Coronavirus could cause £11 million black hole at West Midlands Combined Authority
Coronavirus could lead to the West Midlands Combined Authority facing a financial black hole of more than £11 million, a report has said.
Figures from the authority, chaired by Mayor Andy Street and made up of councils across the region, show finances have taken a blow primarily due to transport income falling as a result of the Covid-19 restrictions.
Transport is one of the key functions of the devolved authority, with its Transport for West Midlands arm overseeing the region's transport infrastructure.
It owns and operates the West Midlands Metro, co-manages local railway services alongside the West Midlands Railway franchise and works closely with bus operators to improve bus services in the region.
Chiefs have said the financial black hole in the 2020/2021 budget was "not unexpected" and stressed the Government had provided some funding to offset the losses.
But the report warned the funding gap could potentially rise to £31.4m over the next six years – with Cabinet ministers set to be lobbied for further funding.
Transport income will continue to be impacted for some months but at a "gradually" lower level as lockdown restrictions ease, it added.
Recruitment and staffing levels will be reviewed as a result of the pandemic but no jobs will be lost, WMCA bosses have confirmed.
A spokesman for the West Midlands Combined Authority said: "We are continuing to deliver everything we always have alongside a significant capital investment programme – creating the infrastructure the region needs and supporting the economic recovery.
"A projected deficit of this level is not unexpected following the Covid-19 lockdown, and most of this has resulted from running transport services at a time when fare income has dramatically reduced.
"The Government has already provided some funding to offset these losses. There are no plans to reduce staff, although vacancies and new roles are under review.
"Many organisations are facing similar issues. We are now working with other combined authorities in seeking further government support to enable us to achieve our ambition of building a healthier, happier, better connected and more prosperous West Midlands."
Spending will also be reviewed and reserves could potentially be used to help tackle the deficit.
The Government has given local and devolved authorities more than £3 billion in support during the pandemic, but councils across the Black Country have warned that government funding has failed to make up for the shortfall caused by coronavirus.
Wolverhampton Council said earlier this week that services may have to be cut as a result of a £3 million funding gap caused by the cost of fighting the disease and the loss of income during lockdown.
