Councillor Lezley Picton said it could not yet be predicted how the pandemic – as well as Brexit-related supply chain issues – would impact the council’s ability to stay within budget during 2021/22.
At a cabinet meeting, she told members the council had received £7.6 million from the government towards its additional expenditure and lost income related to the pandemic, but that it was not yet known whether any further grants would be handed down this year.
Cabinet was discussing the financial monitoring report on the first quarter of 21/22, which warned the council could be looking at an overspend of up to £10m by next April unless action is taken.
Councillor Picton said: “This based on information from April to June, the whole period of which was subject to the pandemic restrictions.
“The longer-term impacts from Covid-19 and also Brexit continue to emerge as the year progresses.
“The projected revenue figure at the moment is very difficult to gauge, given how early we are in the year. Quarter one is always difficult.
“A lack of clarity over how things are going to play out is also a factor, but based on the available data we estimate currently that there will be a £7.331 million overspend.
“However due to the uncertainty around Covid-19 and further government funding, we are currently estimating an out-turn anywhere between £2.5m and £9.7m.
“The £2.5m assumes we receive more funding from government towards Covid-19 related expenditure and also our loss of income. The £9.7m assumes suppressed demand emerges as a result of Covid-19 and no further funding.
“So you can see how difficult it is for us at the moment.”
Councillor Picton said by the end of June, £3.1m of savings had either been delivered or was being delivered by council services. The figure represents 24 per cent of the authority’s total savings target for the year.
Councillor Picton added that only 6.7 per cent of the council’s capital budget had been delivered by the end of the first quarter.
This was questioned by Councillor David Vasmer, leader of the opposition Liberal Democrat group, but Councillor Picton said: “A lot of the time we weren’t even allowed to go out of the house, let alone build anything.”
Councillor Dean Carroll, portfolio holder for adult services, said adult social care was forecasting a slight underspend this financial year but could be facing a shortfall of more than £10m in 2021/22.
He said: “We would have hopes and anticipations that that would be at least partially met by one-off government funding as it has been each year for the last however many years I can remember.
“But we can’t yet attribute that in any budget forecasts because we don’t have certainty that that’s going to be forthcoming yet.”