Cost Of Covid In Rother District Not As Bad As First Thought, Councillors Hear

Rother District Council expects to close out the year in a better financial position than previously expected, councillors have heard.

On Monday (July 19), Rother’s overview and scrutiny committee discussed a report on the council’s finances at the end of the covid-struck 2020/21 fiscal year. While the figures have yet to be signed-off through an external audit, the report shows the net cost of covid-19 may not be as bad as first feared.

Earlier in the year, the council estimated the net cost of its pandemic response would come to around £912,000, even after receiving funding from the government. But the council’s end-of-year draft figures have seen this number reduced to £485,000. 

This was largely as a result of an additional £246,000 in government grants since the earlier forecast, bringing the council’s total covid funding up to £2.813m.

Even so, the council expects to have incurred a deficit of £1.284m in 20/21, of which £367,000 was unplanned. This represents an improvement of £1.310m on the previous forecasts, however.

The report reads: “Officers continue to submit financial assessments of the impact of the pandemic to the Ministry of Housing, Communities and Local Government (MHCLG). It is not clear at this stage whether further grant funding over and above what has already been notified to the council, will be forthcoming. 

“The council’s Medium Term Financial Plan reflects the additional use of reserves this year above the original budget but expects, with the delivery of savings and extra income, to be in surplus by 2024/25, when the council will be able to start rebuilding its reserves.”

While the report puts the council in a better position than previously feared, concerns were raised about the long term impacts on its finances. 

Among those to raise concerns was Cllr John Barnes (Con), who argued that the impacts of the pandemic could make it harder for the council to cover its deficit in the longer term.

He said: “The other one which really worries me  is the longer term impact on business rates if there is a change of working practice and retail practice, because that is quite an important part of our scope. 

“I think we need to watch this space, but I am not quite as optimistic as I would have been two years ago.” 

Cabinet member for finance Kevin Dixon said: “I think what Cllr Barnes said is very true; we just don’t know what we don’t know. We don’t know what the effect of everything is going to be in the long term. The ship we are steering has got to be able to change course pretty rapidly I think over the next few years.

“Are we going to benefit from people not working in London and coming and working more locally in the nice area we are in? Or will actually people work at home and we lose business in Rother? Is car parking going to be affected, which we do rely on very heavily? 

“It is a nice report, the fact it is better than it was and we are not in as bad a position. But I think we are less worse, rather than better and we’ve got to be very reactive over the next few years to try and work out how things are going to go.”