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East Riding of Yorkshire Council Facing Budget Deficit

East Riding of Yorkshire Council Facing Budget Deficit

Published by Local Democracy Reporter Joe Gerrard at 6:14am 17th April 2020.

East Riding Council has been left facing a £4m-a-month deficit following the coronavirus pandemic.

A report published ahead of the council’s cabinet meeting stated available funds currently fall “well short” of closing the gap, even when government relief is taken into account.

East Riding Council would have to change its spending plans if government support fails to cover the shortfall, the report added.

The report stated:

“The most significant impact on the council’s financial position will occur in 2020-21.

Initial estimates show that additional costs and lost income will result in a combined pressure on the General Fund budget of approximately £4m a month in 2020-21.

The financial impact on the council is difficult to predict as the public sector’s response will further develop as the crisis prevails, and the longer term impact on society remains uncertain.”

The report said the effects of the pandemic were already been felt on the council’s capital programme, which includes new building works, refurbishments and other projects.

Some contractors have left sites across the East Riding and many projects could be delayed as the construction industry slows.

Much of the £76m outside funding for capital projects, 42 per cent of total spending, is time limited and could be at risk depending on how long the lockdown lasts.

The report stated:

“If external funding was withdrawn or restricted due to delays, the council would not be in a position to fund the shortfall.”

The council is working with contractors to minimise impacts on projects and create backup plans if funding is cut.

The report stated it was in a good position to deal with funding shortfalls because of its reserves.

But the council would have to monitor the situation because current government funding on offer to local authorities would fall “well short” of closing the gap, the report added.

The pandemic has already seen costs rise by a third of a million pounds on its 2019-20 budget, largely because of IT upgrades to help staff work from home.

The closure of council facilities and venues including leisure centres, tourism sites and the suspension of car parking charges has cost in half a million pounds in lost income.

The schools budget for 2019-20 is also expected to take a hit but the Department for Education is expected to cover those costs.

It comes as the government created a £1.6bn emergency response fund to help plug gaps resulting from the pandemic.

 

 

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