Council Deficit “Unsustainable”
Cllr Chowney Warns Of “Massive Impact” on Services
Hastings Borough Council (HBC) has calculated that its additional costs of dealing with the coronavirus outbreak coupled with losses of income receipts from the collapse of the local economy will result in a hit to its budget of between £2.8m and £6.2m for the current year. This comes on top of a £1.2m deficit already forecast.
At the end of March HBC received £67,268 from central government in a first round of emergency funding to deal with the impact of COVID-19. Last week Robert Jenrick, Secretary of State for Housing, Communities and Local Government, announced a second round aggregate fund of £1.6m to be distributed between local authorities across the country.
Mr Jenrick claimed: “At the beginning of this emergency I told local councils we would give them the resources that they need to do the job. And I meant it.” He called council workers “unsung heroes…They are in the front line of the national effort to keep the public safe and deliver the services people need. Never has this been more important and we are all rightly grateful for everything that they are doing.”
But, although HBC reports that it has been allocated a further £918,693 out of this second round fund, its leaders have issued warnings that the combined allocation is nowhere near sufficient to meet the deficit.
Cllr Kim Forward, leader of the council, said: “We provide many key services such as waste collection, street cleaning, upkeep of parks, housing services and temporary accommodation, planning and environmental health, and there is increasing pressure in all areas. We will continue to press the government for fair funding for our town.
“Along with many other coastal towns our economy depends on tourism, and sadly we are seeing businesses struggling and much higher unemployment, with many more people claiming benefits. We are proud that our council tax reduction scheme still includes 100% discount for those in greatest need, but it means our income will be greatly reduced in this area.”
Cllr Peter Chowney, former leader and currently lead cabinet member for finance and property, said: “Like other councils, we have few opportunities to reduce staffing costs during the current crisis. Council income from car parking, weekly beach chalet lets, and the cliff railways will be hit especially hard.
“We’ve also learned that that the planned review of the way councils are funded is being delayed by another two years, so councils in the most deprived areas, such as Hastings, will continue to be denied the funding they need to meet local needs.”
Referring to the calculations of loss set out above, he warned: “Deficits of this size are not sustainable. If we don’t get further substantial funding from the government, there will be a massive impact on council services.”
Administering Business Grants
One extra task that has fallen on borough councils like HBC is the administration of business support grants. As explained by Steve Brown on our business page (see page 20), businesses eligible for Small Business Rates Relief or Rural Rates Relief have been entitled to receive one-off sums of £10,000 or, in retail, hospitality and leisure sectors, potentially £25,000 – and these funds have been forthcoming, apparently quite promptly, from central government. However, they still take significant council resources to administer.
Last Saturday a further discretionary grants scheme was unveiled, aimed at small businesses with ongoing fixed property-related costs. Local authorities including HBC have been directed to administer this too, prioritising small businesses in shared spaces, regular market traders, some small charity properties, and bed-and-breakfast providers that pay council tax rather than business rates. Any such business that can demonstrate it has seen a significant drop in income due to coronavirus restriction measures is eligible – i.e. just about everyone. Payment amounts should be of either £10,000 or £25,000 as before, but councils will have discretion to make payments of smaller amounts up to £10,000 as well. They are instructed to adapt their approach “to local circumstances”.
The government ministers stated that an aggregate sum of “up to” £617m will be dispensed across the country to fund this top-up scheme. The exact amount to be allocated to each local authority will be announced during the course of this week. How HBC then sets about sharing it out remains to be seen.
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