Hartlepool faces £3million funding shortfall as crisis hits coffers - leaders hopeful of further Government cash

A report from Hartlepool Borough Council chiefs estimates they face a £2.906million funding shortfall up to July 2020 because of costs associated with the impact of coronavirus.

The four month forecast up to July states this is made up from £2.174million in Covid-19 related expenditure and £2.737million in income losses due to the pandemic.

Meanwhile it is expected an increase in Local Council Tax Support to residents in need will result in £2million costs for 2020/21 and £1million for 2021/22.

Council chiefs are also expecting a £400,000 income shortfall from other council tax/business rate issues and £558,000 savings will be delayed a year to 2021/22.

The Government has provided two tranches of funding to date for local authorities to help deal with the impact of Covid-19, with Hartlepool receiving allocations of £3.404million and £2.559million, meaning a total of £5.963million.

Chief Executive Gill Alexander, in a report to go before the council Finance and Policy Committee on Monday, states all councils are facing similar positions, with some much worse than Hartlepool.

She said: “As reported to council the pandemic has had a significant financial impact on councils as the sector has faced increased costs and reduction in income.

“All councils have had to make urgent decisions and have adopted similar procedures to those followed by the council.

“The financial impact on the council will continue to be monitored closely.”

Council chiefs had previously warned Hartlepool could face a £6million shortfall of funds over the next two years due to the impact of Covid-19 pressures.

The report adds it is hoped more Government funding may be provided in response to the impact of Covid-19, with the Ministry of Housing, Communities and Local Government asking for a third financial update during the period last week.

In her report, Ms Alexander said: “The Local Government Association is continuing to lobby for additional financial support.

“It is hoped that this return will result in a third tranche of funding, which will provide greater financial certainty for councils.

“However, depending on a range of factors, including the value of a third tranche of funding, the final value of Covid expenditure and income losses, further Government [funding] may be required to support councils.”

The shortfall of almost £3million in Hartlepool up to July 2020 equates to 48% of the grant funding provided so far to the council from Government.

However other councils face greater shortfalls and figures for nine North East councils show an average shortfall of 129%, which includes a higher impact on commercial income.

In Hartlepool 31% of the financial impact from the virus relates to additional expenditure, while 69% relates to income reductions.

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