The latest review of Chelmsford City Council's finances reveals that the gap has now widened to £9.5 million, compared to the balanced budget that was set in February. A month ago, the gap was looking like £8.6 million, even after allowing for some funding from the Government, and it could rise further.
The financial picture is laid out in a comprehensive report to the City Council's Cabinet meeting on 8 July. The report attempts to look at prospects for the next five years, and makes estimates in the light of the enormous blow dealt to its funding by the coronavirus pandemic.
The pandemic has had a major impact on the finances of every local authority in the country, as cash from theatres, events, car parks, properties and leisure centres has vanished, while extra spending had to be found to help with pandemic management. The cash from these charges make up over half of the Council's total income and pays for services like emptying bins, recycling collection, street cleaning, housing the homeless and community safety.
Councillor Stephen Robinson, Leader of Chelmsford City Council, said, "Almost 15% of the council's annual income has vanished. This huge shortfall can't easily be fixed just by 'cutting back a little' - it's a real threat to the most vital services we provide. At the start of the crisis, the Government told councils to step up to help our communities and we did - like we always do. The Government said they would do everything needed to get us through this crisis. Now they need to stick to that promise and support local councils.
"The City Council only receives 11% of council tax and 4% of business rates, and very little Government funding in an ordinary year, so to compensate for this lack of income we will need support from the Government."
Councillor Chris Davidson, Cabinet Member for Fairer Chelmsford, said, "Before the pandemic, Chelmsford City Council was in a relatively strong financial position, so we are better placed than some councils in other areas, who are now really struggling. We will do everything we can to mitigate the impact of this crisis on our residents and keep our most essential services running, but it is an extremely difficult situation. Without significant extra Government support, the Council may be unable to provide residents' most basic and vital services."
Councillor Marie Goldman, Cabinet Member for Connected Chelmsford, added, "I would like to thank the wonderful residents who have shown how much they care about local services since the scale of the financial problem became clear. We have received suggestions through Facebook for raising extra funding to keep services going, from people kindly offering to litter-pick their neighbourhoods to ideas for running events during lockdown. These are difficult times for everyone and it's good to know that Chelmsford stands together in protecting the services that help our most vulnerable."
The full agenda for the meeting has just been published at www.chelmsford.gov.uk/cabinet-meeting
Tuesday 30 June 2020