Hertfordshire County Council predicting £17million shortfall due to COVID-19

Hertfordshire County Council is predicting a shortfall of £17million because of coronavirus.
Watch more of our videos on Shots! 
and live on Freeview channel 276
Visit Shots! now

JPI Media's investigation team asked councils responsible social care about finances during the coronavirus pandemic.

They found that councils face increased costs from supporting vulnerable people, while their income from fees and rates is falling.

The Government has already given £3.2bn funding to all councils in England in two tranches to help cover their costs - Hertfordshire Council Council has received £47.88m emergency grant funding to date.

Hertfordshire County CouncilHertfordshire County Council
Hertfordshire County Council

Leaders previously said funding already allocated was "not even close" to covering costs or money that had already been spent.

The total budget shortfall forecasted by local authorities across the UK is at least £3.2bn.

In Hertfordshire, the council expected a shortfall of £17m because of coronavirus - the worst case shortfall per resident was £14.

The county council's Net Revenue Expenditure (2018-19) was £1464.6m.

A spokesperson for the council said: "The financial pressures identified during 2020/21 associated with Covid-19 will be funded initially by the grants received by government, then a review of current expenditure plans will be undertaken, and if a gap remains it will be necessary for a draw down of reserves to take place.

"It should be stressed however, the Council has established Reserves over recent years to absorb, in part, the impact of emergencies such as this."

A final decision on whether there will be a council tax rise will not be made until next year.

A spokesperson added: "Members are currently undertaking a review of the latest forecast of the Council’s medium term financial strategy which will determine the funding gap identified for 2021/22 and consider potential further government funding announcements still to come.

"Council Tax rises will form part of those discussions and forecasts, but no final decision will be made until February 2021."

Hertfordshire County Council's Chief Finance Officer does not feel that an Emergency Budget is required although this will be kept under review as funding received to mitigate the financial impact of the pandemic primarily just covers pressures up to July 2020.

Monthly update reports have been provided to the Cabinet each month since March 2020 which contain details of the financial impacts, these Cabinet papers can be accessed here and searching by the month.

The county council's costs have increased since the last forecast.

Councillor Ralph Sangster, Executive Member for Resources and Performance, said: “The council’s current best estimate of COVID costs is £73.5m, compared to the confirmed grant to the council of £47.9m, meaning there is a shortfall between funding and cost estimate of £25.6m.

“Costs have increased since our last forecast as we have committed to support adult social care providers for an extended period through to the end of September, and due to revised estimates for Home to School Transport for pupils with special educational needs.

"We are also seeing pressures over and above this in our capital programme, most notably in the major infrastructure works to deliver the A120 and A602 improvements.

“We will work with government and our representative bodies to develop a comprehensive plan to support councils over the coming months and years, but we are confident that government ministers are alive to the challenges we face.”

England's Minister for Local Government Simon Clarke MP said: “We’re giving councils an unprecedented package of support, including £3.2 billion non-ringfenced emergency funding, to tackle the pressures they have told us they’re facing.

“This is part of a wider package of support from across government for local communities and businesses – totalling over £27 billion - including grants, business rate relief and for local transport.

“We are working on a comprehensive plan to ensure councils’ financial sustainability over the financial year ahead – we will continue to work closely with them to ensure they are managing their costs and we have a collective understanding of the costs they are facing.”

Any council concerned about their future financial position should contact the Ministry of Housing, Communities and Local Government (MHCLG).

The MHCLG have introduced measures worth nearly £5 billion to ease council’s immediate cashflow pressures and councils have been allowed to defer £2.6 billion in business rates payments, whilst £850 million in social care grants and £1.8 billion of business rates reliefs were paid up-front in a move aimed at helping to ease immediate pressures on council cash flows.