North Yorkshire County Council finances take huge hit during coronavirus pandemic but officials say bankruptcy is still avoidable

North Yorkshire County Council has revealed how the coronavirus crisis has created a £42m black hole in its finances - but officials remain confident they will avoid the prospect of bankruptcy.

Friday, 19th June 2020, 12:30 pm

The local authority, which launched a range of emergency measures and transformed its services to protect its 600,000 residents during the Covid-19 pandemic, is now hoping for further support from the Government.

The gravity of the council’s financial position emerged after its chief executive Richard Flinton said recent days had seen the number of positive Coronavirus tests fall to single figures or no new cases and the number of Covid-19 patients in hospital serving North Yorkshire fall from a peak of more than 300 to 100.

Sign up to our daily Harrogate Advertiser Today newsletter

The i newsletter cut through the noise

North Yorkshire County Council has funded a number of initiatives to aid residents during the Covid-19 pandemic.

The council said while the county’s two peaks of coronavirus cases passed on April 9 and April 30, its test and trace programme had started dealing with small-scale outbreaks and the authority was “planning for the potential of a further spike”.

An estimated 243 people have died from the virus in hospitals serving North Yorkshire and a further 183 people have died in the county’s care homes, but it remains unclear how many people have died in their own homes.

Mr Flinton said the authority expected to have spent £42m fighting Coronavirus by the end of the year, but the disease had also halted many of the council’s cash generating streams, meaning it had lost about £10m of income.

At the peak of the crisis, the council spent £250,000 a week on personal protection equipment for hundreds of its staff on frontline roles, such as helping increase capacity at hospitals and providing daily support to the 3,000 residents most vulnerable to the virus as well as thousands of other people shielding themselves.

Mr Flinton said it had been forecast that the impact of Covid-19 on North Yorkshire residents, such as the rise in unemployment, would lead to a further £24m fall in future funding, including less council tax.

While the total potential cost of the pandemic to the authority was £76m, the government had given the council £26m to manage the outbreak. However, the council is hoping to recover £7.7m from clinical commissioning groups for extra adult social care costs in recent months.

Mr Flinton said the council would take measures to protect its financial position and called on the Government to help. He added: “It has been an event that has had a tremendous impact on the county. We are hopeful that the Government will recognise the need for further funding.”

NYCC finance boss Coun Gareth Dadd said should no more Government funding be forthcoming, the council hoped to avoid serving bankruptcy notices by being “careful over investments” and using reserves it had set aside for the final stage of austerity.

How Harrogate losses compare

Harrogate Borough Council has estimated a budget shortfall of £15million as a result of the coronavirus pandemic.

The deficit is largely down to a loss of income from lockdown-hit services including leisure, car parking and Harrogate Convention Centre which remains on standby as a NHS Nightingale Hospital. The council has received £1.6million in emergency funds from the government to help cope with the crisis.

Stuart Minting, Local Democracy Reporter

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

In order for us to continue to provide high quality and trusted local news on this free-to-read site, I am asking you to also please purchase a copy of our newspaper.

Our journalists are highly trained and our content is independently regulated by IPSO to some of the most rigorous standards in the world. But being your eyes and ears comes at a price. So we need your support more than ever to buy our newspapers during this crisis.

With the coronavirus lockdown having a major impact on many of our local valued advertisers - and consequently the advertising that we receive - we are more reliant than ever on you helping us to provide you with news and information by buying a copy of our newspaper.

Thank you.