People in Brighton and Hove are almost £5 million behind with their council tax payments, councillors were told last night (Thursday 3 December).
And firms are expected to owe more than £7 million in business rates by the end of the financial year in March.
The level of arrears was said to be higher than normal, with the fallout from the response to the coronavirus pandemic largely responsible for growing levels of financial distress.
Much of the money – which is paid into Brighton and Hove City Council’s “collection fund” – was due to help pay for services run by the council. But a hefty share also goes towards funding the policing and the fire service.
The council’s acting finance chief Nigel Manvell briefed the council’s Policy and Resources Committee at a “virtual” meeting yesterday.
He said that more people were eligible for help with their bills or qualified for exemptions – consistent with more people losing their jobs.
And more firms were going out of business, leaving properties empty, Mr Manvell said.
All these factors left the council facing an £11 million shortfall from council tax and business rates alone as officials also wrestled with higher spending during the pandemic.
Mr Manvell said that the government had announced a further £4.7 million in emergency funding for the council, helping to plug the “budget gap” in Brighton and Hove.
When he last briefed the Policy and Resources Committee on the council’s financial position, it was facing a shortfall of at least £8 million.
Since then, the government cash and lower than expected losses have left the financial picture looking tough but more manageable, although the outlook was still uncertain.
Mr Manvell said: “There do remain a number of ongoing risks while the pandemic remains with us. But this is a very good situation compared with the early forecasts in April and May.”
He said that “unusual measures” – such as reducing casual staff’s hours and furloughing some staff – had helped to bring costs down.
Green councillor Tom Druitt said that the improvements were down to council officers “working a few miracles along the way”.
They had looked out for every single pound spent across the council and as much government support as they could claim.
He said: “It’s an improvement that none of us could have dared hope for. There’s a huge amount of thanks due to all the officers involved for a massive effort over the last few months to get control of this.
“The projected overspend (in July) was over £16 million. To bring that down to zero in three to four months is really quite astonishing.”
Conservative councillor Joe Miller praised officers for saving the city from massive deficits and producing the best forecast in years.
He added: “I welcome the substantial government and taxpayer support that we have received.”
Labour councillor Daniel Yates said that he was pleased to see the council’s income recovering more quickly than originally thought.
He said: “It is very good to see the additional funding we have been able to squeeze out of the government, despite their protestations that no further funding was coming – and despite their original promises that all (covid) spending would be covered.”
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