THE CORONAVIRUS could leave the council facing a financial shortfall of approximately £10 million.
Cllr John Halsall, leader of the borough council told Wokingham.Today the costs of supporting residents through lockdown are not being reimbursed by the Government.
He said: “The Government has put the obligations on councils, but that’s got costs.
“We’ve been looking after more than 5,000 adults during the pandemic. And although we’re not directly responsible for schools, we’re responsible for getting kids to school.
“And at the moment buses have to have 15 children in, not the usual 50. So that means paying for more buses.”
He added: “We’ve got a shortfall of £15 to £20 million and we’re only getting half of that from the Government. I don’t know where the other half will come from.
“If our revenue streams are curtailed, we won’t be able to support the costs we have. A council can’t go bust unless the nation goes bust.
“There are certain rules and procedures in place and one is that the general fund must be in balance. At the start of the pandemic, our reserves were about £10 million. To put that into perspective, we turn over £12.5 million every month in the general fund.
“In the pandemic, the Government has not reimbursed all costs as promised. Instead they’re using a formualica approach based on deprivation. And in the two rounds of funding, we have been at the bottom of the list.
“But covid doesn’t look for deprivation, it looks for age. When looking at our excess deaths, we’re average in the country, but we’re not average for allocated funding.
“And the Government has said that local authorities cannot issue a 114 notice — which means you’re bankrupt — during the pandemic.
“But we’re not at that point yet.”
And the Local Government Association (LGA) is calling on the Government to help councils meet the extra income losses.
Cllr James Jamieson, chairman of the LGA said: “Councils continue to work all day and night to protect the most vulnerable from Covid-19, support local businesses and try and keep normal services running.
“This package offers some positive measures and recognises the pressures councils are facing, but more is desperately needed to fully address the severe financial challenges facing councils and our local services as a result.
“The Government’s commitment to fund a portion of councils lost income from fees and charges is a step in the right direction.
“However, this does not cover the full losses, nor does it extend to commercial and other income losses and is likely to still leave councils having to absorb a substantial and unforeseen loss of funding, in particular the loss of local taxes.
“We reiterate our call to Government to meet all extra cost pressures and income losses from fees and charges and other sources, including commercial activity, in full if councils are to avoid having to make tough decisions on in-year cuts to services to meet their legal duty to set a balanced budget this year.
“Allowing councils to spread tax deficits over three years will help but needs to go together with appropriate measures to manage any cash flow implications.
“We are pleased with the commitment to find a solution to the loss of local taxes in the Spending Review. In order to have the certainty they need to set budgets for next year, councils still need urgent clarity on the irrecoverable losses the Government has positively said it will pick up. This will need to cover all losses from local taxes.
“The further £500 million extra funding to help councils meet extra Covid-19 costs pressures is helpful but, in the context of the funding gap councils still face, substantial additional funding will be needed and we await further details on how this money will be distributed.
“Councils have been completing detailed monthly returns to the Ministry of Housing, Communities and Local Government on the financial challenges they face.
“This shows the Government is committed to fully understanding the impact the pandemic and the robust evidence provided by councils shows a looming financial crisis that cannot be ignored. Councils and the LGA want to continue working with Government on the further measures and funding needed to protect local services.”
