Coronavirus crisis could cost Kettering Council £4m

The authority's income could be hit very hard if the crisis continues
The crisis is hitting all parts of the economy including local authority finances.The crisis is hitting all parts of the economy including local authority finances.
The crisis is hitting all parts of the economy including local authority finances.

Kettering’s Council’s finance chief says the coronavirus emergency could cost the authority as much as £4m but at the moment ‘there are more questions than answers’.

The best and worst case scenario of how the crisis could affect the finances of the Kettering authority were laid out in a report by head of resources Mark Dickenson to the authority’s executive committee at a virtual meeting last night (June 16).

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The authority, which is in its last year and is due to be merged with neighbouring councils to form the new North Northamptonshire Unitary next April, has modelled the impact based on a three month, six month and nine month scenario.

It is predicting the crisis could cost the authority between £360,000 and £4m depending on how long the economy is affected by coronavirus and how long national restrictions such as social distancing remain in place. The authority has an annual expenditure budget for this current financial year of £60m.

The report says the only cost impacts that have ‘crystallised’ so far are £142,000 in lost parking income and £30,000 lost from the leisure sector. If the crisis has an impact for nine months the impact on parking income would be £738,000 and other potential losses could be £1.5m on lost commercial income. It is also predicting £552,000 could be lost in planning fee income.

Mark Dickenson said: “At this stage it is too early to tell what the final figures will be this is because a significant element of the pressure will not crystallise until later in the year. Especially those related to income and cash flow. The figures will also be impacted by the recovery phase of the pandemic. There a number of financial challenges Covid-19 could have on the new unitary from 2021/21.

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“The pressures could include a reduced council tax yield, the impact of a delay of fair funding review and the impact of any business rates baseline reset.”

The government has given £3.2bn in funding to local authorities to help fund services during the coronavirus crisis but the County Councils Network claims the actual figure needed is more like £9bn.

The council’s portfolio holder for finance Lloyd Bunday said it was of paramount importance the council does all it can to help protect local businesses. He said the authority was paying suppliers immediately and also not pursuing debtors as vigorously as before. He also announced car parking charges would remain dropped until the end of July.

Labour’s opposition leader Cllr Mick Scrimshaw said the crisis would surely result in cuts to services and money would have to be taken from the council’s reserves.

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He said: “I hope that Government will come up with more money but if not we need to understand how the expenditure can be met.

“The big problem will come to the new unitary next year. Setting a sustainable budget is going to be a mammoth task.”