Plymouth City Council is facing a multi-million pound gap in its budget this year following the Government’s decision not to fully fund local authorities the additional costs of dealing with Covid-19 pandemic and their loss of income.
A budget position statement to the Cabinet on 18 August says councils such as Plymouth were originally told by ministers that all their COVID-19 costs would be covered. Plymouth City Council is to continue lobbying alongside other councils for the Government to pay the missing funding which could lead to a budget overspend this year.
The City Council had only just set its budget for 2020/21 days before the country went into lockdown. It was required to urgently implement exceptional measures, including setting up a temporary mortuary, securing supplies of PPE for care homes and ensuring there was support in place for more than 10,000 medically vulnerable residents who had to shield.
The finance update to Cabinet says “the challenge for the Council in delivering services within the budget was immediately thrown into doubt as the Council grappled with responding to the pandemic.”
The latest calculation is that COVID-19 resulted in a total of £27.7 million additional costs to the Council.
Some of these costs can be reclaimed from the NHS via the Devon Clinical Commissioning Group (DCCG) or from specific grants such as the Infection Control Fund and the Test and Trace Grant.
The Government has also provided three non-ring-fenced grants totalling £18.2 million but the Council has been left with a shortfall of £4.3 million for this year.
Councillor Mark Lowry, Cabinet member for Finance, said: “Before COVID-19 struck like many other councils we were in a position of having to meet very challenging savings targets in order to continue delivering the hundreds of services we provide for Plymouth. COVID-19 brought huge and urgent demands to help keep Plymouth residents safe. We rose to the challenge, implementing everything that was required of us and now the Council – and therefore Plymouth residents – are being penalised for it.
“We were told by the Government that councils would be reimbursed for all COVID-19 related costs. It is now reneging on this and is only reimbursing us for our lost income with 71 pence in every pound which could leave us with another £4 million gap to fill.
“The Government has gone back on its word and it is a smack in face to those councils that have done everything required of them to protect their residents. That injustice cannot be allowed to continue as it could affect services not only in Plymouth but also in other parts of the country that have also suffered years of underfunding.”
Councillor Lowry said Council staff had worked throughout the pandemic to keep vital services running and protect Plymouth’s most vulnerable residents. It was now operating around 90 per cent of its services.
“I’d like to say a big thank you to residents for their patience as we have brought services that had to close back into operation. The safety of residents and staff has always been our number one priority and will continue to be so.
“It’s such a shame that the Government’s response has been to short change cities such as Plymouth after they’ve done the right thing to protect and support their residents through this dreadful pandemic.”