Focus remains on taking care of residents as Cabinet reviews financial impact of coronavirus

Camden Council has pumped millions of pounds into a whole community effort to combat the coronavirus and look after its residents during the ongoing crisis.

The council has received over £19million in grants from Government to assist in getting all people rough sleeping off the streets and into accommodation where they can isolate and get help, to support care homes in the borough and to increase its Council Tax hardship fund, which includes emergency payments and three month ‘Council Tax holidays’ for residents on the lowest incomes.

The council is also investing in voluntary and community providers, introducing a food delivery programme and bolstering support to residents who are shielding and those who are most vulnerable.

Extra costs is just one factor in the mounting financial pressure the council faces. The council will now not be able to realise this year’s savings as set out in its Medium Term Financial Strategy in the original timeframe indicated, while it also estimates it will not receive £44million of usual income due to decisions to not charge for certain types of activity.

Income lost results from decisions including that to suspend parking charges for key workers and also a reduction in Camden’s economic activity meaning income from licensing of events has not been realised. The council has also experienced delays in receiving rent from commercial premises.

In total it is estimated that the council could face an additional financial pressure of over £60million in the case of responding to the coronavirus over a six month period. While the council acknowledges the funding it has received from central government, this is unlikely to bridge the gap entirely or help meet the ongoing costs the council will face. The council awaits further information from central government on how it will assist the council to deal with the funding gaps caused by the response to the coronavirus.

The council’s Cabinet is set to review the report on its finances at its meeting on Wednesday, 13 May 2020.

Councillor Richard Olszewski, Cabinet Member for Finance and Transformation at Camden Council, said: “Our principle throughout this crisis has been that no-one in Camden will be left behind as a result of this virus – and our financial response has been to support the most vulnerable in our communities. Securing hotel accommodation to get people rough sleeping off our streets into a safe place where they can self-isolate. Council Tax holidays and emergency payments for families who have seen their income disappear. Grants and partnerships with our fantastic voluntary and community organisations to deliver food, and specialist interventions to help those experiencing domestic violence.

“No industry will be immune from the financial impacts of the coronavirus – and it is clear there are tough economic times ahead. What is particularly concerning for local government and our residents is that we have borne the brunt of ten years of austerity and have already had our budget from Government cut in half. If this crisis has proved anything is that frontline services need proper investment – and Government will need to step up to the mark on this. The sacrifices our care staff have made cannot be in vain.

“Even if we do get the Government investment required, market conditions have changed and we face new and complex societal pressures – so we will have to adapt and deliver some of our services and projects in different ways. However, I am certain that through the ingenuity, creativity and sheer determination within both the public sector and also our business, voluntary and community partners, we can continue to deliver for our residents and play our part in transforming society for the better.”

Cabinet agreed a Medium Term Financial Strategy in December 2018 that sought to provide the financial framework for the three years from 2019/20 to 2021/22. The programme was developed to address a projected deficit of between £35-£40m over the three year period and included approximately 100 projects saving over £30m by 2021/22. This followed a period of eight years where the council had been obliged to make an unprecedented £169m of savings and to reduce its workforce by 23% - 1,140 full time roles.

Camden Council considered the budget for 2020/21 in March 2020, in which it recognised that despite being in a strong position financially for 2020/21 and 2021/22, significant medium term financial risks were needed to be managed - specifically the uncertain funding outlook for local government and risks in adult social care and health integration, children’s’ services and special educational needs (SEN) and wider school funding pressures.