Coronavirus: Stark financial warning issued by Peterborough City Council

The already cash-strapped authority said it has identified “significant additional costs” of £18.3 million linked to the pandemic, compared to £11 million of funding it has received from the Government.

Worryingly, the council is expecting to head into the 2021/22 financial year with just £6.6 million in usable reserves, while it is already predicting a deficit of £14.5 million.

It said it has £6.8 million of commercial income and £4.5 million of planned savings in the current financial year which are at risk.

The council had previously committed to undergoing a huge overview of the services it runs after warning that huge cuts to its government funding over the past decade has left it short of funds.

That review has now been delayed, although the council said it has formed a group to assess how quickly the different phases of recovery from Covid-19 can take place.

The Government is currently assisting with payments for adult services and to house rough sleepers, while it is also allowing councils to defer payments of business rates.

According to the Local Government Chronicle Communities Secretary Robert Jenrick said on Wednesday “we will stand behind (council leaders) and ensure they have the resources that they need to carry out the absolutely critical functions that they are playing in our national response to the coronavirus”.

However, he is said to have added: “Councils are receiving more money so far than they have reported to us as needed to meet the Covid-related costs they are bearing.”

The city council has increased its adult social care funding by 10 per cent during the crisis (an extra £2.5 million) and is also running a local co-ordination hub to support vulnerable residents.

Staff have also been redeployed rather than furloughed to provide support to essential services.

Additional costs at the current time include an extra spending of £300,000 on a temporary mortuary and £200,000 on PPE (personal protective equipment), while a number of planned savings will now be lost.

This includes renting out additional space at the council’s Sand Martin House offices and expected lost parking income of £1 million.

A further concern is the non-payment of council tax with the authority expecting overall takings to be 10 per cent down over the financial year (a loss of £9.1 million) with a further 10 per cent deferred.

The council said: “The reduction/deferment could be potentially significant and affect all collection authorities. It is an area where lobbying of Central Government is required – once we know the reductions in collection rates.”

The financial situation will be debated by the council’s Conservative-run cabinet on Monday. It will be the first virtual meeting held on Zoom by the authority, with members of the public able to listen in from 2pm or catch up later.

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