A council which feared the coronavirus pandemic would put its finances in peril has been able to balance its books again – thanks to a £1.3 million Government grant.
Newcastle Borough Council faced losing £634,000-a-month due to plummeting income and the extra costs associated with the pandemic and lockdown.
It sparked a warning that – in the worst-case scenario – formal action may have been needed to address severe financial problems at the authority.
But the Government grant can keep the council going for a few months.
A cabinet report states: “The council actively lobbied, both through our local MPs and through national networks, to press the case for appropriate Government support to address Covid-19 related costs and loss of income.
“Since the last report to cabinet, the council has been allocated additional Government support of almost £1.3m to support its delivery of Covid-related activity and the impact of the pandemic on the council’s income.
“This additional funding is sufficient to return the council to a balanced budget position and ensure that it has sufficient cash to meet its outgoings in the short term.”
The council has also paid out £18.9 million to 1,655 businesses affected by coronavirus thanks to a Government support scheme.
Council leader Simon Tagg said: “The £1.3m from the Government has been announced just at the right time to see us through the next few months.
“We are looking to the future and continuing to lobby to ensure councils get reimbursed for the funding we are spending on the Covid-19 pandemic and its effects.”
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It has been revealed that the council was already facing a £208,000 hole in its revenue budget at the end of March. Issues included the Jubilee 2 leisure centre as well as a drop in income from car parking and planning application fees.
The cabinet report added: “Jubilee 2 is operating at a net overspend. This is predominately in relation to high levels of staff sickness which are required to be covered for and a shortfall in income received by the centre. Income from car parking is below the budgeted amount and this is due to a drop in off-street parking.”
Deputy leader Councillor Stephen Sweeney said: “Jubilee 2 has hit us – it’s fallen off a cliff. Although it shut on March 21 its income was disappearing well before that because of Covid-19.”