Flintshire Council predicts budget shortfall could almost triple up to £27m next year due to coronavirus pandemic

A local authority has predicted its budget shortfall could almost triple up to £27m next year in light of the coronavirus pandemic.
In February, Flintshire Council estimated it would face cost pressures of £9.8m for the 2021/22 financial year.
However, following a review which took into account the impact of the Covid-19 crisis, officials now believe that anywhere between £14.4m to £27.3m could be needed to plug the budget gap.
Since March, authorities across Wales have incurred extra costs after stepping in to provide emergency support for vulnerable people, while losing some income from sources such as council tax and car parking.
Senior councillors and officers said central government intervention was needed to address the significant financial impact of the pandemic.
Flintshire’s cabinet member for finance, Cllr Glyn Banks, said: “The emergency situation continues to have a significant impact on the council’s cost base and its ability to generate income.
“The Welsh Government has made a number of funding announcements which have given some certainty as to how these additional costs and income losses can be recouped in the current financial year.
“The UK Government has announced that the autumn budget has been postponed which, in turn, impacts the Welsh Government budget.
“However, we do expect that there will still be some form of a UK Spending Review on a date to be announced.
“We are facing unprecedented challenges this year and the council has really limited efficiency options left after years of financial austerity.”
In a recent publication, Audit Wales said an additional £500m of Welsh Government funding had been provided to mitigate the costs.
But auditors said there may still be a “significant funding shortfall” for local authorities in the future.
A report going to Flintshire cabinet members next week highlights that council tax income is currently well below average, with an increase in people eligible for a discount under the Council Tax Reduction scheme.
Meanwhile, footfall across markets run by the authority in the county is reported to have dropped.
The council’s chief executive Colin Everett said there were three options for addressing the shortfall, including government funding, local taxation and service cuts, but insisted only the first one was viable.
He said: “Our funding strategy is highly dependent on enough national funding for local councils.
“We receive our largest amount of funding from the Welsh Government.
“For the council to be sustainable, future settlements will need to reflect the national financial pressures that are outside of our control, for example, pay awards.
“There are no local budget choices presented at this stage. There are no efficiencies of scale remaining and the position has not changed since we set the last annual budget.
“The need for safe and resilient services has been highlighted by the response to the emergency situation.”
The latest forecast position will be discussed at a meeting of the council’s ruling Labour cabinet on Tuesday (October 20, 2020).

Liam Randall – Local Democracy Reporter (more here).