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Coronavirus could cost Sandwell Council £24m

A council is currently estimating the financial impact of coronavirus on this financial year to be more than £24 million.

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But Sandwell Council said they do not know precisely how the pandemic will affect their finances.

The current estimate of the financial impact of the coronavirus pandemic for the financial year is £24.385m and the authority has had £21.578m from government towards that.

Deputy Council Leader, Councillor Wasim Ali, the council's cabinet member for resources and core services, said: "The honest answer is that we don’t know at this point. Obviously we know we have spent - and continue to spend – a lot of money on emergency Covid-19 work that was not in our current budget.

"We want to be as open as possible about this but the truth is that any predictions right now can only be based on a whole range of assumptions - each producing a different set of conclusions.

"For example, it is difficult to know how long the financial impact of the crisis will be felt. Although the Government has set out plans for the continued loosening of the lockdown, it is still difficult to know what this will mean for council services.

"A significant proportion of the financial pressures for the authority relate to a loss of income from sources such as council tax and car parking – we don’t know if, and when, collection rates for such areas will return to normal and what the longer term economic impact will be on these.

"We can say that our current estimate of the financial impact of the coronavirus pandemic for the current financial year is £24.385m and we have had £21.578m from government towards that.

"We are yet to assess the longer-term impact on the council’s Medium Term Financial Strategy and also don’t know whether we can expect any further contributions from government.

"Once we understand this position better, we will then have to decide where we can make necessary savings and where we need to reprioritise and redirect resources as appropriate. We continue to closely monitor all financial demands and resources.

"To put this in perspective, the council’s total expenditure budget for 2020/21 is £249.895m and the majority of this is funded through Business Rates (£99.806m) and Council Tax (£108.257m) income, due to being part of a 100 per cent Business Rates Retention pilot. This makes us particularly vulnerable to reductions in income collection rates."

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