Covid-19 continues to batter East Herts Council's budget
The ongoing cost of the Covid-19 crisis for East Herts Council was made clear at a meeting of its cabinet on Tuesday (March 30).
Cllr Geoff Williamson, the council's deputy leader and its executive member for financial sustainability, delivered the latest quarterly corporate budget monitoring report and told members that a £159,000 overspend overall should be viewed as "positive" and that the council could be facing a much worse situation.
While some departments have managed to save money through a freeze on recruitment and other economies, the pandemic has sent others deep into deficit.
An overspend of £952,000 against operations is forecast because of the continued impact of Covid on income streams, particularly parking.
Although a Government scheme has been set up to compensate local authorities, East Herts is expected to absorb losses of up to 5% of its planned sales, fees and charges income, with Whitehall compensating the district for 75p in every pound of relevant loss thereafter.
But not all revenue streams are eligible to receive this support; for example, income from the sale of kerbside dry recyclables, where a loss of £239,000 is forecast, and a loss of £370,000 from the 'Alternative Finance Model' which the county council uses to reward districts like East Herts for recycling rates. Also, a £100,000 increase in materials handling costs is forecast due to increased contract charges as a result of Covid-19.
The council's strategic finance and property team has forecast a £360,000 shortfall in income.
Planning and building control has been even harder hit and is predicted to be over budget by £508,000 as a result of reduced income and additional costs.
Those bills include £110,000 in relation to appeals and enforcement costs incurred by the council – including its defeat over a traveller site at Little Hadham.
The impact on collection rates for council tax and business rates as a result of Covid-19 is being closely monitored by officers.
In addition, East Herts has restructured and reduced its capital investment programme, including slashing the projected cost of Bishop's Stortford's new arts centre at Old River Lane from £30m to £15.5m, and it is reviewing how it deals with bad debt, which had increased by £22,000 to £2.217m by the end of December.