Hartlepool council facing £2million shortfall due to coronavirus crisis
Hartlepool Borough Council bosses outlined how the coronavirus pandemic has had an ‘unprecedented financial impact on councils’, driven by five key factors.
These include increased expenditure, reduced service income, reduced business rates income and reduced council tax income from housing growth, which will be lower than forecast for the next two years.
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Hide AdCouncil chiefs have also seen an increased demand for local council tax support from residents and by the end of June 2020 households eligible for the support had increased by 8% from the pre-Covid level, with further increases expected.
The government has so far provided three tranches of financial support to help councils meet the financial impact of Covid totalling £3.7 billion, plus additional funding for income losses, which is still to be determined.
A report from council director of finance and policy Chris Little notes it is anticipated Hartlepool Borough Council will face a Covid funding deficit of £2.154million.
He said: “The pandemic has had a profound impact on the daily lives of people.
“While the economic and social impacts of the pandemic are significant, the principal impacts are on the health and well-being of those directly and indirectly affected.
“From a financial perspective the pandemic has had a significant negative impact on the financial position of all councils in the current year).
“The pandemic has increased financial uncertainty for councils.
“The Government has provided significant additional grant funding and financial flexibility to support councils.
“However, the pandemic means that councils, including Hartlepool, will be in a significantly weaker financial position than before the pandemic”
To date Hartlepool has received just under £7million from the three tranches of Government funding, after receiving £3.404 million from the first pot of funding, followed by £2.559million from the second and £1.013million from the third.
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Hide AdThe overall cost of Covid-19 on Hartlepool Borough Council is estimated to be £12.245million, which will be addressed for the majority by the government grant funding and further government support announced to tackle income losses.
The estimated £2.154million shortfall comes from costs facing the council’s collection fund, and the deficit can be paid over three years, rather than one, according to council chiefs, but must come from the council’s own resources.
Council chiefs also noted how they have worked with the other North East local authorities to lobby government for additional funding and to provide evidence of the financial issues facing councils.
The report looking at the financial position of the council looking forward to 2023/24 will be discussed at the finance and policy committee meeting on Thursday August 13 from 10am.