Harrogate council forecasts £6.5m income losses due to Covid despite restrictions easing
Harrogate Borough Council has predicted that Covid will wipe millions of pounds off its finances this year despite the hopeful end of all lockdown restrictions.
Finance bosses at the authority have forecast income losses of around £6.5m from areas including Harrogate Convention Centre, leisure centres and planning in 2021/22 after what they described as an already "incredibly challenging" year during the first 12 months of the pandemic.
Speaking at a meeting on Wednesday, Paul Foster, head of finance, said out-turning on budget in February was an "incredible achievement" and that the council would now need to generate around £18.8m in income in order to do the same this financial term.
He said: "I can report that in line with monitoring through the year we will out-turn on budget. This is despite a net cost of circa £10m that the council faced last financial year as a result of the pandemic.
"To out-turn on budget is an incredible achievement, particularly as we have managed to maintain performance in a number of critical areas - and this is in addition to the council's response to the coronavirus pandemic itself.
"Key to achieving a balanced budget in 2021/22 is income recovery. We have budgeted for ongoing income losses of £6.5m as a result of Covid, but income generation of £18.8m is still required to balance the budget.
"There is a lot to play this year to see how successful we are in keeping to budget."
Council budgets across the UK have been stretched for some time as a result of years of government cuts, but for many Covid has only compounded the problem.
At a time when local authorities have had to spend more on supporting their communities, income streams have been hit hard with little cash coming in and a lot going out.
Some councils have struggled to carry out statutory duties, been at risk of bankruptcy and have had to ask the government to borrow emergency money in order to keep services running.
In Harrogate, the situation has not been quite as alarming but still serious all the same.
At the start of the pandemic, the council scaled back spending to essential areas only before introducing a recruitment freeze and shrinking its workforce by around 60 jobs.
The council has also redeployed many staff into under pressure areas such as bin collections and business support grants, with chief executive Wallace Sampson himself even lending a hand to waste collection crews.
The authority has received around £7.8m in emergency government grants, but this has still meant £2.7m of reserve cash has had to be used in order to plug funding gaps.
Meanwhile, North Yorkshire County Council - which looks after the vast majority of services including social care, education and highways - is facing a much starker picture with a projected funding shortfall of £59m over the next three years.
Speaking at Wednesday's meeting, Mr Foster said detailed reports of how Harrogate Borough Council is plotting its way out of the financial pressures of the pandemic will be brought to a cabinet meeting later this month.
"This report will be finalised this week and published next," he said.
"The out-turn position reflects the support across the council in adhering to the spending controls we put in place, including the recruitment freeze, in response to the financial challenges of the pandemic.
"The delivered savings would not have been achieved without a successful staff redeployment scheme. However, as we move towards business as usual, it is clear that the vacancy freeze is not sustainable and the filling of essential posts is key to our continued success."
By Jacob Webster, Local Democracy Reporter