Covid-19 crisis could cost Derbyshire County Council £120 million

Coun Barry Lewis also said the authority will be dependent on receiving more government funding in order to balance its books.

The authority has been given £37 million in government grants to help combat the costs of fighting the Covid-19 pandemic but this funding will run out in mid-June, leaving the council with a sizeable financial black hole.

Two weeks ago, Peter Handford, the authority’s finance chief discussed council papers showing that the authority could see a financial impact in excess of £120 million and stressed this was with many figures and costs still unavailable.

This included an expected significant spike in the number of vulnerable children needing council care as lockdown is lifted – which will cost the council greatly.

Costs included are payments to care homes, a colossal surge in personal protective equipment spending along with missed council tax and business rates income.

Coun Lewis said the threat was not a big issue yet but referred to a report commissioned by the County Council Network report which found authorities, including Derbyshire, may have to exhaust all of their emergency reserves.

However, Mr Handford warned that not addressing issues the right way at the right time could leave the council in the same position Northamptonshire County Council ended up in back in 2018 when it was served a Section 114 notice freezing its finances because it was not able to meet its demands.

Derbyshire’s current £120 million financial impact estimate is a fifth of its entire annual budget and it must also make cuts in excess of £65 million by the end of the 2024 financial year to balance its books.

Mr Handford said this month that some planned saving wouldn’t be able to go ahead due to lockdown.

The council has already offset much of the £65 million cuts target until after next year’s election, reducing this year’s intended cuts from £35 million to £19 million.

Coun Lewis reiterated that the impact of Covid to the authority is £10 million per month in extra costs, income shortfall and delayed savings.