Although it is predicted that these extra costs will slowly start to reduce to around £7 million over the coming months, by the end of the financial year our funding shortfall could be close to £45 million.
However, our Cabinet heard this week (Thursday 30 July) that we remain in a financially stable position in 2020 to 2021.
The £45m funding shortfall takes account of the money received from Government to date, however a further sum of £4m is expected in relation to the Government’s income guarantee.
The costs of the coronavirus are closely monitored and updated to reflect the latest information and legislation.
As this is frequently changing, some of the expenses we estimated earlier in the pandemic are now less than predicted including the cost of `home to school’ transport from September 2020.
Initially, due to the guidance relating to social distancing on school buses, we expected the cost of home to school transport from September 2020 to March 2021 to be as high as £17 million, but this looks likely to be reduced to half that amount.
To date, we have received £42 million of non-ring-fenced COVID-19 funding from Government to support the increased costs, but with the £10 million per month costs, this funding will be used in the next few weeks. In addition to the non-ring-fenced funding, extra money has been provided by Government for specific initiatives to support care homes and the test and trace programme.
The rate of collection of council tax and business rates will be lower than previous years due to COVID-19 affecting household incomes, with the impact of this on our budget not being realised until the next financial year. However, it is hoped that the Government will provide a support package to address this, although the details will not be known until the spending review is announced later this year.
As well as working to balance the books and cover the extra costs and loss of income, we are working on plans to help the local economy recover.
Our Council leader Councillor Barry Lewis recently announced a £15 million economic recovery fund to support Derbyshire’s communities and businesses to recover from the effects of coronavirus, with its focus being on creating jobs and growth, supporting the green economy and entrepreneurs and business diversification, as well as apprenticeships and training for young people.
Councillor Lewis said:
“The council is currently financially stable, with a robust level of reserves, and the good news is that the extra costs to us due to coronavirus are already reducing and are likely to be lower than predicted.
“As well as dealing with the pandemic and all it has thrown at us, the council still faces the pressures it faced before the outbreak, including increased pressures on children’s services and a rising ageing population, as well as unforeseen emergencies including the Toddbrook Reservoir incident this time last year and two major storms which brought devastating floods to the county.
“As well as for COVID-19 costs, we are continuing to lobby government for support to help us cover the £20 million costs for road maintenance following the two separate flooding events and the damage they caused to the county’s infrastructure.
“Due to the extra funding from government so far towards COVID-19 costs the council remains in a financially sustainable position but we will continue to press for additional government support which we will need over the coming months, and into the future, especially as we face reductions in council tax income over the next few years and work to meet our savings targets.”