some of the additional pressures, it has indicated the authority may only receive two thirds of its claim for lost income.

It would mean an extra £1m gap would have to be bridged before risks to arm’s-length service operators, including Theatre Clwyd and Aura Leisure, are taken into account.

Cllr Glyn Banks, cabinet member for finance, said the ruling Labour administration should urge ministers in Cardiff to provide greater clarity over how the shortfall will be met.

Speaking at a virtual meeting of leading councillors yesterday, he said: “It’s really important for us to get the message across about making a formal request to the Welsh Government.

“We don’t want to seem as though we’re bashing the Welsh Government because we’re not.

“There is some tremendous work they’ve done with businesses and the economy over the last few months and it’s been marvellous how they’ve got money out.

“But moving forward we do need greater clarification around all the consequentials and their deployment.

“We need greater assurances for in-year pressures as well.”

To date there have been three significant announcements to meet the financial impacts of the emergency situation for local authorities in Wales.

One fund worth £30m has been set up to cover general costs, including support for the homeless, along with £40m to pay for free school meals up until the end of August.

Meanwhile, an additional £40m was set aside to deal with other amounts incurred by councils.

Although it’s been claimed the £78m earmarked to cover lost income will not meet the requirements of all 22 authorities, council leader Ian Roberts said Flintshire would also need to cut its own cloth instead of relying on the Welsh Government.

“It’s all very well and good us asking the Welsh Government but what are we doing internally?

“Can I ask for examples of what we’re doing to reduce these cost pressures.

“I’m aware of some like car parking charges that there’s nothing we can do about it until we can reinstate, but what are we doing about some of the pressures that have emerged here?”

He later added: “We have to be aware at the end of this that some people are really hurting financially.

“Some people may lose their jobs and as a council we cannot just go on spending.”

His comments lead to an impassioned defence of the council’s financial performance by its chief executive Colin Everett.

He said the shortfall was of a size the authority could not absorb itself and placed the responsibility for covering it directly at the door of both the UK and Welsh Governments.

He said “I’m sorry if it sounds like I’m disagreeing with you, but it is government’s responsibility to fund the public sector through this crisis.

“The public sector has received a minority of the consequentials from the UK Government.

“We fully understand why the economy has been so heavily supported, but if you think that Flintshire alone has paid out £45m of government supported grants and rate relief to businesses.

“Then you look at how much Flintshire County Council is receiving for its cost pressures; we’re doing remarkable things to protect vulnerable people.”

He added: “These are figures beyond the scale that we can cope with.

“Governments can’t have it both ways – it’s the public sector that bails them out in a crisis as part of the welfare state and aren’t funded properly to do so.”

His remarks were supported by the council’s deputy leader Carolyn Thomas, who said there was a lack of understanding over how the crisis had impacted funds.

At the end of the debate, cabinet members backed a recommendation to request for the UK Government to devolve sufficient funding to the Welsh Government to enable it to cover the financial requirements of local authorities.

Liam Randall – Local Democracy Reporter (more here).