Covid pandemic sees Calderdale Council facing budget overspend of £15.6m

Cabinet Members will consider the second quarterly revenue monitoring report of the 2020/2021 financial year.

The Council regularly monitors its revenue budget to forecast the cost of delivering services compared to the money available to spend.

The current forecast is for an overall overspend on services of £15.6 million by the end of the financial year. Of this, the estimated impact of COVID-19 is £12.4 million.

However, the financial position has improved since the first revenue monitor in July 2020, when the forecast overspend was £17.7 million.

Councillor Tim Swift, Leader of Calderdale Council, said: “Once again, we are reporting a very challenging financial position.

"The improvements and savings made since summer are promising, and are testament to our talented and enterprising staff.

"However, with further COVID-19 impacts to come, the Council Tax and Business Rates losses and the budget pressures we already faced before the pandemic, the years ahead look extremely difficult.

“We will keep doing everything we can to make savings and will monitor the full impact of the virus on our finances as the situation develops. We will keep innovating and transforming our services as we continue to support our communities. Further government support will be vital to help us do this; otherwise, even tougher decisions will have to be made.”

The council said the financial impact of COVID-19 will be felt for some time

There will be a significant shortfall between additional costs and government funding when losses on Council Tax and Business Rates are taken into account the local authority confirmed.. These losses are currently estimated to be up to £10.6 million.

The government has extended the period over which Council Tax and Business Rates collection fund deficits must be recovered, from one year to three years. This means that the losses will not be felt in the current financial year, but they will in later years.

The revenue monitoring Cabinet report looks at the financial position of each Council directorate.

The areas facing the biggest overspends due to the financial impact of COVID-19 are Public Services (mainly due to lost income from parking and the closure of sports and cultural facilities during lockdown), and Adult Services and Wellbeing due to vital extra support for people most at risk during the pandemic.

The Council’s revenue monitoring report will be discussed at its Cabinet meeting on Monday 9 November 2020. The meeting will be held virtually from 6pm and will be live streamed through the Council’s YouTube channel.