The £43 million cost of Covid in balancing the budget

Council leaders are counting the cost of Covid as they prepare to set the budget for 2021/22.

They estimate that the pandemic will hit local authority finances to the tune of £43.5 million over three years in lost income and increased costs caused by the series of lockdowns and local restrictions.

It is in sharp contrast to the situation exactly one year ago, when the council replenished its reserves by £10 million and announced ambitious multi-million pound plans to tackle the climate emergency and help the borough’s most needy.

Councillors, when they meet on Wednesday (24 Feb) to set the budget, will be told that the authority faces a shortfall of £21m in the next financial year (2021/22).

Around half of this shortfall will be met by using reserves, but the rest will have to be made up by cuts to council spending on services.

Councillor Eamonn O’Brien, leader of Bury Council, said: “Covid has had a significant effect on our budgets, and will continue to do so for years to come.

“This current year, Covid has cost us £46 million, towards which we have received £36 million in Government help. That still leaves us with £10 million to find, and we estimate that the shortfall will be a further £33 million over the next two years.”

He added: “Despite these challenges, on Wednesday we will be announcing firm measures to help the local economy, and our citizens, to recover and be in the best position to flourish as we emerge from lockdown.

“When we last set our last budget in February 2020, we put substantial sums of money back into our reserves. This has turned out to be exactly the right thing to do, with the virus arriving in Bury just days later, which will enable us to manage the budget reductions and ensure that the savings required do not undermine our key priorities.

“The immediate future will be very difficult, but our advance planning means we can be confident and determined to build a healthy and prosperous future for Bury.”

As well as using reserves, the council is considering a range of budget reductions. The largest savings target is in adult social care provided through the One Commissioning Organisation, which will save £9m over the four years through a number of service changes and priorities including more emphasis on community care.

There also savings of £1.2m earmarked in children’s services, around the reviewing of contracts and the removal of vacant posts.

Proposed ‘transformation’ measures would save £5m through closure of council buildings and more agile working, self-service and ‘digital first’ measures, and promoting more self-care at neighbourhood level.

A further £1m could be raised by the closure of civic venues, dimming street lights at night, and improving the efficiency of waste collection services.

The budget meeting, which starts at 7pm, will be streamed live at https://councilstream.com/burycouncil

ENDS

Press release issued: 22 February 2021.