Cheshire East estimates coronovirus has already cost council £60m

Cheshire East Council is joining other local authorities in pressing the government for significant additional funding to meet the rising costs of combatting Covid-19.

It comes as the council revealed that the impact of coronavirus could already be £60m and says its resources are being stretched to the maximum.

Like many councils, Cheshire East continues to face increased costs and demand pressures at the same time as seeing a huge drop in income which it says is unsustainable.

The Local Government Association (LGA) has welcomed the extra funding that councils have received from central government to date but said local authorities will need 'up to four times' the funding they have been allocated so far. The County Councils Network (CCN), which includes Cheshire East, is also seeking greatly increased financial support from the government.

Councillor Amanda Stott, Cheshire East Council cabinet member with responsibility for finance, said: "The priority of this council is to keep the public and our staff safe. But this has come at a significant financial cost that goes far beyond additional funding provided by central government to date.

"Covid-19 leaves Cheshire East already facing financial pressures of £60m. And we are not alone. All councils face finding many millions of pounds due to the soaring costs of dealing with the pandemic, as well as huge falls in council income streams.

"Throughout the lockdown, Cheshire East has been spending millions extra on providing adult and children social care, providing PPE and housing rough sleepers. All services are affected, including increased costs of running services such as highways and waste, due to the need for social distancing and new health precautions. On top of this, the council is losing significant amounts in lost revenues from council tax, business rates, parking income and leisure/culture fees.

"In the case of kerbside household bin collections, for example, the council has kept these operating as normal. However, this has come at additional cost due to the need to maintain social distancing, train redeployed staff to replace those unable to work due to Covid-19 and provision of personal protection equipment for our collection teams – such as disposable gloves and hand sanitiser.

"Although the government has provided extra funding to combat coronavirus, this has not been enough. The government has given comprehensive protection to the health service and businesses and we want to work with government to deliver the same for councils.

"Cheshire East, alongside the LGA and CCN, is pressing for significant additional financial support from the government to enable councils to fund the full additional costs of combatting the pandemic and keeping people safe.

"After all, it is local councils, such as Cheshire East, which are providing the vital local services that are supporting communities through this crisis and the national effort to beat this deadly disease."

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Cheshire East Council
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Comments

Here's what readers have had to say so far. Why not add your thoughts below.

Paul Millett
Wednesday 27th May 2020 at 4:41 pm
Does the council have no financial reserves for emergencies such as this?
Simon Worthington
Thursday 28th May 2020 at 8:03 am
This has cost the council and government nothing. They don't have any money. It is our money and our children's money and future. Hence the profligate waste.
Julian Barlow
Thursday 28th May 2020 at 3:08 pm
CEC has experienced the same consequences as every other business, organisation and individual. However, there is a fundamental difference in that up until recent events, CEC have had the benefit of knowing exactly exactly what their income would be. Their
customers cannot shop around for alternative suppliers, or opt out completely. CEC receive their income regardless of the quality of service they provide.

If they haven't made provision for a situation like the one we're currently experiencing, it can only be down to poor management and bad financial planning.
Nick Jones
Thursday 28th May 2020 at 6:05 pm
An ideal opportunity for CEC to reign in the unnecessary, unwanted, underwhelming spendthrift PCC who consumes our increased taxes for no benefit whatsoever. Get rid.
Mark Goldsmith
Friday 29th May 2020 at 9:19 am
Cheshire East’s reserves were £12m before this global crisis.

That’s because councils were told by the Cameron/Clegg government to stop sitting on large sums of reserves. They thought it was money doing nothing that could be used to maintain services or reduce council tax increases instead.

That’s okay for most years as council revenue and expenditure is fairly predictable. However, these are wildly extraordinary times. With the extra expenditure described above, council revenues have also taken a sudden fall too. Higher unemployment from this crisis has meant more people claiming Universal Credit. This means they don’t pay council tax, while Cheshire East funds their housing benefit too. It’s an unprecedented double whammy that no one could have predicted.

However, unlike business, it is illegal for councils to borrow money to fund this shortfall. Nor can it ask shareholders for funding like a company can. Also there is a legal cap on how much council tax can rise, so we cannot increase prices as we see fit either. Added to this councils cannot diversify its services, focus only on profit and abandon its loss making parts, expand into new territories, nor increase revenue by grabbing market share off its competitors.

Therefore, comparing councils to companies is deeply flawed and superficial. The bottom line is that councils cannot be run like companies.

This means the only options available for Cheshire East to fill this funding gap is either a massive cut in council staff and services, selling its (your) assets at rock bottom prices or else by the government making up the shortfall (national government can borrow to fund services but local government cannot). Hence why we have asked the government for extra fundIng rather than the alternatives, which almost no one wants to see.

Finally, the Police and Crime Commissioner is totally independent from the council and is funded by Cheshire Constabulary. Therefore, Cheshire East has no control at all on what they do or spend.

Best regards

Cllr Mark Goldsmith
Residents of Wilmslow
Wilmslow West & Chorley
Raymond Walker
Friday 29th May 2020 at 12:53 pm
Since the Council have stuck their necks out by quoting a sum of £60M expenditure, they must now broadly itemise where this amount of expenditure has gone, so it would be nice to see a published list.
The Council used to have outgoings on properties such as Cypress House, Handforth as recite care centres. These were closed when a deliberate shift was made to privatise all council care facilities. The property is still vacant so would not be difficult to reopen. The loss of cottage hospitals that were efficiently run, yet not admitted so by blinkered bureaucrats was a loss to the community and a certain amount of reinstatement would be welcomed.
Cypress House still stands and needs to be reopened. When that happens the Council can talk to us about expenditure in its use for Covid patients.
John Gibbons
Friday 29th May 2020 at 4:29 pm
Same story across Greater Manchester councils too. Despite the obvious, some people still think local services should be provided by big businesses who are, of course, not asking for financial help from central government to keep their businesses afloat.