Covid-19 cost to council could reach £300,000 a week

Photo of Councillor Stephen Holt
Cabinet councillors today (June 3) heard that a "perfect storm" is on the horizon for council finances due to Covid-19 and significant government support is needed to shore up losses caused by the pandemic.

In line with many local authorities across the country, Eastbourne Borough Council's spending has increased because of the coronavirus crisis, planned savings are not being achieved and income could fall.

The council estimates that additional costs, including delayed savings programmes, arising from Covid-19 could be as high as £300,000 per week, should the lockdown continue and result in a long-term economic downturn.

Councillor Stephen Holt, Cabinet Member for Financial Services, said: "The government initially promised us financial back-up for the range of initiatives we implemented in our Covid-19 response to support vulnerable people and our local economy, but the money allocated so far has been woefully inadequate to cover these.

"In addition to massive extra costs, our income is set to drop due to the pandemic. This situation is almost a perfect storm for our finances."

The council no longer receives an annual grant from government and the cost of its services are mostly met through fees and income from council tax and local share of the business rates. These incomes are likely to drop significantly due to the pandemic.

The council is receiving emergency funding of £1.09million from the government to cope with coronavirus - £64,000 in the first round and £1.03million in the second.

Councillor Holt added: "Our finance team are working diligently to predict the full impact of Covid-19 on our finances. However,  like everyone, we simply do not know how long the pandemic will last and therefore ongoing impact on our long term financial plans.

"We continue to emphatically call on government for further financial support to offset the costs related to Covid-19 crisis as they originally promised. In the meantime we will continue to do whatever is necessary to protect our residents."

Cabinet councillors approved the use of council reserves for the continuation of essential services and to mitigate the impact of the Covid-19 emergency on residents.