East Renfrewshire Council faces £13m budget shortfall due to coronavirus

Spending has increased as the council has responded to the pandemic while income has dropped since lockdown restrictions were imposed in March.

The council will receive £4.4m of a £235m funding allocation from the Scottish Government to local authorities.

But “the additional full year Covid-19 pressure” for the authority “is currently estimated at £13.9m”, a report to councillors reveals. It adds “under a worst-case scenario” that figure could rise to £17.5m.

A potential “Covid related” shortfall of between £9.5m and £13.1m is expected.

The Convention of Scottish Local Authorities is lobbying the Scottish and UK Governments for more money.

New financial flexibility, including borrowing powers, is being sought at a national level. This would allow pressures to “be spread over a longer period”.

Councillors will be asked to note the “significant budget gap” for 2020/21 at a meeting today (Wednesday).

Members are also being asked to agree to use some of the £1.875m extra Scottish Government grant money, which was confirmed in late February after the government set its budget, to cover £1.28m of unallocated savings in the council’s own budget.

Council departments are expected to be told to halt all non-essential spending with immediate effect. Directors are set to work over the summer on proposals to address the shortfall.

Extra costs have included providing support for those who are shielding, delivering free school models and offering childcare to children of key workers and those who are vulnerable.

The council has also needed to cover IT costs to enable home working, buy PPE and administer business grants. In some areas, such as utilities and food, costs have decreased.

The report by the council’s Chief Financial Officer, Margaret McCrossan, states the authority and East Renfrewshire’s Culture and Leisure Trust “rely heavily” on external income, which has been lost due to the closure of facilities such as gyms, swimming pools and halls.

It also reveals income from Council Tax is expected to fall as “levels of unemployment rise”.

Additional costs are expected during the recovery from the pandemic too.

“Costs are likely to change significantly as we move through the recovery phases and councils adapt and redesign services accordingly,” the report states.

“There are also many unknown factors including the timing of the recovery phases, the impact on the wider economy and public behaviour and the potential impact of any future peaks in the outbreak, leading to further restrictions.”

Schools will need to be redesigned to make them safe for children and all facilities will require more cleaning, resulting in higher staffing and material costs.

The Covid-19 shortfall has been included in overall monitoring of the council’s budget. With the government grant increase and “minor variances” on normal expenditure, the end of financial year shortfall is forecast to be £8.55m.

Reported figures do not include the cost of the pandemic for the East Renfrewshire Integration Joint Board, which directs the East Renfrewshire Health and Social Care Partnership between the council and NHS Greater Glasgow and Clyde.

Around £890,000 has been allocated to East Renfrewshire’s IJB by the Scottish Government.

Total costs are expected to reach around £9m, with a significant chunk spent on social care, but: “The IJB expect Government funding to cover these costs”.

The council’s spending on capital projects will also be affected by the pandemic, with work on sites suspended, projects delayed, and costs set to rise due to new ways of working. The impact of this is currently being assessed.