Town hall bosses have been left short by £4.5 million after more people claimed council tax relief as their incomes fell during the coronavirus pandemic.
Brighton and Hove City Council’s shortfall was 25th highest “collection fund” deficit out of 309 English councils, according to figures released by the Ministry of Housing, Communities and Local Government.
The figures were an improvement on a forecast by the council’s acting finance chief Nigel Manvell last December.
Mr Manvell predicted a combined shortfall of £11 million in council tax and business rates as firms going bust left properties empty.
At the time, he told the council’s Policy and Resources Committee that more people were eligible for help with their council tax bills or qualified for exemptions because people were losing their jobs during the pandemic.
The position was a dramatic improvement from last July when Mr Manvell warned that the council faced a potential £49 million black hole in the town hall finances.
The bleak picture was a cautious forecast as adult social care costs soared and the council picked up a £500,000 a month bill for personal protective equipment (PPE). At the same it was losing income from parking and events.
By the end of the financial year, the council’s general budget was underspent by £4.8 million. This was attributed to a mix of extra government grants and lower spending. But there was an £8 million combined deficit in council tax and business rates.
The council is due to receive a £4.5 million government grant towards its combined collection fund deficit for the 2020-21 financial year, which ended in March.
Green councillor Tom Druitt said: “The pandemic has presented many challenges for the finances of residents and the council.
“Like many councils, Brighton and Hove City Council has received less taxation than it expected to – due, primarily, to delays to housing developments being completed across the city, increased numbers of people needing to claim council tax reduction benefit, increased numbers of businesses failing and reduced numbers of start-ups and an impact on collection performance due to more people and businesses experiencing financial difficulties and falling into arrears.
“The government has given some one-off funding to help councils cope with these losses and enabled us to spread these losses over a three-year period which gives us some breathing room.
“Government funding compensated 75 per cent of lost income in Brighton and Hove. This of course helps but did not fill the gap.
“National analysis also suggests that other councils are in a similar position, with a recent public report showing most councils still expect to make cuts.
“We know there are still challenges to come and we want to keep our city on a secure footing.
“After more than 10 years of cuts to council budgets from government, councils are still having to work hard to maintain services for residents, particularly in adult social care.
“So while short-term covid grants have proven vital, we continue to lobby for a long-term financial settlement for councils in order to plan for services well into the future.”
Could the million pounds a year in lost revenue caused by closing so many parking spaces have also contributed to the shortfall?
What about the Millions of Pounds owed to the Council and therefore Council Tax Payers by i360Ltd?
Looks like Nigel Manvell went to the Diane Abbott school of accountancy.
He forecast a £49m deficit that became £11m.
Labour and the Greens will love him and appoint him permanently soon.
I’ve personally received no help with my council tax arrears, I emailed loads and they hit me with a blank email with a link to a service I’ve already tried to use.