Bridgend County Borough Council has estimated that the cost of responding to the Covid-19 pandemic in additional spend and lost income during the first three months of the financial year will be more than £9m.
The local authority estimates it will spend more than £5m in the first quarter of the 2020/21 financial year in response to the crisis.
The additional costs include procuring Personal Protective Equipment (PPE) to support the ongoing delivery of council services as well as the wider care sector, providing emergency accommodation for homeless people and the extra cost of the provision of food to those entitled to free school meals.
It also includes areas such as the provision of support to domiciliary and residential care providers to reflect the additional costs of providing care during the pandemic, and to support their ongoing viability; the provision of supplier relief, paid in accordance with government guidelines, in order to ensure service continuity both during and after the current Covid-19 outbreak; IT infrastructure to enable home-working for large numbers of staff; and the costs incurred to deliver widespread operational changes necessary to ensure the safe delivery of services, for example, the disposal of waste and the delivery of bereavement services
The local authority is also experiencing a significant drop in both actual income in the short term, and forecast income for the medium term.
It estimates that it will lose more than £4m during the first quarter of 2020/21 as a direct result of Covid-19.
Lost income during the lockdown period is the result of the closure of some council venues as well as a reduction in activity in areas such as planning, parking, moving traffic offences, trade waste, registration and school catering.
The Leader, Cllr Huw David, said: “Covid-19 and associated lockdown measures have had significant financial implications for the council in terms of additional costs.
“The £5m additional expenditure is an estimate that is being kept under constant review – and is additional to the cost of business grants which are administered by the local authority, but reimbursed by Welsh Government.
“It is being updated regularly as further pressures emerge – such as assessing the financial impact of a significant increase in the number of applications for council tax support, and efforts to establish effective local ‘test, trace and protect’ services as part of an all-Wales initiative.
“While the council maintains a number of reserves, only some of these are usable with most earmarked for specific schemes and projects.”
The Deputy Leader, Cllr Hywel Williams, said: “While Welsh Government is currently providing funding to meet some of the additional costs we are facing, we do not know whether this will continue to be met in full or not.
“Given pressures at an all-Wales level, the fact that funding arrangements are only confirmed to the end of June 2020 and the likelihood that a number of financial pressures will extend beyond this timeframe, we recognise the risk regarding the ongoing reimbursement of costs from this fund.
“The council may need to draw on the reserves to support these additional pressures, but as the position is constantly evolving in response to Welsh and central Government announcements, it is not possible to put a figure on any potential call on reserves at this stage, nor to predict whether some or all of these will prove to be needed.
“A key consideration linked to the expenditure and income pressure issues encountered during the crisis has been the potential impact on the council’s cash flow.
“With the Welsh Local Government Association (WLGA), local government in Wales has worked collaboratively and positively with Welsh Government to facilitate accelerated payments of the revenue support grant and other grant payments in April and May of this year. This has mitigated the risks for the council and has supported not only expenditure and income pressures, but has also allowed rapid and significant outlay in relation to the payment of business grants which now total £27m.
“We have reviewed the budget on a line-by-line basis to look at where costs can be reduced or removed, where there are likely to be any savings from, for example, building closures, where staff can be redeployed and so on. At this point in time, no employees have been furloughed, although some of our suppliers and partners have done so to protect the business for the future.
“In the next few weeks, we will be reprioritising and considering services where we can make savings, and diverting resources to where they are most needed, and we will bring further updates as the pandemic continues.”