North Devon Council could ‘run out of money’ in the next two months unless more Government support is granted, councillors have been told.
Jon Triggs, the council’s head of resources, said on Monday, June 1 that he would have to consider issuing a notice restricting all ‘non-essential’ spending unless either income streams recover or certainty over funding is granted by the end of June.
He told the Strategy and Resources committee the Government had provided just over £1m in support, which is not enough to compensate for the shortfall.
He said: “Our latest forecast projection to the end of July is a loss of income of around £3.4m due to a loss of charges and fees in car parks and reduction in collection of council tax and business rates.
“We have had additional costs in housing the homeless, employing agency staff in waste and recycling to ensure rounds are completed, and to shield the vulnerable, of around £600,000.
“So we have around £3.9m budget deficit to July, which assumes incomes sources will then return to normal, which I think they will not. We have received just over £1m in support so we have a projected £2.9m shortfall which will undoubtedly get bigger as the economy slowly returns.
“We only have unallocated reserves of £1.2m so this nowhere near enough to cover the losses. If we use our allocated reserves this will impact and have additional implications for the council as we would have to borrow more to cover this.
North Devon MP Selaine Saxby, who is also still a councillor for the Instow ward, said that Robert Jenrick, Secretary of State for Housing, Communities and Local Government, is aware of the problem that councils face and that ‘support will be coming’.
But Mr Triggs said that certainty was needed by the end of the month.
He said the Section 114 notice would mean spending only on the essential services and to bridge the gap the council ‘may need to look at the services that we can cut back on. We have the reserves to address the gap but that would bring longer term viability issues on the council.’