"We will tackle it head on with or without government help" - county council on coronavirus cashflow crisis

The county council is facing a loss of income due to coronavirus.The county council is facing a loss of income due to coronavirus.
The county council is facing a loss of income due to coronavirus. | jpimedia
The councillor in charge of the budget at Northamptonshire County Council has said it will tackle the financial impact of COVID-19 'head on', with or without the help of the Government.

After managing to the turn the tables and balance two budgets in a row, the county council is back in the unwanted position of facing a cash crisis - this time though it is down to the coronavirus pandemic, and it will not be tackling the problem alone.

An initial report from the authority anticipates that they may be a funding gap of between £14 million and £27 million due to costs associated with the virus, and that is including a £30 million windfall from the Government.

Hide Ad
Hide Ad

And cabinet member for finance, Councillor Malcolm Longley, said the authority was now running two sets of books - one for 'business as usual', and another with the costs brought on by the pandemic.

Speaking at a virtual cabinet meeting on Tuesday (May 12), he said: "We were doing so well, then all of a sudden here we are, such is life. It just came upon us so fast.

"We’ve got money from the Government, but we believe we’ve got a much higher affected expenditure - and there’s a gap. How big the gap is is a debatable point at the moment, but there will be a gap.

"The Government had said it was going to close that gap for us, and if they do that then very good. But if they don’t, or can’t, then we’ve got a problem that we will need to deal with.

Hide Ad
Hide Ad

"If you talk to the officers and cabinet, and the attitude that we’ve been here before. We’re not going to roll over here, we will tackle it head on with or without the government’s 100 per cent support."

Two years ago, the county council became the first authority in two decades to issue a section 114 notice, which effectively is banning any spending other than what it is legally required to do. It means the council was effectively bankrupt.

Part of the finance report on coronavirus states: "Given the council’s recent financial history, using reserves to cover the financial pressure is not an option, as the council has a limited level of financial resilience. The Government funding so far has been assessed as being adequate until at least the summer, therefore there is no immediate need for a section 114 recommendation."

But councillors are worried what may happen if no further financial assistance comes from the Government.

Hide Ad
Hide Ad

Labour leader Councillor Bob Scott said: "It advises that there’s no immediate need for a section 114, which would be the last thing we want. But it is a possibility and I don't think anyone can deny it’s not a possibility."

While Liberal Democrat leader Councillor Chris Stanbra said: "It’s a worrying report, but we’re not alone. I’ve seen reports at other councils saying the same thing. With regard to the shortfall, what discussions have been had with the government, who with, and what assurances have been received if any?"

And the head of the scrutiny committee, Labour councillor Mick Scrimshaw, said that the committee would be looking into the financial impact the virus would have 'in more detail' when it next meets.

Responding to the comments, the Conservative county council leader Matt Golby said that a letter was being sent to the Secretary of State (Robert Jenrick MP) this week, from representatives of a number of councils.

Hide Ad
Hide Ad

He said: "We’re adding our voices through the Local Government Association and with ministers through the Chief Executive, to make sure we are collectively saying that local government, particularly county authorities, are very challenged and we need to be listened to and we need some further assistance.

"But we’re not banking on any other financial assistance, and if it comes to having to deal with this situation as it is now and how it’s described in this report, then I know that we have good form in dealing with difficult challenges."