Spending ban warning as coronavirus costs council millions

George Roberts

MAIDENHEAD 132704-8

Maidenhead Town Hall, St Ives Road, Maidenhead

The Royal Borough’s finances are in turmoil as a result of the coronavirus crisis, with the council leader warning it is ‘highly likely’ the council will be forced to file a Section 114 notice by the end of the financial year.

Speaking to the Advertiser on Tuesday, Cllr Andrew Johnson (Con, Hurley & Walthams), predicted that the COVID-19 outbreak will cost the Royal Borough about £14million, and revealed that he wrote to the Chancellor of the Exchequer last week, stating that the council was expecting to file a S114 notice ‘within weeks’.

A S114 notice is an emergency measure which bans all new council expenditure with the exception of statutory services for protecting vulnerable people.

The council was granted a small reprieve on Saturday, when Secretary of State for Housing, Communities and Local Government, Robert Jenrick, revealed that £1.6billion would be given to local authorities to help them deal with the impacts of the virus, but the council still expects its reserves to be depleted before the end of the year.

Cllr Johnson said: “I don’t think it’s inevitable (filing a S114). At the moment it’s highly likely, but it’s not a definite.

“We are legally obliged to set a balanced budget, councils can’t run deficit budgets, I can’t propose a deficit budget. If we get to the point where our reserves are exhausted then we will have to look at other options to save costs and to make sure we close the year without going into a negative position.

“We will have to make some very difficult choices.”

With council revenue severely affected in areas like car parking, the borough’s historically low council tax has made it difficult to manoeuvre away from the predicted shortfall.

This year, a Band D property in unparished Maidenhead will pay £1,395.60 council tax.

The equivalent cost in Slough is £1,703.35 and in Reading is £1,976.04.

The council’s reserves stand at about £6million.

The Royal Borough has already received a £3million grant from the Government since the COVID-19 outbreak started, and it is predicting it will get roughly the same amount from the fund announced on Saturday.

On whether keeping council tax low was a mistake, Cllr Johnson said: “No, every council leader in his administration takes decisions that are deemed to be right within the context of making those decisions, it’s fair to say that nobody seriously predicted and planned for a global pandemic.

“What marks us as quite different is that we had quite limited levels of reserves to start with, so others will survive longer but they will undoubtedly reach the same endpoint that we are facing.”

To avoid issuing a S114 notice by year-end, Cllr Johnson hinted at some of the changes the council would need to make.

He said: “I think if we can secure from the Government a reasonable financial package going forward and be granted a bit more flexibility in terms of looking at things like the adult social precept, maybe increasing council tax above the cap to bring us closer to other local authorities but still keeping it relatively low, then there’s every chance we will get through this.

“But it will involve some difficult decisions, I don’t think the world on the other side of this will return to quite the same level of normality as we are probably used to seeing, at least not for the short term.”

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