Coronavirus ‘wreaking havoc’ with council finances, says leader
- Credit: Charlotte Bond
In July, we agreed an emergency budget for Ipswich Borough Council to start tackling the predicted deficit in the Council’s finances caused by coronavirus.
Back then, we were forecasting a £10million hit from a combination of extra costs and falls in income.
Although the government said at the start of the crisis that they would fully compensate councils, they soon went back on that promise - so we have had to address the resultant shortfall by a combination of using all our reserves and service cuts.
Although many individual cost items have changed since July, our prediction of the overall cost of coronavirus this financial year was broadly correct.
However, we are now looking at what future years will hold.
In July, we thought that the financial effects of the virus would be over by April 2021.
That was a reasonable assumption then, but it is now clear that coronavirus will be wreaking havoc with the council’s finances well into next year.
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Major income streams from car parks, sports centres and theatres were all well down even before the current lockdown and, even if we go back to Tier 1 afterwards, they won’t recover while these restrictions are in place.
Before the lockdown was announced, we were forecasting that the council will see a net reduction in income of £5m next year. It may be even more now.
There are no reserves left to cover this. We do expect more help from the government, but it won’t be anywhere near enough to cover the full gap.
So, we are having to look at another round of savings.
These focus on making efficiency savings by having fewer staff and going with the grain of recent trends of people using the phone and internet to contact us by reducing face to face contact.
We will also reduce the amount of grass cutting and stop annual planting.
We must act now. As Boris Johnson has discovered with the virus, the longer you put off making the difficult decisions, the more drastic the action you will eventually have to take.
If we dither and delay, vital services that we all rely on will be forced to suffer even bigger cuts.