How Isle of Wight Council will pay for Covid crisis

But it will be looking to stall the Nicholson Road development in Ryde and purchase of Camp Hill, among other savings.

Due to the unexpected costs as a result of the coronavirus pandemic, the Isle of Wight Council has been left to find nearly £10 million to cover expenses after funding from the government only covered part of the bill.

Council leader, Cllr Dave Stewart reassured residents a Section 114 notice — essentially the 'bankruptcy position' — will not have to be issued.

Instead, a 'deficit reduction strategy' has been drawn up by the council's cabinet to find the cash needed.

Read more: Isle of Wight Council nearly £10 million short after coronavirus

Speaking at a meeting of the corporate scrutiny committee, Cllr Stewart said: "The finances for the Island are in a place where we are not facing a 114 situation.

"That said, people shouldn't read into that that our finances are not in a challenging position.

"We feel we are in a contained financial position, which is impressive considering the amount of money we have had to spend but we are now working that through and I believe provided we maintain our headlights on the situation we are going to be able to get through this in a positive way."

Read more: Isle of Wight Council's coronavirus cash (and where it's all gone)

Areas where money will be cut from the budget include refurbishments of council buildings, regeneration and building projects as well as from money set aside.

In total, nearly £11.5 million will be found through the strategy — including 'headroom' of £1.7 million to deal with any other unfunded Covid-19 costs.

As part of the £11 million, money will be taken from reserves earmarked for short term risks — in this case, £3 million that was set aside to cover any potential court costs as a result of the council's legal battle over the Christ The King College sixth form building contract.

That was not needed and will now be used instead to clear some of the deficit.

The refurbishments of Sandown Civic Centre and Ryde Help Centre will be put on hold, saving £875,000, as 'lessons have been learnt' from current working arrangements, including those working from home.

This ties in with £50,000 being saved to further increase the flexible use of office accommodation within council buildings.

Nearly a million pounds can be saved from the re-purposing of the first floor of Westminster House, a respite centre in Newport, as the intended outcomes have been achieved through other means.

The proposed look of Nicholson Road.

Perhaps the biggest plan to be put on hold is for the Nicholson Road development in Ryde, which would see more houses, industrial space and a GP surgery if planning permission is granted. £260,000 will be saved by postponing further enabling work once the council say planning permission is secured.

Read more: Isle of Wight Council submits plans for houses, GP surgery, pharmacy, gym, offices and cafe at Ryde development

Further steps to buy the Camp Hill site are also in the firing line, as £300,000 set aside for the production of the outline business case will be taken away as the council require assurances from the Ministry of Justice to give 'sufficient confidence' to invest in the business case.

The gates of the old Camp Hill prison.

Delays in securing a business partner for the development of Sandham Middle School allow the scheme to be deferred, adding £860,879 to reducing the deficit.

In council papers, Cllr Stewart says the items have been deferred to a later date but 'should the council's financial position improve these items of expenditure will be reconsidered, so they are not abandoned altogether, but that may be the case if no new funding is secured for their delivery'.

Cabinet member for finances and resources, Cllr Stuart Hutchinson said there is a couple of issues financially but new funding has been announced from government — a 'relatively modest sum' from a fund of £500 million shared between about 343 local authorities and a 75 per cent support for the loss of council's income, including from the Floating Bridge, parking fees and leisure centres.

Speaking at the scrutiny meeting, Cllr Hutchinson said: "We probably won't get the full 75 per cent but it will give us several millions towards that black hole. We are awaiting the final detail and we don't know when we will get it.

"We think we may be able to finish this financial year without going into a section 114 order but we do still have to find savings for next year.

"We do face a serious challenge for the next financial year and we will start working on that in the next couple of months."

Read more: Funding blow gives Isle of Wight Council 2021/22 budget headache