Pandemic will have ‘considerable financial impact’ on Chichester District Council

The news was shared during a virtual meeting of the cabinet, with the figure based on how much money came into the coffers in April 2019 and how much came in this April.

John Ward, director for corporate services, described the financial impact of the pandemic as ‘considerable’ and predicted an £8m loss of income in 2020/21.

He added: “We think, moving forward, the impact is going to be significant.”

Only a fraction of the money collected in council tax and business rates actually stays with the council, with the majority of its income – around £18m per year – coming from fees and charges.

Mr Ward told members that income such as car parking charges would take several years to get back to normal, even after the Covid-19 crisis ends.

The financial help offered by the government has only come to £1.25m, with no clue if any more is in the pipeline.

Even if it was, Mr Ward said it was ‘unlikely’ to match the losses being faced by the council.

He added: “We’ve now received £1.25m of assistance. However, we’ve lost almost £1m of income in just the first month, so that money really is not going to go very far in terms of addressing the financial impact on the authority.

“For this financial year, the council will have no option but to use general fund reserves to balance the budget.”

With the available reserves amounting to more than £15m, Mr Ward said the council ‘can certainly ride out the immediate storm’ – at least for this year.

In the longer term, however, things look more concerning with balancing the budget for 2021/22 described as ‘more of a challenge’.

Mr Ward said: “We obviously don’t know what the long-term impact will be and how quickly the economy will recover.

“But certainly for the next financial year, we’ll be looking again at potentially having to use reserves or cut costs in some areas – or possibly a combination of both.”

A report into the financial priorities and recovery will be presented to the council in July.

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