£50m budget black hole for Rotherham Council

£50m budget black hole for Rotherham Council

By Admin | 12/05/2020

£50m budget black hole for Rotherham Council
Rotherham Borough Council Chief Executive, Sharon Kemp

 

INCREASED demand and lost revenue caused by Covid-19 could create a £50 million budget deficit for Rotherham Council, bosses fear.

Weekly updates are being sent from Riverside House to keep the Government informed of the financial picture.

More than £8 million funding has arrived — with promises of more on the way — as RMBC loses income and faces heavier demands on services.

Chief executive Sharon Kemp said: “We do know that the first tranche of funding will go nowhere near touching the impact that we are currently seeing.

“There will be figures mooted around the size of the impact. At the moment it’s too early to say with any definitive what the impact will be but it could be up to the figure of £50 million.”

She added: “At the moment, there’s too many variables to pin that down.

“That’s why the weekly data returns that finance are doing become really important, to look at the further tranches of funding that national government make available to councils across the country.”

Council leader Cllr Chris Read said arriving at a coronavirus cost figure for Rotherham was tougher than for some authorities, which have been able to produce more precise estimates.

He added: “Other places run on a more commercial model. If you are one of those councils that have just bought a shopping centre in the last couple of years and know how much revenue you expected to generate from that, then all your shops are shut, you know what the cost of that is and can project that forward.

“We have never been a council that is particularly commercial in that sense. Some people have urged us to be but it hasn’t particularly happened.

“Likewise with traded services. If you run your leisure services through a leisure trust, you know what the cost of that is to the council.”

Big factors for Rotherham will be the lower collections of council tax and business rates for 2020/21 — and the losses are not yet known.

“These require people to have foresight about which businesses will reopen after the end of lockdown,” Cllr Read said. “That’s a difficult task to produce.”

Savings of £13 million from child and adult social care were planned in the budget for the current financial year but disruption means the cost-saving changes will not be implemented as intended.

Cllr Read said: “Adult social care workers can’t do all the reassessments of learning disability service users and therefore we can’t move on to shifting to the new model.

“We think in the end that will be helpful and save money. But we can’t deliver these savings in the current situation. I’m concerned that the Government will not necessarily look at that as money to be refunded.”

He added: “Depending on the situation, it could be a total figure of £50 million, of which we have received just short of £9 million from the Government.

“But it could be a very small overspend if we move back quickly, with a strong economic recovery. If we are in lockdown for a year, it will be more than that number.”

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