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The cost of Covid-19 is set to soar to almost £60 million with discussions due to be held about how it will affect taxpayers and council services in Medway.
Latest figures revealed by our sister title the Medway Messenger show council chiefs told the government lost income and spending in response to the pandemic could fetch £57.2m.
The government has so far paid Medway Council £14.2m – leaving the council with a shortfall of £43m.
No decisions have been taken about whether services will be hit as Medway Council counts the cost of the virus but they are expected to be under pressure.
It comes after senior councillors warned this year’s budget will be the authority’s biggest challenge after already facing a struggle to balance the books in the previous 12 months.
Spending freezes and tight restrictions on council funds saw millions trimmed from a massive overspend predicted in 2019/20.
Gun Wharf bosses identified they needed to slash £7m by April in order to balance the books last year.
A moratorium on all non-essential spending was issued as the council grappled with spiralling costs.
Council leader Alan Jarrett (Con) told cabinet colleagues at a meeting earlier this month following the measures, the council had managed to put £2.8m into reserves and cut costs to spend under the overall budget.
But Cllr Jarrett warned the £11m held in reserves would “have to be harnessed frugally” to cope with the turmoil caused by Covid-19 and was “going to be desperately needed”.
He admitted the money “is not a great sum” against the council’s annual £1bn budget – half of which is spent on council services and every day spending to run the council.
It also barely covers a quarter of the predicted shortfall facing the council.
The council expects to spend £16m this year on its emergency response to the pandemic in addition to £42.2m lost in council tax, business rates and other income streams such as fees, charges and theatre ticket sales.
"Last year was nothing compared to the year that confronts us"
But this could be higher depending on how long government restrictions remain in place.
When contacted by the Messenger, the Conservative group said they were not able to comment further on how the cost of Covid-19 would impact services, council tax and other areas such as major capital spending projects.
Cabinet is expected to consider a report on August 25 detailing council spending in the first quarter and only then will the council potentially review budgets and public spending.
Cllr Howard Doe, deputy leader of the council, acknowledged balancing the books last year had been “extremely difficult” but warned it would be “nothing compared to the year that confronts us”.
He said: “I wouldn’t want people to run away with the idea it’s something we’ve achieved easily.
“We’ve had to keep a watch on this budget and not appoint staff we’d like and ask people to do additional work and they’ve all pulled through.”
He said Westminster would have to support local government to “fund it properly” otherwise Medway and many other councils would face “extreme difficulties”.
Opposition leader Vince Maple (Lab) said there is “real and present danger” of councils like Medway invoking a Section 114 – legislation which effectively sees councils declaring themselves bankrupt.
He added: “With the low levels of reserves at Medway Council anything close to the £40m shortfall estimate is going to completely devastate local services.
“It is quite clear looking at the estimates from senior council officers that we could have anything up to £40m pounds shortfall in funding with the combination of increased pressures in services related to Covid-19 and dramatically reduced income in areas such as council tax and business rates.
“This is with the backdrop of a decade of Conservative government austerity and cuts to local government funding.”
The council says it will continue lobbying government to underwrite “all local authority expenditure” during the pandemic.
Would you be willing to pay more tax to keep services? Email medway@thekmgroup.co.uk
