WITH the Isle of Wight Council announcing a funding shortfall of nearly £10 million in its finances due to the coronavirus pandemic - and with a warning that there is unlikely to be any further financial help from the government - we look at a breakdown of the figures.
Scroll down to see the breakdown of lost cash...
Read more: Isle of Wight Council nearly £10 million short after coronavirus
In a report to councillors, officers at County Hall said it 'remains unclear' as to whether further funding will be sent from central government. The minister of housing, communities and local government, Robert Jenrick, has 'made it clear' councils should not expect the government to meet any shortfall, according to the paperwork.
Before the pandemic started, the Isle of Wight Council laid out its budget plans for the 2020/21 financial year, which included savings of £4.5 million.
Even then, the local authority was plagued by uncertainties. The Isle of Wight Council had hoped for nearly £9 million extra, both from the fair funding review (worth a potential £2.5 million) and the promised £6.4 million Island Deal.
Now, with the ongoing coronavirus crisis, the council says it has to be 'mindful’ to balance its own ‘fragile’ but ‘improving’ finances with the emergency needs of the Island.
A report set to go before the Corporate Scrutiny Committee next week (Tuesday 9 June) addresses the ins and outs of the council's coronavirus action plan. It shows the financial position of the council is 'serious' — despite government funding of an extra £9.05 million over two COVID-19 handouts.
It means that there is a shortfall of £9.79 million.
Where has the shortfall come from?
Services that haven’t brought in the cash during the coronavirus pandemic include:
- Lost parking charges of £3,167,106
- Leisure centre income of more than £1.7 million
- Floating Bridge income of nearly £363,000
Other lost fees and charges totalling £1.16 million:
- Registrars
- Land charges
- Property
- School absence fines
- Registry services
Extra council tax help and loss of business rates total almost £2.3 million
Additional expenses incurred by the council, of more than £7 million:
- £2.2 million on Personal Protective Equipment (PPE)
- £950,767 for workforce pressures in adult social care, with the need of additional and agency staffing
- £658,559 for temporary mortuary costs.
The Isle of Wight Council says it has postponed plans to save money in adult social care and cannot move forward with £1.1 million in planned savings.
"We’re not a big authority, but what we do have is a terrific team of staff who have been prepared to go above and beyond, and do what is needed."
- Isle of Wight Council leader, Cllr Dave Stewart
In a press release yesterday, Cllr Stewart, said: “The council has to manage the resources it has got.
“Like councils all over the country, the coronavirus has left us with some big financial challenges.
"This report shows that we are making sensible preparations to face them. I have already raised the council’s financial position in a recent meeting with the Minister for Local Government.
“Our track record of responsible strong financial management has meant that today we are in a far better position to weather this storm than we would have been in the past.
"Our overall objective has been and continues to be to keep people safe — and this will continue to guide our decision making going forward.”
In a letter to councils sent at the start of May, the secretary for state Robert Jenrick said: "We wouldn't want anybody to labour under the false impression that what they are doing will be guaranteed to be funded by central government."
The Isle of Wight Council insists it is not allowed to let its reserves fall below £7 million. That leaves County Hall with just £3.2 million to offset the coronavirus loss.
The council's cabinet is in the process of developing a ‘deficit recovery strategy’ which will allow the council to continue to operate without the need to consider emergency spending controls, or service reductions.
Some spending plans, previously approved, may be placed 'on hold'. The Isle of Wight Council has not released details of what plans may be frozen.
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