Rother councillors concerns about post-pandemic finances

The comments came at a virtual meeting of the council’s audit and standards committee on Monday (May 18), where members discussed a series of reports on the financial position and audit process.

During the meeting, several councillors raised concerns about what impact the pandemic would have.

Among those to raise concerns was Cllr John Barnes (Con). He said: “Clearly what is very worrying about this situation is what is likely to happen to the council’s finances.

“It is not only the risks from the government changing its mind, but we are going to face some double whammies both in terms of possible additional expenditure and [income].

“Business rates are going to be knocked sideways, council tax is also going to be affected. I think we are in quite a difficult financial situation and I am wondering if we have rated the risk quite as highly as I think we should.

“I suspect we are already overspent by the tune of three or four million. I suspect by the end of the year our revenue is going to look pretty cockeyed. 

“I am wondering how we begin to get a grip on the problem, let alone benign to see how we lobby the government to solve it.”

In response to Cllr Barnes’ comments, council officers confirmed the authority had lost income of around £3m since the beginning of the lockdown.

They said work was underway to start bringing income back into the council, while losses in some other areas – such as the reductions to business rates – were expected to be covered by government grants. 

However, they also warned that the wider picture would be likely to have an impact on the council’s own long term finances, for example businesses going bust leading to the loss of business rate income.

Officers also confirmed that the council’s unallocated reserves would likely have to be used to mitigate the effects of covid-19. This is significant, officers said, as the council had intended to use a large part of this money to stagger cuts to council services.

The use of these unallocated reserves saw some concerns raised by Cllr Eleanor Kirby-Green (Con).

She said: “It alarms me [because] we are in a good financial situation, in that we have been able to put away an awful lot into reserves over the last eight or nine years. 

“I am concerned we will be penalised as a council for doing the right thing and having reserves, whereas other councils, who maybe haven’t been as prudent as us, will get more bailouts from the government.

“I just want some reassurance that we will not be penalised for being in a good financial state in terms of reserves.”

During the meeting the committee also agreed to postpone the authority’s internal audit planning until it has a clearer picture of its post covid-19 finances. The committee is expected to meet again in June to revisit the issue.