Estimated impact of coronavirus pandemic on Lewes council’s finances revised

Initially the council feared it may be left facing a budget shortfall of up to £19m, but has scaled back its predications in light of new information. 

The council says its projected figures have been produced by modelling a number of best and worst-case scenarios based on potential announcements from the government.  

The situation was discussed as part of a virtual cabinet meeting held on Thursday (June 11), where cabinet councillors also agreed to the creation of a £1.8m covid-19 reserve fund. 

Around £1m of this new reserve is to be pulled from money already earmarked for other projects, council papers say.

In a statement released after the meeting, Council leader Zoe Nicholson said: “Our finance team is working hard to calculate the full impact of Covid-19, which is a very difficult task as it’s impossible to predict how long the impact of the pandemic will be felt on our community, businesses and the council. 

“What is abundantly clear, however, is that the full support promised to us by central government as we launched emergency initiatives to help vulnerable people and our local economy back in March, has so far been meagre compared to our significant costs.  

“It is imperative the government lives up to its commitment to cover these costs or it will forever be known as the administration that betrayed local authorities and condemned public services as we know them.”  

Despite the lower budget deficit currently predicted, the council has warned its finances remain “very vulnerable” as a result of both lost income and increased demand on services.

Overall the council estimates its additional costs  arising from the pandemic so far, including delayed savings programmes, come to around £200k per week.

Council officers, however, have warned this figure is an approximate impact and worst-case scenario which takes into account significant loss of income, additional costs including increased demand in homelessness and housing need.

The council’s estimated budget shortfall comes despite the council receiving £1.06m as part of its share of a £3.2 billion emergency fund from government. 

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Prior to the meeting, the state of the council’s finances had been discussed by the council’s recently-formed policy and performance advisory committee – a group set up as part of the council’s scrutiny process-  which is set to hold its first public meeting later this month. 

The advisory committee is made up of five Conservatives, two Liberal Democrats, two Greens as well as a Labour and an Independent councillor.

In considering the situation, the majority of the committee resolved to recommend cabinet writes to government to “welcome and acknowledge” the financial support provided to the council, local businesses, individuals and other organisations.

The recommendation led to a rather tetchy exchange between cabinet members and the advisory committee’s Conservative chairman Joe Miller.

Chris Collier, cabinet member for performance and people and leader of the council’s Labour group, said: “I really don’t feel inclined to welcome or acknowledge anything from a government that’s financial response has been frankly inadequate.

“Not to mention their catastrophic response to Covid in general. We are looking at 60,000 excess deaths during the lockdown period and if we just look at yesterday, there were more deaths here than there were across the entire of Europe.

“So I don’t really support ‘welcoming or acknowledging’ anything. I think we can continue doing what is in the paper already which is continue to lobby the government to correct the failure in supporting the finances.”

Similar arguments were made by cabinet members Johnny Denis (Green) and James MacCleary (Lib Dem). 

Cllr Denis said: “Over the last ten years we have seen the break-up of our public health system in this country. 

“We have seen it dissolved and demoralised and split into multiple fragments, which means our response led by some very poor leadership in government, has been really poor.

“I think that is really important to acknowledge and this government certainly doesn’t need thanks for that.”

Cllr MacCleary, meanwhile, argued the support itself had received a mixed response from some residents, particularly businesses which had not qualified for the government’s business grants.

Responding to these views, Cllr Miller said: “Cllr Denis is incorrect in his assumption that we are [recommending] thanking government. It is clearly stated in the recommendation to ‘welcome and acknowledge the benefit’.

“If members decide to vote against that financial support across groups that is entirely their prerogative. It is not to thank, it is simply as the word states and it is across the council, local businesses, the self-employed, the unemployed.

“It would be an unfortunate position if members of cabinet were to vote against the financial support they’ve received, but that is entirely your prerogative.”

Following further discussion, cabinet members opted not to take on the committee’s recommendation as originally worded.

It did, however, accept a second recommendation to thank formally staff for their work during the crisis.

Cllr Nicholson said: “We are intending to write to the government anyway, and in fact we have been in close dialogue with ministers as part of that process.

“When we write it will be to acknowledge what we have currently received, but its focus will be much more on what is needed to support our community going forward both in terms of the business community and for the oncoming recession.”

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