Financial impact of Covid-19 revealed as Cheshire East calls on government to ‘cover full costs’

Cheshire East Council has revealed the financial impact of the Covid-19 pandemic and has renewed its call for central government to cover the costs.

A report to the borough’s cabinet outlines the council faces additional cost pressures of £70 million this year due to the coronavirus, £10 million more than originally predicted.

The report outlines the work undertaken to support communities and businesses across the borough as government-directed restrictions are being lifted and the plans the council is developing to support longer-term recovery from the pandemic. These include supporting affected businesses and town centres, developing regeneration projects to stimulate economic recovery and growth and attracting inward investment – as well as taking the opportunity to support ‘greener’ ways of working.

Government emergency funding has so far provided £19.5m towards covering the financial impact of the Covid-19 crisis in Cheshire East.

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

All councils are feeling the additional financial pressure of responding to the Covid-19 pandemic – and Cheshire East is no exception.

“The council now faces additional cost pressures of £70m due to Covid-19 this year alone. We welcome the additional funding from government provided to date – but it’s estimated we need more than three times this amount to meet the full costs to the authority.

“The pressures locally come from additional costs including social care, mental health, personal protection equipment, transport, distribution of business grants and ICT. In addition, it is costing us more to maintain essential services, such as waste and recycling collections, while ensuring that social distancing is in place. We are also experiencing losses of income, such as from weddings and tourism, including visitors to Tatton Park.”

The response phase is likely to continue for some time to come. In addition, the council is planning for potential second waves of the pandemic and/or localised outbreaks.  Cllr Stott added:

In February, Cheshire East approved a balanced budget for 2020/21 and we had plans in place to deliver this. However, Covid-19 has had a significant impact on every area of the council and it has changed things for all the residents, businesses and communities we serve.

“We do not yet know the lasting impact of the pandemic – but we do know that, even with anticipated government funding, we will experience unprecedented financial pressure this financial year and for years to come. 

“In line with other councils, Cheshire East has lobbied the government to cover the full costs of Covid to local authorities, as originally promised. This work continues, supported by our colleagues in the Local Government Association and County Council’s Network.

“We understand that the government will clarify the position on funding for councils soon and we will consider our next steps then, in order to be able to plan our financial future.”

As of 30 June 2020, there were 1,355 confirmed cases of Covid-19 in Cheshire East and 486 registered deaths (source GOV.UK). UK wide, there were 311,965 cases and 43,575 deaths.

A detailed report on the financial impact of the pandemic on the agreed budget for 2020/21 will be presented to cabinet in September and a meeting of full council in October.