Mon. Aug 3rd, 2020

Isle of Wight Observer News

The Island's Free Newspaper

Council announces funding shortfall of nearly £10 million due to pandemic

3 min read
Additional expenses incurred by the council, of more than £7 million, include £2.2 million worth of Personal Protective Equipment, £950,000 for workforce pressures in adult social care with the need of additional and agency staffing and £658,559 for temporary mortuary costs.

With the Isle of Wight Council announcing a funding shortfall of nearly £10 million in its finances due to the coronavirus pandemic, we look at a breakdown of the figures — as it looks like there will be no further help from the government.

Before the pandemic started, the Isle of Wight Council laid out its plans for the 2020/21 financial year budget which included £4.5 million savings and was, even then, plagued with uncertainties moving forward like the fair funding review and Island Deal that together the council hoped to bring in another £8.9 million to the Island.

Now with the ongoing crisis, the council has had to be ‘mindful to balance its own fragile but, up to now, improving financial resilience with the emergency needs’ of the Island.

In a report set to go before the Corporate Scrutiny Committee next week, that lays out the ins and outs of the council’s coronavirus action plan, and shows the financial position of the council is ‘serious’ — showing despite government funding of an extra £9.05 million it was not enough and a financial gap, or shortfall, of £9.79 million has arisen.

Additional expenses incurred by the council, of more than £7 million, include £2.2 million worth of Personal Protective Equipment, £950,000 for workforce pressures in adult social care with the need of additional and agency staffing and £658,559 for temporary mortuary costs.

Savings supposed to be made from the 20/21 budget that cannot be made are thought to add £1.1 million to the total expenditure and savings pressure.

However, income that could have been brought in should services have run normally and other resources not been subsidised would have generated more than £10 million for the council.

These include parking charges of £3,167,106, leisure centre income of more than £1.7 million and income from the floating bridge of nearly £363,000.

Miscellaneous fees and charges, including for registrars, land charges, property, school absence fines, and registry services, would have made more than £1.16 million.

Council tax cuts and business rate help has been given to many Islanders who need them, but has left an almost £2.3 million whole in the pocket of the council.

In a press release yesterday, council leader Dave Stewart, said: “The council has to manage the resources it has got.

“We’re not a big authority, but what we do have is a terrific team of staff who have been prepared to go above and beyond, and do what is needed.

“Like councils all over the country, the coronavirus has left us with some big financial challenges.

“This report shows that we are making sensible preparations to face them. I have already raised the council’s financial position in a recent meeting with the Minister for Local Government.

“Our track record of responsible strong financial management has meant that today we are in a far better position to weather this storm than we would have been in the past.

“Our overall objective has been and continues to be to keep people safe — and this will continue to guide our decision making going forward.”

In the report, officers said it ‘remains unclear’ as to whether further funding will be sent from central government but the minister of housing, communities and local government, Robert Jenrick, has ‘made it clear’ councils should not expect the government to meet any shortfall.

In a letter to councils sent at the start of May, the secretary for state said: “We wouldn’t want anybody to labour under false impression that what they are doing will be guaranteed funded by central government.”

The Isle of Wight Council is not allowed to let its reserves fall below £7 million which means the savings the council has which can be put towards the shortfall is only £3.2 million — less than a third needed.

The council’s cabinet is in the process of developing a deficit recovery strategy which will allow the council to continue to operate without the need to consider emergency spending controls or service reductions.

Some spending plans, however, which has previously been approved may be placed ‘on hold’ to use the reserves set aside.