'Furlough end may impact on council tax and business rates income'

DMBC finance chief Debbie Hogg said the council can ‘largely manage’ their budgets into the next financial year as Government Covid-19 relief money is allowed to be rolled over to help with monetary pressures.

But the director of corporate resources said council tax and business rate income was being carefully watched and cited the end of furlough could potentially mean more redundancies and businesses going under.

She said the situation in terms of council tax and business rates income will become clearer towards the end of the calendar year.

“We’ve looked at the costs but we’ve also want to understand the implications arising from Covid-19. I also wanted to gain an understanding of what the underlying issues were for our normal management of accounts.” Ms Hogg said.

“We have got underlying issues, we’ve got overspends in children’s services and some underspends in adult services.

“When you bring those together, it’s enabled us within 2020/2021 we can largely manage our financial position. The funding from Government enables us to carry forward money in order to manage the loss of income through council tax and business rates.

“They are our biggest vulnerability going forward into the next financial year because we haven’t got a lot of information to hand at the moment so we need to keep monitoring them.

“As the likes of the furlough scheme unwinds, there may be more redundancies and people may have more challenges in paying council tax and possibly businesses folding as well depending on the economic climate.

“The two big areas in terms of our long-term finances is keeping a close eye on business rates and council tax payments."

Central government has provided around £21.8 million in Covid-19 pressures funding to date.

The Council was forecasting an outturn projection of a £13.3m overspend before the allocation of Covid-19 emergency grants. This is largely due to the effects of and response to the Covid-19 global pandemic before Government intervention.

Reports show that planned savings for 2020/21 are off track with £3.4 million delivered leaving a shortfall of £5.3 million.

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