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Coronavirus: Harrogate Council facing a £10m shortfall

Coronavirus: Harrogate Council facing a £10m shortfall

Published by Local Democracy Reporter Jacob Webster at 8:09am 23rd April 2020.

£10m shortfall at Harrogate Borough Council

  • Harrogate Borough Council is expecting to be around £10m short of cash to fund services following the coronavirus outbreak.
  • It claims most of the cash is from lost income from its leisure facilities and car parks as well as the impact on business rates and council tax income.
  • Leader of the council Richard Cooper has said it is difficult to know the long-term impact.

The region’s cash-strapped councils have warned they are facing multi-million-pound funding shortfalls as they battle to keep a cap on the escalating costs of the coronavirus crisis.

The pandemic has left both Harrogate Borough Council and North Yorkshire County Council digging deeper into their pockets to keep their vital services running against a backdrop of years of funding cuts.

And although the authorities have been promised their share of an additional £1.6billion in government funding – it remains unclear how much they will each get and whether it will be enough for them to cope with continuing pressure on local services.

Harrogate Borough Council Civic Centre
Harrogate Borough Council Civic Centre

Harrogate Borough Council is expecting to be around £10million short of cash to fund its services in 2020/2021. The vast majority of this is in lost income from its leisure facilities and car parks, as well as the impact on business rates and council tax income.

Council leader Richard Cooper said:

“Our cash flow has been hit hard and it is difficult to know the long-term impact of that.  What I can say though is that we will continue to prioritise spending on front line services, on our retail centres, on community facilities, on the homeless and those at risk of homelessness and on supporting the voluntary organisations that make our area the special place it is."

The borough council has so far spent more than £20,000 on its direct response to the pandemic

And Coun Cooper said the authority was in a relatively strong financial position before the virus swept across the district.

He added:

“Over the years the council has paid off debt and invested in capital assets to save revenue costs.  A good example is building the new Civic Centre which has meant we can save around £1million every single year which we can then spend supporting services.

 “This means that we are in a relatively strong financial position despite income from central grants being reduced over the last decade as the country has sought to balance the national books.”

North Yorkshire County Council – which is responsible for services including social care, roads and education – is expecting to be £65million worse off than anticipated before the pandemic began.

Whilst it has already received a £15million government grant, the council will still be left with a £50million shortfall.

Council leader Carl Les said: 

“We greatly appreciate that Robert Jenrick, Secretary of State for Housing, Communities and Local Government has been listening to us.

“He has taken on board that we urgently need additional funding for the crucial role we are playing in pulling communities together and building trust among people to fight the pandemic and for that we are thankful.

“We don’t yet know the size of this additional allocation for the county council but this extra funding will undoubtedly help to bridge the gap.

“Nevertheless we still face massive financial challenges and we estimated that the original allocation of £15millon of grant for covid-19 needed to be quadrupled to deal with the estimated costs.”

The crisis has prompted warnings from the Local Government Association that some councils were considering taking “extreme cost-cutting and rationing measures.”

The organisation said in a letter to the government that unless more funding was received, the situation would end up “harming both the long-term continuity of existing services and the covid-19 response at a time when both are so vitally needed, something we all wish to avoid.”

It also stressed the loss of income being generated by local authorities.

North Yorkshire County Council county hall
North Yorkshire County Council county hall

North Yorkshire County Council said it has had to radically transform its services in response to the crisis – setting up emergency school hubs for the children of critical worker in Harrogate, supporting the NHS and care providers, sourcing personal protective equipment (PPE) and coordinating an army of volunteers to support people in self-isolation.
 
This has all come at a huge unexpected cost to the county council, which even before the crisis began was desperately pleading for long-term funding solutions – particularly for adult social care and special educational need.

North Yorkshire’s financial planning has been dependent on nearly £62million of temporary funding after the council lost around £136million in direct grants from government since 2011 when austerity began.

This has cut the council’s spending power by 40 per cent.

Coun Les concluded:

“The whole of North Yorkshire is pulling together to meet this unprecedented challenge and we are doing everything we can to keep people well and safe and to support the NHS.

“But we were already operating with reduced spending power so there is no doubt that we like many other councils, will need supportive and long-term partnership with government for the crucial role we play and to see this crisis through.”