Covid-19 cost to council could be as high as £380,000 a week

Cabinet councillors today (May 7) heard that Covid-19 is having an ‘unprecedented, detrimental impact’ on council finances and further government support is needed to cover huge losses caused by the pandemic. 

In line with many local authorities across the country, Lewes District Council’s income could fall drastically because  of the coronoavirus crisis, planned savings are not being achieved and spending has soared.

The council estimates that additional costs, including delayed savings programmes, arising from Covid-19 could be as high as £380,000 per week, should the lockdown continue and result in a long-term economic downturn. 

Councillor Zoe Nicholson, Leader of the Co-operative Alliance at Lewes District Council, said: “We reacted quickly to provide vital help for vulnerable residents and support the local economy during this time of national emergency – all while maintaining frontline services. 

“I have already put my thoughts on record this week regarding government support for local authorities. Suffice to say that from the outset, the government pledged full backing for our Covid-19 response but the money received from them so far, while welcome, falls way short of the amount needed to balance the books.” 

The council no longer receives an annual grant from government and the cost of its services are met through fees and income from council tax and local share of the business rates. These incomes are likely to drop significantly due to the pandemic.

The council is receiving emergency funding of £1.06million from the government to cope with coronavirus – £39,500 in the first tranche and just over £1million in the second round. 

However it is forecasted the council could see a reduction of £11.57m in fees and income this year, while its costs increases by £8.254m. 

Councillor Nicholson added: “It is impossible to accurately assess the long-term financial implications of Covid-19 at this stage, even with rumours of lockdown lifting, it will take a long time for our community to get back on its feet and the impact will be felt way beyond the immediate lockdown period.”

“We will struggle to cope with impact upon us this year without long-term, sustainable support from government.”