Corby Council expecting £400,000 in missed rents due to Covid-19 impact

Corby Council’s finance boss says the authority is likely to be hit with a £400,000 rent shortfall by tenants who have been impacted by the pandemic.

Giving the first explanation of the costs to the council since the virus hit the country in March, finance director Adrian Sibley told councillors at Tuesday night’s One Corby meeting that despite the rent backlog currently running at a much higher rate, it was expected that the final figure by the end of the financial year in April would be around the £400,000 mark.

The authority owns its own housing stock and handles about £20m each year in rents.

In total he said the cost of Covid was about £2.1m, but £950,000 would be covered by grants given to the authority from central government.

He told councillors the extra costs could be handled by the authority’s reserves – it currently has £6m in the bank – and they should not be concerned about the financial health of the authority. But he did say that reduced income due to people getting behind on council tax payments and business rates would not be felt until the following financial year.

He said: “This year we’re looking at £2.1m worth loss which is entirely down to income shortfall in income in culture and leisure and property portfolio for obvious reasons due to Covid.

“This has been offset by £950,000 government funding, which gives us a net loss of £1.3m. That is our best estimate and could be subject to significant changes because it is such a volatile position we are in at the moment.

“The £1.3m loss will come from our reserves which are around the £6m mark. Members can be absolutely assured we are nowhere near a [Section] 114 notice. We will have more than enough reserves to fund this.”

A Section 114 notice is issued by a council when they think they can no longer operate as a going concern.

Northamptonshire county council famously issued a series of the notices in 2018 when it financially collapsed. In recent months a number of local authorities have said they are considering issuing 114 notices..

This is the final year for all Northamptonshire councils as they will be disbanded and replaced with two new unitary councils next April.

The cost of Covid is expected to impact the new councils in their first year, however presently it is not known what the final cost will be.