The full financial impact of the coronavirus pandemic on City of York Council has been outlined in a new report.
Council officers estimate the total cost to the authority could reach £35 million. And even with government support of more than £10 million, that could leave a shortfall of more than £23 million.
The report says the council is not experiencing cash flow problems at the moment. But it adds:
However this could become an area of concern as the year progresses and may require additional controls to be introduced on any discretionary expenditure and could mean that the council would have to concentrate on providing statutory services only.
Losing nearly £1m a month
The report, to the council’s executive meeting on 7 May, says the authority was in ‘good financial health’ before the Covid-19 emergency.
But costs have soared as the council introduced a huge range of measures in response to the crisis. At the same time income has plummeted.
Car parking income has dropped by 96%. The council has also deferred commercial rents, frozen other fees and charges and introduced a licensing fee and building regulations fee holiday.
The report says: “It is estimated that the loss of income to the council is approximately £950k per month, whilst the current restrictions are in place.”
Looking ahead, it states: “Early indications suggest that York (like many places) will be significantly impacted over a prolonged period.
“It is likely that social distancing measures will have to stay in place in some form for the rest of 2020, which will have an impact on the health and wellbeing of York’s residents alongside serious consequences for York’s economy.”
The report says the council is now compiling a Recovery Plan to help York as it emerges from the devastating economic costs of the crisis.
And it finishes on a positive note, saying the emergency has brought out ‘the best of York’:
The city has pulled together to support each other.
Whilst there remains an enormous challenge ahead, the spirit, resilience and kindness shown will stand the city in good stead.
You can read the full report here.
The possible costs
The table below sets out the council’s very early, high level estimates of the likely costs to the end of the current lockdown, should restrictions be lifted.
| Service | 2020/21 – potential costs £m |
|---|---|
| Adult Social Care – additional demand supporting local care providers, additional staffing and equipment, including PPE | 6.8 |
| Children’s Services - additional placements forecast, | 4.1 |
| additional staffing, support to carers and providers | |
| Homelessness - Additional costs for homeless | 0.3 |
| accommodation | |
| Communities - changes to delivery models to support communities remotely, support to providers | 0.4 |
| Waste - additional staffing costs and loss of income | 0.6 |
| Emergency Hardship Fund for small and micro businesses | 1.1 |
| Enhanced YFAS for resident support | 1 |
| Council Tax (assuming 10% reduction) | 8.9 |
| Business Rates (assuming 20% reduction) | 7.7 |
| Loss of income (including parking) | 2.8 |
| Non achievement of approved savings | 0.75 |
| Other, including staffing, ICT equipment, cleaning costs | 0.5 |
| Total | 34.95 |
| Less: | |
| Government support grant | 4.7 |
| YFAS reserve | 0.4 |
| Contingency | 0.5 |
| Share of further Government funding | 5.7 |
| Potential funding gap | 23.65 |