Two Suffolk councils are each having to bridge a gap of more than £3million in their budgets as they wrestle with rising costs and substantial income losses as a result of the coronavirus pandemic.
The first public reports from Babergh and Mid Suffolk councils were published ahead of a joint meeting of the cabinet committees this week, in which the first confirmed impacts of the pandemic on the council coffers were unveiled.
At Babergh, the first quarter data (April, May and June 2020) recorded £900,000 in additional spend on Covid-19 measures, coupled with a £2.2m loss in income.
The Government has provided £1.2m in emergency funding, and other savings and underspends have been found without hitting frontline council services, but the authority is still anticipating a need to use £640,000 of reserves to meet the shortfall.
At Mid Suffolk, the Government grants totalled £1.3m, but did not cover the £2.4m lost income and £800,000 in additional costs for the same period.
Savings and underspends there have helped but leaves an estimated £970,000 needing to be drawn from reserves to cover the shortfall at the end of the year.
Babergh council leader John Ward said: “The challenges presented by Covid-19 have resulted in significant unplanned costs and loss of income.”
He added: “Budget savings will help but there is still at the present time an unfound gap of £640,000 which will have to be funded from reserves.”
Mr Ward said that the medium term picture was “more worrying”.
“Further savings will need to be identified and a comprehensive budget challenge commenced last month but unfortunately the impact of Covid-19 is likely to be felt for many years to come,” he added.
Among the additional costs councils faced were providing emergency hotel accommodation for homeless people during lockdown and other response measures, while income to have been severely hit included council tax, business rates, car parks and leisure centres.
John Whitehead, Mid Suffolk’s cabinet member for finances said: “Gradually, the impacts on our council finances are becoming clearer.
“We anticipate a £2.4million effect for the full year, and that’s based on income starting to recover with no further lockdown.”
Mr Whitehead said the council has “a strong reserve position” which was considered to be “sufficient to manage the impact on 20/21”.
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