New Forest District Council losing £1m per month during coronavirus lockdown

NEW Forest District Council is losing more than £1m of income a month amid the coronavirus crisis, it has been revealed, with government support described as “absolutely minimal”.

A £3m general reserve in place to cover its budget for 2020/21 is also set to be

eaten up by the end of June, amid uncertainty as to whether the government will offer long-term financial help.

A report to the ruling cabinet next Wednesday details the lockdown is costing NFDC £600,000 of monthly income from its leisure centres, £200,000 from pay-and-display parking, and £86,000 generated by waste collection.

It is also not receiving £50,000 from planning services, £45,000 of treasury management investments, £32,000 from its coastal amenities, £28,000 through lost housing rent and £12,000 from Dibden Golf Centre.

NFDC is facing one-off costs, with Milford's South Lawn Hotel being used to accommodate 16 homeless people at an anticipated monthly gross cost of £70,000.

Pledging support for foodbanks and establishing a shielding hub will cost NFDC £25,000, and distributing coronavirus information £10,000. Staff were being paid in full, it added.

The report continued: “At the current run-rate, the £3m general fund reserve will be fully utilised by the end of June.

“At this point other council reserves (Capital Programme Reserve) will be required to support the general fund to bridge the funding gap arising as a result of the loss in income and new expenditure pressures.”

Outlining the situation, the report said: “The council will rely on additional funding support being forthcoming from central government to assist in dealing with the new cost pressures and income losses it is currently experiencing as a result of Covid-19.

“The Covid-19 response measures introduced by the government since the middle of March have had a significant implication to this council’s finances and has also required a necessary reprioritisation of service delivery.

“The council has had to adapt and respond to new government directives and new legislation, and has had a key role in the financial administration of significant sums of money in order to support businesses within the New Forest.”

It noted the government had supported local authorities with its immediate cashflow, but said “further clarification” was awaited on additional financial support.

“Various verbal comments have been made by government ministers and cabinet members on ‘local government being looked after’, but more recently comments have been amended to ‘the sector must share the burden’,” the report said.

“As of yet, the share of support funding to district councils has been absolutely minimal and insufficient to meet new cost pressures, let alone beginning to offset the income losses being realised.”

In March, the government announced an emergency financial support package to the public sector worth £2.9bn, with £1.3bn directed to the NHS and £1.6bn to local authorities.

But the vast majority of the latter figure was targeted at social care due to the need to free up hospital space. So NFDC actually got just over £70,000 – which has already been used up.

While a “second tranche” of local authority funding has been confirmed by the government, it is not yet known how that will be distributed.

In terms of the help to its cashflow, NFDC received £886,000 of hardship funding to offer some residents council tax reductions, while the government has allowed it to defer monthly business rate retention payments – worth £5.3m – for 12 weeks.

The council has furloughed its leisure centre staff. If it receives a reimbursement of the lost income through a government grant, it will not make a furlough claim.