Covid pandemic costs leaves Town Hall with a £5.3m hole in its finances

Islington looks at how to balance the books

Friday, 10th September 2021 — By Helen Chapman

Islington Town Hall

THE Town Hall is facing debts of £5.3million after covering the costs of Covid-19. Councillors at the policy and performance scrutiny committee last night (Thursday) were told how the cost of the pandemic stacked up to £22.7million.

This had been largely covered by government grants, but a hole had still opened up in Islington’s books.

Finance chief Satnam Gill said ahead of the meeting: “At the end of the year and taking into account what the government are not paying us, there is a £5.3million hole that is not funded. That’s our losses only to do with Covid that are not being funded so we are having to use our reserves to pay for that.”

He added: “It has been difficult and things are steadily getting more difficult. It means that we will not have as much money available for emergencies that we would have had if we had money to pay out. In future years we will need to rebuild our contingencies.”

Cllr Gill said the council is also facing a catch-up programme for the housing building programme which was paused because of Covid-19.

“There are delays to housing building but that delay is not so significant because it will take the next two years to catch up,” he said.

“We are also beginning to see Brexit affect the housing building programme because the costs of steel, bricks, concrete are beginning to build up. We have had a loss of skilled workers who have left and gone back to home countries.”

The council is also losing out on money from lost business rates and housing rents. Cllr Gill said: “When people don’t pay their council rates or business tax it’s next year rather than this year We won’t know of any shortfall until next year. That will hit us in 2022/23.”

He added: “We gave people council tax support, with another £150 off their annual bill, and that significantly reduced debts. We have done that this year as well but in future years we can’t continue to afford to do it. We did it because we recognised the real impact the pandemic is having on people.”

The council is also facing extra costs for adult social services costing £3.3million and children’s services, an extra £3million.

Cllr Gill said: “We will get an additional grant from the government but we will be about £1million short. Adult social care costs have risen because of more people acquiring care. Pre-Covid the total weekly number of hours of home care provided was around 17,000 and now that has jumped to 24,000.”

Related Articles