28th Nov, 2020

Covid-hit Redditch council left reliant on Boris to stem losses

LOSSES suffered by Redditch Borough Council due to the Covid-19 pandemic are so serious it has been left ‘absolutely reliant’ on government help to bail it out.

Councillor David Thain (Con, West) the authority’s portfolio holder for finance, described managing the plummeting income figures as ‘akin to pushing water uphill’.

“The losses are significant at the moment and they will probably become even more significant,” he said.

“We are reliant on the government who said they will step in.

“The losses from leisure and from rent and from council tax, they are huge.”

Estimates put before the borough’s executive committee could see a £2.5million hole blown in council coffers, including in the region of £850,000 in losses for Rubicon Leisure plus losses of £249,000 in council tax, and £175,000 in lost rental income.

Debt levels in the authority’s Housing Revenue Account currently sit at £1.2million with the potential to grow to £2million.

Members also heard many residents had deferred council tax payments and there was a worrying fall in business rates.

Finance officer Jayne Pickering warned that any increase in unemployment and Universal Claimants could further affect the figures.

And the borough is not alone – as a result of the coronavirus pandemic local authorities up and down the country are facing a higher demand for services, lower income and as yet not enough income support from central government, set against a legal obligation to balance their budgets.

It puts many authorities in fear of a Section 114 Notice which would prevent any new spending except to safeguard the vulnerable, provide statutory public health services and meet the critical needs of older people.

Indeed at the executive meeting at Redditch Town Hall on Tuesday evening, August 4, Coun Mike Rouse (Con, Church Hill) said a Section 114 Notice hung over the authority ‘like the Sword of Damocles’ – that is, impending disaster.

He warned of ‘difficult decisions on the horizon’ which would need to be taken.

However members heard at the request of government it had been filing the level of its monthly losses and to date Redditch had received £1,058,000 in funds with further requests going in to cover Housing Revenue Account losses and leisure losses.

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