Financial impact of COVID-19 for Bedford Borough Council

Bedford Borough Council's Executive discussed the financial impact of COVID-19 following a report highlighting that the council is facing a financial gap of between £22 and £36million over the next five years with the impact of COVID-19 causing a significant pressure.

The impact of COVID-19 has affected services across the Council, with new ways of working and new demands, placing the council under unprecedented pressure in working to deliver care for the vulnerable, elderly and shielded. This has included setting up a Community Hub, providing food and support to those in need while keeping vital day-to-day operations running in challenging circumstances.

The council's finances for 2020/21 were discussed at a meeting of the Executive, Wednesday 16 September, setting out the financial impact of these vital support services and lost income to the Council. This report forecasts extra costs and lost income of £12.7m in this year's Budget. This is on top of £1.3m extra spent in 2019/20 at the start of the outbreak.

To date, the Government has given £8.9m in grant funding to the Council to cover the financial impact of coronavirus. The remaining £3.8m gap this year is to be addressed by reprioritising spending and reserves that will be moved away from their original purposes.

Looking ahead to 2021/22, the Council is currently forecasting a gap of £21.8m, as the impact on Council Tax and Business Rates does not affect the current year but will affect future years. Work has already begun to build on previous efficiency plans to find ways of managing this gap and proposals will come out for consultation later this year. The funding gap will be kept under review during the year as there remains a large number of uncertainties that depend upon the impact of COVID-19 over coming months and the economic fallout.

Councillor Michael Headley, Portfolio Holder for Finance said, "Over the last 10 years, throughout the period of austerity, the Council has been finding ways to become more efficient and make savings. However, the financial impact of COVID-19 goes way beyond what we have previously had to look at. Add to that the unknown potential impact of Brexit and no certainty on future grants from the government, and all councils are finding themselves in a period of greater uncertainty than I've ever known before. We are expecting difficult decisions ahead and with so much still unknown about the course that the coronavirus pandemic will take and the final impact it will have on the economy, we will be keeping a very close eye on the unfolding funding shortfall and doing our best to minimise the impact on local services."

The report on the Council's Medium Term Financial Strategy can be found on the Council's website.