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COVID-19 increases Council's budget pressures

29 May 2020

Budget pressures from COVID-19 are set to increase the County Council’s £38.9m budget gap next year.

The Council was already predicting a £38.9m gap next year, on top of planned savings of £21m, due to pressures on key services like adult social services and children’s services.

it expects COVID-19 will increase this total, although it cannot predict the full impact at this stage. The projected budget gap up to 2024/25 is £117.8m, on top of planned savings of £64m.

It is currently forecast that coronavirus will cost the council £63m in 2020/21, in terms of increased costs of supporting vulnerable people, loss of income and savings that can’t be delivered. The Government has provided £43m, leaving a shortfall of £20m.

Councillor Andrew Jamieson, cabinet member for finance, said: “We’re doing everything we can to support people during the coronavirus pandemic but there is no doubt that this will increase the pressure on next year’s budget.

"We were already lobbying the Government for sustainable, fair funding and the pressures presented by COVID-19 have made this even more crucial.

“I’m encouraged by what ministers have said about further COVID-19 support for councils and a desire to resolve the future of adult social care. This needs to happen, or we will face difficult decisions to balance the books.”

The Council’s report says: “The council has been well positioned to respond to the major challenge of coronavirus, even though this unprecedented situation will inevitably have a significant impact on the Council’s budget in both 2020-21 and future years.

“The implications of the COVID-19 response, coupled with continued uncertainty and the further delay of a number of the significant planned reforms for local government finance, represent a major challenge for the council in developing its medium-term financial strategy. As discussed in this report, the level of the budget gap to be closed in future years is subject to substantial uncertainty and there are a number of issues which could have a material impact on the level of resources available to Norfolk County Council to deliver services in the future.”

The Council will develop next year’s budget plans through the summer and autumn and won’t receive confirmation of its funding allocation from the Government until the autumn at the earliest.

Departments will review services, in the light of how they have been operating during the pandemic – for example, if use of buildings can be reduced and increased use of online services.

Cabinet will consider the reports at its virtual, online meeting at 10am on Monday, 8 June. The reports, which include a link to view the meeting on 8 June, are available on the council website.

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