County council facing overspend in wake of COVID-19 pandemic
- Credit: Pixabay/No-longer-here
The cost of Herts County Council’s response to the COVID-19 pandemic has reached more than £70 million – with an overspend of £2.79 million at the end of 2020/21 now forecast.
Over the summer months, the county council had been predicting an overspend in excess of £18 million, amid fears government grants would not keep pace with the costs of the pandemic.
But at a meeting of the county council’s resources and performance cabinet panel, councillors were told the council was set to receive a further £14.22m in additional government funding – reducing the predicted gap to £4.2m.
If an underspend of £1.4m across other areas of council work is taken into account, this reduces the forecast overspend to £2.79m, and councillors were told that the shortfall could be met from within the council’s contingency budget, which stands at £9m.
“This is a considerable improvement on the Q1 position that we were reporting, principally because of some additional grant announcements,” said assistant director of finance Steven Pilsworth.
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Labour Cllr Sharon Taylor stressed that although the net pressure was £2.7m, there was a COVID-19 pressure of £4.2m that had not been met by the government.
And she pointed out the ‘substantial portion’ of future funding that would rely on a five per cent increase in council tax on ‘our hard-pressed residents’.
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Overall the county council has been allocated £61.6m of ‘non-conditional funding’ to support the pandemic response – and a further £7.17m in compensation for lost fees and charges.
The report does highlight concerns for the medium term finances of the council – pointing to factors that include national and local economies’ attempts to bounce back from recession, the impact of a second wave and further lockdown restrictions, collection and reductions in council tax and a slowing in the delivery of housing development.
Mr Pilsworth also highlighted the financial pressures on major infrastructure projects, such as works to the A602 and the A120, as a result of COVID.
He highlighted pressures estimated £8.5m – but he said it would not be until next year when the extent of the delays and any cost impact would be known.