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Telford & Wrekin Council faces £19 million shortfall over pandemic

By Rory Smith | Telford | News | Published:

Telford & Wrekin Council is facing a shortfall of £19 million due to the coronavirus pandemic, a report to the council’s cabinet shows.

The authority said the additional budget pressure comes from facing the combination of extra costs and reduced income due to the pandemic and a further loss of £17m is expected by the end of the year.

The report states that it expects the pandemic to increase costs by £12m by the end of the year. This includes almost £4.5 million to support adult social care providers and clients, an extra £2.4 million providing support for children in care, almost £480,000 on extra measures to help tackle homelessness and £430,000 to buy extra PPE.

Part of the funding has been used to provide an initial supply of PPE to all schools to help them reopen as easily as possible.

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It comes as Shropshire Council's finance chief said the authority could face becoming effectively bankrupt.

Telford & Wrekin Council expects a further loss of £17m by the end of the year. This includes almost £3m through the closure of leisure centres, almost £2.5m in reduced business rental and around £1m due to the closure of its catering services and theatre, while income from planning and parking fees and the closure of its outdoor activity centre, Arthog, in Wales, has also dried up.

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The council also predicts to lose about £8m in reduced business rates and council tax as the impact of the pandemic hits many borough businesses and some residents face significantly reduced incomes.

Together these £29 million in extra costs have so far been offset by £10 million in extra funding from government, creating the £19 million funding gap – five times more than the savings it had originally expected to make in its budget this year.

Councillor Rae Evans, cabinet lead for finance, said: “We estimate the financial impact of the pandemic this year will be around £19m and we need the government’s help to plug this gap.

"The council has worked very hard to support our more vulnerable residents, for example by providing free school meals to those eligible weeks before any national scheme was put in place by the government.

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“We’ve met extra care costs for both vulnerable adults and children, while we’ve given schools initial supplies of PPE so they can reopen as quickly and as safely as possible.

“We’ve provided extra funding to help the homeless, support our foodbanks, mental health and domestic violence partner services – all very real pressures created by the lockdown.

“It is on top of the £123m we have saved from our budget in the last 10 years because of austerity.

“Ministers have promised that government would support councils to do whatever was necessary to tackle the pandemic. We now ask the government to make good on that promise and help us by filling the £19m shortfall.

“Councils of all political colours agree – we need more help from the government."

Rory Smith

By Rory Smith
Reporter - @rorysmith_star

Senior reporter based at the Shropshire Star's head office in Ketley, Telford.

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