Members of the council’s Overview and Scrutiny Board (18 May, 2pm) and Cabinet (27 May, 10am) will consider a report setting out the financial impact of covid-19.
Based on three scenarios with effects lasting 16, 24 and 52 weeks, the report profiles the predicted impact on the council’s budget. It estimates that, after the £22m already allocated by government has been taken into account, the effects of a 52-week impact could be £74.7m.
In a scenario whereby the economic impact on the council lasts for 24 weeks, the council would see a gross pressure of £53.3m. The report sets out the estimated breakdown of this alongside the council’s proposed financial recovery strategy.
A summary of lost income and additional expenditure shows:
Summary of lost income and additional expenditure
||Car parking and other commercial income
|Council Tax and Business Rates Income
||Council Tax and Business Rate reduced income
||Adults & Children’s social care buying more places at a higher price, PPE, chilled storage for excess deaths, homelessness and staffing costs
|Transformation, other efficiencies and savings not achieved
||Management and change capacity has been refocused on responding to the Covid-19 crisis
The global public health emergency has resulted in significant extra pressures on services that support the most vulnerable – older people, those with disabilities and / or care needs and the homeless. At the same time, the council’s income is collapsing with leisure centres shut, seafront services closed and parking fees not being generated, as well as lower council tax and business rates yields.
The 24-week scenario has particular significance to the council given its reliance on income from tourism to finance many services. This scenario means most of the positive impact from the 2020 summer months is lost.
The government’s initial covid-19 emergency fund for BCP of £11.1million was allocated to support additional costs and to contribute towards lost income. Details of how this has been allocated can be found in the report. An additional £10.9m of government grant announced on 18 April is currently being allocated and brings the total covid-19 funding to £22m.
Assuming the likelihood of ongoing restrictions and social distancing, set against our £283m net budget for 2020/21 and taking account of the £22m grant, we estimate now for a 24-week disruption period, to have a net pressure of £31.3m.
Whilst additional government funding is hoped for, the report sets out a series of proposed measures to help the council address the significant estimated funding shortfall this year. These are:
- The council has already restricted expenditure and implemented a vacancy freeze.
- Lobby government for additional funding
- Fast track some aspects of our transformation, in particular around office accommodation, with a review of previously proposed budgets
- Review staff costs, including permanently deleting vacant posts and applying for the government’s Job Retention Scheme for employees in services that are currently not being provided to the public, are funded from fees & charges as opposed to general taxation, and the staff have not been redeployed into the community and wider Covid19 response. This includes employees in the council’s companies such as Bournemouth Building and Maintenance Ltd (BBML).
- A review of the budget across all services is already underway to agree what reductions can be made both in 2020/21 and ongoing.
- A reset of service provision in readiness for lockdown ending; rather than resume business as usual activity, work now to understand what the changes have been in our community and how we support them.
- A fundamental review of all projects.
- An ambitious property and digital strategy was already proposed for BCP Council, with plans progressing for a single administrative location; however, with national data showing a 90% reduction in commercial property use during lockdown, and a large increase in the use of technology such as Skype and Microsoft Teams, the council will re-examine the scope to amend or accelerate its proposals, maximising on the recent rapid deployment of technology and the flexibility of staff working arrangements.
- Review of reserves and contingencies.