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Council bosses tell of coronavirus impact on finances

By Jordan Reynolds | Dudley | Coronavirus | Published:

Council bosses have spoken out about the impact of coronavirus on their finances.

Wolverhampton Council leader, Councillor Ian Brookfield, has written to Secretary of State for Housing, Communities and Local Government, Robert Jenrick MP, expressing "frustration and disappointment" that the latest award of emergency Government funding was less than expected.

The allocation of £7.3 million was £2.1 million less than what was awarded in the previous funding round which has led to fears that future funding may not cover costs incurred as the impact of the coronavirus crisis is likely to be felt for a long time to come.

Since the lockdown, the council has had to spend on new services, such as the creation of an emergency food hub.

The council also faces a loss of income from various sources, including council tax, business rates and car parks - the full impact of which may not be known for some time.

In his letter, Councillor Brookfield has called on Mr Jenrick to provide assurances that there will be more emergency funding released to the council which reflects additional spend and lost income and that the future funding formula for local government will take into account that Wolverhampton is a deprived city which has been hit harder by coronavirus than more affluent areas.

He wrote: “The City of Wolverhampton Council has responded to the unprecedented challenges we face with decisive and swift action to support vulnerable citizens – doing, as you yourself have said, whatever is necessary to support city people and businesses.

“We believe we have done what’s right, but we know this will create additional cost pressures.

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“Our city is one of the most deprived in the country. It has been hit hard by the virus. Indeed, national figures highlight this unfortunate connection – patients from the poorest communities represent 50 per cent of all critically ill patients with coronavirus.

“So, you can perhaps understand my disappointment and frustration at the announcement that our allocation from the Government’s second wave of emergency funding is £2.1m less than the first round - £7.3m compared to £9.4m.”

Councillor Brookfield has also offered to speak directly to Mr Jenrick to explain the challenges facing a local council on the ground.

Meanwhile Cannock Chase Council’s emergency response to Covid-19 has also seen an impact on its finances.

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Additional monthly costs are estimated to be £140,000 in supporting the vulnerability hub, responding to homelessness issues and supporting its leisure partner. The council’s income is forecast to be down by £210,000 per month.

Lobbying

The council initially received £53,600 of Government support to deal with the emergency however following lobbying by the leader of the council and the MP for Cannock Chase, a further £1 million was received.

Councillor George Adamson, leader of the council said: “The additional funding will cover the impact to the end of June however it is likely that the overall impact for the year is likely to be in excess of £2.2 million.

“We have maintained services wherever possible, however the cost of recovery is likely to be far greater than the additional costs we have borne to date.

"The local economy is fundamental to the wellbeing of residents; the Government has allocated £24 million in business grant payments to the council and we have paid out nearly £19 million in grants to over 1,600 local businesses.

“It is essential that this council starts its recovery plan now and we will be looking for the necessary support from Government to help us kick start this, this but more importantly to provide the resources to sustain this over the coming months and years."

And Councillor Steve Clark, Dudley Council's cabinet member for finance, said: “At this moment in time it is still difficult to be sure of the long-term cost of coronavirus to the council.

"So far, the Government has allocated just over £19 million to the council to support the impact of coronavirus on our day-to-day operations. Our current assessment is that we will need all of this funding to cover additional costs and lost income.

"The full financial impact will depend on the duration of public health measures and the speed of economic recovery.”

Jordan Reynolds

By Jordan Reynolds
Reporter - @jreynolds_star

Senior reporter at the Express & Star.

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