Stockton-on-Tees Borough Council is facing a £17million budget pressure as a result of huge financial costs associated with the Coronavirus (Covid-19) pandemic.
The Council approved its budget for 2020/21 and Medium Term Financial Plan for the following three years up to 2024 at the end of February.
But since then, it has taken a severe hit and an expected £4million loss of income combined with a £13million increase in costs is now forecast this year.
And while the authority has received £11million in Covid-19 support funding from the Government, it falls well short of the expected budget gap of £17million.
Council Leader, Councillor Bob Cook, said: “Since day one of this crisis we have stood up to be counted and taken a lead role in the response.
“We helped mobilise an army of volunteers to deliver food parcels, prescriptions and other kinds of help to the vulnerable during lockdown.
“We’ve continued to provide vital front-line social care services and worked closely with the care homes and carers across the borough to support them.
“We’ve worked closely with our schools to support them to stay open for vulnerable children and children of key workers
“We were one of the best councils in the region at administering and allocating swift financial support for businesses.
“We’ve re-billed 14,000 households to provide Council Tax reductions and rescheduled payment dates for thousands more to provide financial support.
“We maintained weekly bin collections and recycling services throughout.
“We’ve led the local public health response and have done everything we possibly can to support vital public health messaging.
“Yet now we’re looking at a £17million budget gap and have only been allocated £11million from the Government towards it. It’s nowhere near enough.
“The Government made a pledge that councils would be given the resources they need to meet this challenge. They need to honour that pledge.
“There’s no point trying to dress this up – the picture is bleak.
“We’re having to look at use of reserves to make-up the remaining £6million but doing that will leave us more vulnerable in the coming years.
“It will leave us with longer-term financial pressures and more very difficult choices.
“This is a national crisis and the money for councils to deal with it should be coming from the Government, as promised.”
The £17million of cost pressures are in the following areas:
Adult Social Care – £4million
The Council is supporting care home providers through a temporary increase in the fees it pays them, which is currently costing £450,000 a month.
Children’s Social Care – £3.5million
Planned changes to the placements of children in care have had to be delayed and were set to save £1.9million, while increases in referrals and external placements could cost an extra £1.6million this year.
PPE and other direct Covid-19 costs – £800,000
These costs relate to PPE and other protective equipment and adaptations, and the setting up of the ‘COVID Community Support Team’ as well as its supplies.
Support for Tees Active – £2million
Leisure facilities are closed on Government advice and it is expected that the Borough’s leisure trust, Tees Active, will need an increased subsidy of around £2million.
Waste – £1million
The Council has maintained weekly bin collections throughout the pandemic, with increased costs from new ways of working and a rise in the volume of waste collected.
Capital projects – £1.7million
Work on the restoration of the Globe and the new Ingleby Barwick leisure centre has continued, but with much smaller workforces on site to enable social distancing.
This has slowed progress and the extended duration of the projects inevitably means there are additional costs.
The Globe was due to open in November this year but the completion date has been put back to April 2021 with additional costs of £1.2million.
The Council is in detailed discussions with the National Lottery Heritage Fund to seek a further contribution to these costs.
Subject to Government restrictions being eased, Ingleby Barwick leisure facility is due to open next month.
The project cost has increased by £500,000 and the Council is in discussions with Sport England about this.
Reduction in income – £4million
As well as increased costs, there has been a severe reduction in income in areas like parking charges, rents, licensing and planning.
The Council’s Cabinet will consider the budget position at its meeting on Thursday, July 16.
Cabinet will consider making a recommendation to full Council to approve the use of £6million of reserves to meet the budget pressures.
Full Council will then meet to consider the Cabinet recommendation on Wednesday, July 22.