The Covid-19 pandemic is expected to cost Rother District Council an eyewatering £3.8m – and this could rise if there are further lockdowns.
The figure, which is revealed in a report being discussed by the council’s cabinet on Monday (September 7th) is made up of lost revenue and extra expenses incurred.
While the financial blow has been softened by a £2.2m grant from the Ministry of Housing, Communities & Local Government (MHCLG) the estimated net impact of the virus is still £1.7m.
The council’s response to the Covid-19 pandemic has inevitably put the budget under enormous pressure, according to the report from Antony Baden, RDC’s finance manager.
“All forecasts include inherent risks and the level of uncertainty surrounding the pandemic means it is highly likely that subsequent forecasts will fluctuate significantly during the financial year,” it stated.
One of the biggest additional costs has been an additional £1.8m incurred by the Housing & Community Services Department.
This includes £648,000 helping people in temporary accommodation and providing places for rough sleepers. Officers are currently preparing bids for additional funding to help with the overspend.
An estimated £415,000 is being allocated to help Freedom Leisure, which runs three council-owned facilities in Bexhill and Rye.
“These facilities were closed due to lockdown, which meant that Freedom Leisure were unable to generate income and had to incur some costs,” states the report.
Following a request from the company, the council’s cabinet agreed at its meeting on July 27th to provide financial support until March 31st, 2021. The estimated cost is a maximum of £415,000.
Cabinet also approved a request for £350,000 from the De La Warr Pavilion Charitable Trust, which was forced to close during lockdown.
In addition, the closure of car parks is expected to result in a shortfall of £235,000. Most of these sites suffered an income downturn, with the exception being Camber.
“The exceptional weather has resulted in a large increase in the number of visitors once the car parks reopened,” noted the report. “This also meant that security was required during the spells of warm weather at a cost of up to £9,000.”
Separately, the forecast also includes a £31,000 shortfall in concession income/rents in parks, promenades and beaches. Improvements to the Town Hall’s reception, meanwhile, are estimated to cost £43,000.
The Resources Department is also spending £651,000 on hardship funding to help residents who are experiencing financial difficulties as a result of the pandemic.
The council’s investments have also suffered. It put £8m into two property funds, but their current market values have fallen by around £500,000.
The report warns there could be further falls as the crisis continues but emphasises these are long-term investments and it’s hoped that values will rise as the economic picture improves.
“At this point it is not expected that the council will need to withdraw these funds and there is no expectation that the loss of capital value will be realised,” it states.