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Stark reality of COVID-19 costs laid bare

Published on:

30 June 2020

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Enfield Council is calling on the Government to fulfil its promise to fully fund all the costs and loss of income arising from COVID-19.

Enfield Council is calling on the Government to fulfil its promise to fund all costs and loss of income arising from COVID-19, as projections show the Council expects a 5-10% drop in Council Tax receipts directly as a result of measures to stop the spread of the deadly virus.

By the end of May, Enfield Council had collected £9.9m in business rates, compared to £20.6m in the same period last year. 

Even after support provided to businesses, the Council expects to make use of the safety net that protects local government against business rate losses above 7.5% against its baseline funding level.  The Council expects the Government to honour its legislative promise.

Enfield Council also expects a big fall in Council Tax receipts this financial year. Council tax relief within the first two months is already £2m higher than last year because of COVID-19, with an expectation that costs in this area will also rise as furloughing ends and innocent citizens lose their jobs.

There is concern locally that if the Government does not fully fund all of Enfield Council’s costs, cuts may need to be made to vital services that the most vulnerable residents will increasingly rely on as the borough seeks to recover from the pandemic.

Enfield Council’s Cabinet Member for Finance & Procurement, Cllr Mary Maguire, said: “Our Council Tax receipts are forecast to be down between 5% and 10% for 2020/21 based on current projections, even after taking into account the Council’s use of the Hardship Fund.

"We are worried that the costs of Council Tax Support will increase significantly, due to the expected wave of job losses. It is already costing us an additional £2m, and will put extra pressure on our already over-stretched finances.

“Before this epidemic, we had set a balanced budget, against a backdrop of having to make £178 million savings over the past 10 years because of Government budget cuts and increasing pressures on services.

"Despite all that, Enfield Council stepped up during the Covid-19 pandemic, providing comprehensive community and business support and essential services to protect local people and businesses.

“Enfield Council is forecasting financial pressures of £68m as a result of the impact of the coronavirus.  The Government has pledged £18m in response so far, leaving an estimated shortfall in funding of £45m.* (taking into account capital financing savings and allocation of reserves).

“The Government must fulfil its promise ‘to stand shoulder to shoulder with local government’ and provide funding to fully cover all costs and future pressures incurred in dealing with COVID-19, so that we can continue to deliver vital services and support our communities through this challenging time.

“Failure to provide the funding we need will mean the Council may need to cut vital services and would reduce the Council’s ability to rebuild our communities and respond effectively to future emergencies.”