Virus bill climbs to £86m for Fife Council

That’s the bill for the year and even after Scottish Government assistance and identifying money to try to balance the books, they reckon they’re £19m short.

Last month, the estimated cost was £78m and councillors will be told today (Thursday) that it’s gone up due to changes to schools and office buildings, a rise in inflation, staff costs in education and safety measures in construction.

Finance chief Eileen Rowand warned: “Dealing with the emergency and critical responses resulting from the COVID-19 pandemic will have a far-reaching and potentially significant impact on the council’s finances and resources.”

Loss of income from areas like car-parking, school meals and childcare are hitting hard and they’re expecting less money from council tax, non-domestic rates and council rents as families and businesses cope with financial hardship.

Measures to deal with the impact of the virus, such as increased use of Personal Protective Equipment (PPE), IT equipment for staff working from home and school transport, are adding to the financial burden.

In a report to the policy and co-ordination committee, Ms Rowand stated: “The implementation of social distancing measures is likely to increase costs and loss of income is likely to continue in the short- and into the medium-term.

“The associated costs continue to be identified and are estimated to exceed the funding provided by the Scottish Government.”

And although deputy first minister John Swinney has announced that pupils should return on a full-time basis from August, a change from the ‘blended’ approach the council was planning for, this return to near normality “may still result in additional costs in relation to reconfiguration of buildings, staff ratios, school transport changes and health and safety measures”.

At last month’s committee meeting, the council said they had £26.8m to reduce the gap. They’ve now identified a further £18.5m – with £17m coming from both the Housing Revenue Account and General Fund revenue budget.

And Scottish Government ‘flexibility’ will allow Fife to use £17.3m to cover increased costs relating to education and childcare.

Since the last meeting, there’s also Holyrood cash for free school meals and to help communities with food provision, Fife’s share is just over £2m, and there’s £1.8m to tackle “digital exclusion” among children and young people in the Kingdom.

Ms Rowand said they could use balances to try to reduce the £19m funding gap but there would be “financial risks”.

There is also the possibility of getting more money from Holyrood and Westminster.

The Scottish Government is investing an extra £100m over the next two years to tackle the impact of lockdown on schools and pupils but “it is not yet clear how Fife will benefit from this funding”.

And the UK Government are giving £500m to councils to help address pandemic costs and cover lost income.

Scotland’s share, through the Barnett Formula, a calculation used by the UK Treasury to automatically adjust the amount of public expenditure allocated to Scotland, is expected to be £50m but Ms Rowand said details on how it will be distributed are still to come.

She said that the Convention of Scottish Local Authorities (COSLA) were also looking into the possibility of local authorities being able to borrow money for revenue expenditure, defer loan payments and loan interest, and use capital grant funding for revenue costs.