Council faces £15m funding gap due to COVID-19


Calderdale Council faces an estimated £31.6 million worth of extra costs and lost income this year due to the COVID-19 pandemic. Although the Council has received £16.7 million from the Government towards these costs, there is funding gap of nearly £15 million in the short-term.

Keeping local people safe always comes first, and the Council continues to do all it can to protect and support Calderdale’s communities through this crisis.

On Monday 7 September, Cabinet Members will discuss progress with the Council’s financial recovery plan to address the funding shortfall caused by COVID-19, on top of the budget pressures that were already there before the pandemic.

A significant part of the shortfall is due to the Council being unable to make previously planned savings as a result of the virus, meaning difficult budget decisions will need to be made. £10.6 million of the shortfall is due to the loss of Council Tax and Business Rates, which the Government is allowing councils to recover over a three-year period.

This still leaves a £4.3 million funding gap in the current year, but the Council hopes to recover some of the lost income under a new Government compensation scheme.

The recovery plan is still dependent on the existing agreed savings being made, additional COVID-19 costs being covered by Government funding, and discretionary services continuing to be reviewed (this review of the ‘Future Council’ is being discussed as another item at the Cabinet meeting on Monday 7 September).

However, there will be major financial pressures next year and in future years. The Medium Term Financial Strategy, which is being considered at the same Cabinet meeting, highlights the scale of the challenge over the next three years.

Monitoring of the Council’s financial position and updates on its recovery plan will continue to take place and be discussed by Cabinet. An update on the Medium Term Financial Strategy and the likely level of savings required by the Council in future years will be provided when the Chancellor’s Comprehensive Spending Review and Budget announcements are made in autumn.

Cabinet Members will be asked to start the budget process for 2021 / 2022 as soon as possible, to identify the savings required and help meet the current year’s shortfall.

Cllr Silvia Dacre, Calderdale Council’s Cabinet Member for Resources, said:

“The Council continues to play a vital role to support our communities, businesses, voluntary organisations and our most vulnerable residents during the pandemic. Keeping everyone safe, well and supported is our absolute priority.


“We are all aware of the major financial impact the pandemic is having across the country and different sectors of the economy, and the Council is no exception. Government funding has provided some relief, but our long-term financial future is uncertain.


“The best case estimate for the budget savings required next year is at least £8 million, but it could be up to £20 million. But there will be some very difficult decisions.”

The Council’s financial position and recovery plan will be discussed at its Cabinet meeting on Monday 7 September 2020. The meeting will be held virtually from 6pm and will be live streamed through the Council’s YouTube channel.

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