Plans made to balance Newark and Sherwood District Council budget as coronavirus contributes to shortfall of £1.174m
The financial impact of coronavirus to Newark and Sherwood District Council is forecast to contribute to a shortfall in budget of £1.174m by the end of the 2020-21 financial year.
The council hopes to recoup at least £400,000 from the government’s income compensation scheme, leaving a deficit of up to £774,000, which the council is determined can be recovered by the end of the financial year — with any excess subsidised from reserves.
Shortfalls in income are forecast to be around £1.5m. The biggest hit is in carparking fees, which is forecast to be a loss of £509,000.
The National Civil War Centre and Palace Theatre is forecasting a net loss of £236,000 and the Newark Beacon business start-up centre predicts a shortfall of close to £100,000.
However, vacant positions in the planning service and additional planning application income are forecasted to generate additional £204,000.
Sanjiv Kohli, director for resources and deputy chief executive, told the economic development committee: “There’s a lot of uncertainty around income and the loss of income.
“The government’s income loss compensation scheme does not cover rent loss, including that we would have earned from our industrial units, The Beacon, Buttermarket and similar lines of income.
“There will be a further impact once the job retention scheme comes to end in at the end of October. That will have impact on benefit claimants and council tax base.
“Unlike other councils, through prudent final management, we do have reserves and balances set aside for a rainy day and, clearly, I think it’s pouring quite heavily out there.
“We will use it to balance our budget next year.”
Mr Kohli said the council was working with county colleagues to review the impact of covid-19 on the Nottinghamshire Business Rates Pool and how the distribution of any surplus it generated would further mitigate shortfalls in the current year’s budget.
“In November we hope to have a more accurate position on funding available going forward and on economic recovery locally,” he said.
Keith Girling, chairman of the policy and finance committee, said the council would not get money back from decisions it had made of its own accord.
He said: “Where we have made decisions for the benefit of our constituents to keep something going, like with the two hours’ free parking and the concession to visitors to the Civil War Centre, we will not get that money back from the government.
“So, it is important we get back to charging again.
“The good thing about this council is we have been prudent and can move quite quickly to cover our bases.”
Committee member Roger Blaney said he hoped the public would be reassured by the state of the council’s finances.
“They are significantly better than may have been feared,” he said. “The challenge is knowing what is happening over the coming months and year plus.
“It certainly is a big unknown at this time.”