Borough council dips into reserves to counter costs of Covid

Finance chiefs at North Warwickshire Borough Council have had to divert nearly £450,000 from their cash stockpile to help offset the cost of Covid.

Director of finance Sue Garner explained that although government grants had helped, the council was still out of pocket.

She ran through the figures during this week's resources board meeting after Cllr Jacky Chambers (Lab, Dordon) asked for a breakdown of the numbers.

Ms Garner said: "It has proved quite a complex issue of trying to pull together the additional costs for Covid and also the additional grant funding we have received.

"In general terms we have received an unringfenced grant of over £1m which we have used to support some of the services where we have had additional costs. An example is given in the paragraph [of the report] relating to refuse and recycling."

The report considered by councillors explained that refuse and recycling employee costs increased by £315,230 due to the use of more agency staff to cover additional rounds and staff absences as a result of the pandemic.

There was a further increase of £243,150 due to an increase in the recycling costs and the delay in introducing the green waste collection charge also cost the council.

These sums were covered by a one-off Covid-19 grant of £867,830.

Ms Garner added: "We are able to claim some of the lost income. The government scheme unfortunately doesn't allow us to claim all of it back but we can claim 75 per cent.

"As a rough rule of thumb, you can see [in the report] that we have included the use of earmarked reserves at just under £442,000 in 2020/21 so that gives an indication of some of the additional costs we are picking up as a result of the additional expenditure incurred this year. A large part of that relates to additional Covid expenses and lost income."

Figures for the coming financial year show that the council plans to use a further £300,000 from earmarked reserves after taking into account Covid-19 grants of £441,420 which were announced by the Government in the draft financial settlement.

Cllr Chambers said: "I think it is important that we understand the extent at which we, as an organisation, are being supported by government or not."