Fair funding call to government to meet true impact of Covid-19

The budget monitoring report – which sets out the forecast budget position for 2020/21, shows that council finances continue to be significantly impacted by the pandemic.

Through implementing a successful emergency savings strategy, combined with some increased government funding, the council has reduced the financial impact it faced earlier in the year, but there is still a substantial gap – and this is without taking into account the impact of the upcoming national restrictions.   

In the early stages of the financial year, the council had a forecast overspend of £7m.  This factored in the increased spending costs on housing rough sleepers, providing food for vulnerable people, and enabling council staff to work efficiently from home – combined with a loss of income from car parks and commercial rents.

While keeping up with the changing demands of the pandemic, and providing key services, the council has worked hard to review spending commitments and identify savings.

This quick action has enabled the council to reduce spend by over £3m which, when combined with additional government support, has helped to significantly improve the forecast position. However, despite the extra measures taken to find savings and some additional money from government, the council’s general fund revenue budget is currently predicted to overspend by £800k, which will need to come out of reserves.

The council is currently in the process of setting the budget for the next financial year – which will go out to public consultation next month – and is waiting on further assurances over the funding from government. On current estimates, it leaves the council facing a budget shortfall of up to £5.2m next year alongside the continuing impacts of Covid-19.

Leader of the council, Councillor Alan Waters, said: “Government told councils at the outset of the pandemic that they would be fully compensated for the financial impacts of Covid. Yet here we are eight months later having entered a second national lockdown and having to take nearly £4m out of the council's budget this year to cover the costs. 

"And, as Norwich and every other council sets its budget for next year, we have no certainty about what financial support will be given beyond April. 

"This means that Norwich, like everywhere else, is facing very tough decisions about reductions to the local services our communities need while at the same time supporting them through the impacts of Covid.”