Cheshire East Council expresses new concerns over funding from government

Cheshire East Council has again warned that funding from central government is not sufficient to cover the forecasted impact of the Covid-19 pandemic on the borough’s finances.

The government recently announced the allocation of a further £500m emergency funding for councils across England.  Cheshire East Council’s allocation is £2.7 million, bringing the total amount of Covid-19 additional emergency funding for Cheshire East to £22.4 million.

However, in a report to council’s audit and governance committee, revised forecast cost pressures now total £70 million as a result of increased demand on services, loss of income and the council’s own response to the Covid-19 emergency.

Increased expenditure as a result of the pandemic is currently expected to be more than £42 million. A quarter of this figure relates to adult social care, with significant increases also coming from supplying PPE, home to school transport, and maintaining recycling and waste collections.

The pandemic has impacted on every area of the council’s business with increased expenditure incurred in services as diverse as homelessness, leisure, children’s social care and ICT. Reduced income for services stepped down through lockdown is forecast to be around £14 million, relating to services such as car parking, registration of births and marriages, cultural services, schools catering and planning. A further £13.8m is forecast for loss of income from council tax and business rates.

Councillor Amanda Stott, Cheshire East Council cabinet member for finance, said:

We are continuously monitoring our spend and forecasts to fully understand the financial impact of our fight against Covid-19.

“Councils are not permitted to borrow to support revenue expenditure and it is illegal for an authority to set an unbalanced budget in any financial year.  It is therefore now crucial for us to analyse the latest government funding and the extent to which the easing of lockdown and social distancing criteria will reduce forecasts to understand when cuts could be required to council services.”

Councillor Sam Corcoran, leader of Cheshire East Council said:

The council has really stepped up to deliver for the people of Cheshire East during the pandemic.  But we cannot ignore the fact that, in order to support people through this emergency, we have had to spend money that was not budgeted for at the start of the year. 

“We have received repeated assurances from government that councils will be fully compensated for costs incurred in the fight against Covid but we are yet to see the promise meet the forecasts.

“Cheshire East Council is not unique – councils across the country are facing the same challenges.  That is why we continue to work alongside other councils and organisations like the County Councils Network (CCN) and Local Government Association (LGA), to lobby government to fully deliver on their promise.”