Coronavirus could leave Northampton Borough Council with £3m funding gap

Although the authority says it is ‘too early to fully understand the full impact’, a report has been produced with current estimates that outlines the significant challenges the borough council faces over the next financial year.

The Government has already given the authority £2.36 million in non-ringfenced additional funding, but even with that help it could still be out of pocket by up to £3 million.

Speaking at a virtual cabinet meeting on Wednesday (May 27), Councillor Brandon Eldred, the cabinet member for finance, said: “It’s too early to fully understand the financial impact on the council of the pandemic on cost pressures and income loss. However, I felt it would be helpful to share some of the indicative information to reflect the work we’re doing, and that we understand that the budget that we set in February may change throughout the year.

“Whilst we have received some government funding to support the response, we may have a gap this year between £2 million and £3 million. If we don’t receive any further funding, we do carry reserves to smooth our unknown pressures, however, our usable general fund reserve sits at £4 million. If we don’t receive further funding support we may have to consider making some cost savings in-year and or utilise some earmarked reserves [which stands at £25 million] which may impact some of the planned schemes.”

Pressures such as loss of income through parking, planning applications and community use of assets such as the Guildhall have all played their part in the figure being arrived at.

Labour leader Councillor Danielle Stone said the borough was ‘in a really difficult’ position. She said: “We were promised right at the beginning of the pandemic that the Government would pick up the tab and it’s been a shock to everybody to find that actually they’re not going to do that.

“We’re living in very uncertain times. Not only are we incurring a lot more costs, we are losing a lot of income as well. The biggest worry for me is that at the same time a lot of our households are becoming ever more vulnerable and that’s going to make cutting frontline services really problematic. I’m sure everyone in the cabinet and council will want to avoid that if at all possible.”

She also asked whether it would be possible to set up a separate scrutiny committee purely looking at the council’s finances. However, cabinet member Councillor Tim Hadland preached caution against setting up such a committee, arguing that putting extra workload on staff to set up such a committee during the pandemic should ‘be resisted unless absolutely necessary’.

Council leader Jonathan Nunn agreed with that assessment, but told Councillor Stone: “I’m fairly certain we can promise you something like a monthly update as these costs emerge, because they’re going to be so significant to the impact on our budget that we will want to keep monitoring them.”

He added: “Rather than a separate finance scrutiny, we can assure you of it coming to cabinet and we are very happy to have separate discussions where we sit down cross-party and discuss the emerging picture.”

The council anticipates it will have more information to base its projection on at the end of June, when ‘detailed costs are known and whether there may be additional government support’.

Should no further funding arrive, the report states the council will ‘need to actively consider additional savings in year or risk breaching its minimum level of safe General Fund Reserves’.

Although the meeting mood was sombre about the challenges faced, cabinet members did pay tribute to the hard work of staff during the pandemic.

Councillor Eldred said: “The staff have been fantastic. They’ve been working seven days a week to make sure the money for business grants has been paid out and that business rates have been reduced to zero. £64 million has been put back into our local economy because of that and that’s a good news story for us.”