Cherwell faces massive cuts to balance books amid £4.5 coronavirus-era 'overspend'

Bodicote House which could become redundant if Cherwell District Council is absorbed into a new, large unitary authority

And in the post-coronavirus financial struggles Cherwell District Council itself may be obliterated in favour of a 'unitary authority' for Oxfordshire - a solution favoured by Boris Johnson's government.

The council's coffers are missing £4.5m because of a reduction in income and insufficient compensation it believed it would get from central government to cover expenses for the Covid-19 crisis. Councillors are being briefed this evening (Tuesday) on options for where cuts could land.

Loss of income includes parking (£1m), planning applications (£674k), markets, fairs and bus station fees and agency fees to cover sickness (£220k), loss of land fees due to declining house sales (£150k), housing spending on temporary lockdown accommodation (£200k), sports facilities and holiday hubs (£600k) and commercial rents (£2.3m).

The council has received £134k from the European Regional Development Fund to help reopen high streets and retail spaces. It is waiting for details of grants to supply safe homes for the vulnerable and keep rough sleepers off the streets.

In other areas, such as Luton, cash-strapped councils have had to cut back on all areas of spending, from jobs to street lighting and from green waste collection to grants and youth support.

Cherwell knew it would have a big deficit without help from the Treasury and in May, Labour leader Cllr Sean Woodcock prophesied betrayal of the district by the Government over promises that councils would not lose out over managing the Covid-19 emergency.

At the time he said: "Council staff have been on the front-line in delivering support to people in this crisis. They were told to house rough sleepers. They did it. They were told to loosen charging at car parks. They did it. They were told to close leisure centres. They did it. Markets closed. Shopping centres wound down so that everyone could abide government guidance on social distancing."

Mr Woodcock predicted without help, councils would go bust or have to rein in local services.

The council will receive up to 75 per cent of the looming deficit from central government after exceeding a 5 per cent threshold - but local services are set to be seriously affected. It is expected some jobs at Bodicote House will go or vacancies left unfilled. The cuts will be introduced within the next two months, it is understood.

Some local politicians believe Cherwell and other district councils will not exist within ten years with buildings such as Bodicote House redundant, saving millions.

The government's recent statement on an autumn white paper on devolution said it wishes to see more mayors and more unitary councils 'the populations of which... are expected to be substantially in excess of 300k-400k'.

This is likely to mean Oxfordshire's five district councils would either be abolished in favour of a single council or there might be a 'doughnut' with Oxford City in the centre and a single council for the remaining districts. Cherwell has already merged with Oxfordshire County Council which is struggling with its own financial problems.

A motion by OCC leader Cllr Ian Hudspeth to delay county council four-yearly elections from next year to 2022 was withdrawn. But it gave strength to the prospect of a move to a single, large authority in place of the current five, plus the county, within the next few years. Another persuading factor is that Oxfordshire is the only part of the 'OxCam arc' - the development region between Oxford and Cambridge - that is not already a unitary authority.

A Cherwell spokesman said: "All councils in England are currently working out how to deal with shortfalls in funding in relation to COVID-19. Each of them will be coming up with plans in coming weeks on how that should be managed during the remainder of 2020/21.

“Meanwhile the Government is publishing a White Paper on devolution and local recovery in the autumn. Council leaders in Oxfordshire and elsewhere are interested to discover what the Government will propose. It is clearly some weeks before the detail... is made public and speculation is premature.”