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Hampshire County Council left with £195 million bill because of coronavirus

4 minute read
Hampshire County Council left with £195 million bill because of coronavirus

Published by the Eagle Radio News Team at 6:00am 27th June 2020.

The coronavirus crisis is set to cost a Hampshire council  £195m, with more than a half of it currently unfunded –  it has been revealed.

Hampshire County Council is set to foot a  £195.5m bill due to the pandemic, with £109.6m being unfunded.

The council said the £195.5m includes costs and losses in the current financial year as well as savings programme losses for a further two years and market underwriting costs.

A recovery plan is being prepared and is set to be presented to cabinet next month.

The government said to be working on “a comprehensive plan” to ensure councils’ financial sustainability over the financial year ahead.

The county council said it is not considering emergency spending controls, the so-called section 114 notice.

But it will continue to ask the government for support.

The figures were released during the meeting of the Policy and Resources Select Committee held this morning.

Rob Carr, head of finance at the county council, told members it is thought this year the authority will have almost £110m unfunded:

“We are going to keep saying to the government you need to stick to what you said which is spend the money and we will reimburse you. We need the government to fund the deficit.”

He told councillors that there are indications of a future government grant.

“But we don’t know when and how much”, he added.

The news comes as over the past months the county council received £54m  from central government.

Earlier this year county bosses also approved plans to save £80m by 2021. 

During the meeting Mr Carr said work on the approved saving programmes needs to be resumed.

“What we can’t do is assume that the government is going to bail us out. It is critical we deliver these savings,”

Cllr Keith House, opposition leader at the county council, said the government needs to honour its promise and fund local authorities.

Following the meeting, county council leader Keith Mans said the authority is in a better financial position than many other councils.

“We are optimistic about continued central Government financial support to local government and continue to press Ministers on a clear commitment for our sector.

"But we must make appropriate budget plans now, based on all circumstances.

"The report to be considered in July by the Cabinet and the County Council will set out a ‘response package’ based on various scenarios, including one where we won’t receive any more Government funding – and options for consideration will include the short term use of reserves.”

Talking about the unfunded £110m he said:

“This figure is based on a snapshot of an ever-evolving picture and will change as the longer-term consequences of COVID-19 are understood and Government guidance evolves around financial forecasting and the time period.”

Minister for Local Government Simon Clarke MP said councils have received a total of £3.2bn worth of emergency funding.

“Hampshire County Council has received a total of £54 million from this to deal with the pressures of coronavirus, while its core spending power increased by £55 million this financial year even before additional emergency funding was announced.

This is part of a wider package of support from across government for local communities and businesses – totalling over £27 billion.  

"We are working on a comprehensive plan to ensure councils’ financial sustainability over the financial year ahead – we will continue to work closely with them to ensure they are managing their costs and we have a collective understanding of the costs they are facing.”