A £3.1m shortfall in Covid-19 recompense leaves councillors with a huge financial problem

A report by financial officers to this evening's (Tuesday) Cherwell District Council executive meeting say government grants towards the huge costs of lockdown have been 'nowhere near enough' and the council is £3.1m out of pocket.

Without extra government help the shortfall have prompted 'transitional' planning to minimise the impact of the damage but it is going to mean a re-think about agreed financial plans.

And to add to the council's problems, it is having to take into account the prospect of new lockdowns - local, regional or national - if the virus returns in force.

"Lockdown has eased and services are being reopened but the risk of a further outbreak remains high," the urgent business information report says.

"The long-term impacts of the pandemic are not yet known or understood in full. There will be health (both physical and mental) impacts, particularly affecting those who are most vulnerable.

"The inevitable economic impacts of the lock down will impact on local business, our town centres, rural enterprises and workers across the county and district. We do not yet know the impacts on young people in terms of educational attainment and well-being, nor the wider social and cultural consequences of a post-pandemic society."

The report talks about 'refreshing' the medium-term financial plan and savings target; renewing the council's corporate plan and undertaking consultation and impact assessments.

It will also review its long-term strategic plans and priorities as well as the overall financial impact of the pandemic.

Officers say the estimated financial impact of COVID-19 for 2020/21 is £4.7m, caused by additional costs, loss of income and 'slippage' in achieving savings that had been planned.

"To date, funding of almost £1.6m has been received towards the costs and lost income, leaving a shortfall in grant funding of £3.1m for the year. Very real concerns have been expressed across the sector that the funding provided so far is nowhere near enough to enable local authorities to sustain their response to the pandemic.

"These further funding commitments are required urgently; if they are not forthcoming, the council will need to take a view on how it will meet any funding shortfall that remains for 2020/21," says the report.

A month ago, Cherwell Labour leader said he thought the district was going to be 'betrayed' over government promises that councils would not lose out on reimbursements for extraordinary spending during the crisis. This has meant everything from rates and rents relief to housing homeless people.

The council has received £133,843 from a £50m European Regional Development Fund designed to help councils reopen high streets and other retail spaces. The new money is to support measures so businesses can re-open quickly. It will also support a range of practical safety measures including new signs, street markings and temporary barriers.

In its 'scenario' planning Cherwell aims to ensure services are ready and prepared if a further local or national outbreak occurs, include workplace outbreaks and geographic outbreaks.

All council services will be expected to plan for the impact of a local outbreak and be ready to lockdown again. Plans are being drawn up for outbreaks in a specific site or work location, school, care home or council office, outbreaks in geographic locations such as a market town, village or ward area, outbreaks affecting a specific community such as faith groups, ethnic minority groups, colleges and among university students, a wider outbreak affecting the county or region or even a new national wave of the virus.