BLACKBURN with Darwen Council will still have a £4million coronavirus hole in its budget by April next year — even if it spends all of its cash reserves, senior councillors have been told.
Members of its executive board will be warned on Thursday that, unless the government comes up with extra money, it may be impossible to set a balanced budget as required by law.
Borough finance director Louise Mattinson says in a report that she and her staff had identified a shortfall of £19.5m between income and spending for the financial year 2020/2021, despite £9.3m of emergency government cash support.
Her report to Thursday’s executive board says that the council has £15.5m in reserves but adds that even if the total amount was spent by the end of March ‘to address the immediate financial challenge’ this would still leave a budget gap of £4m.
Ms Mattinson said the problem was caused by the increased costs and reduced income caused by the Covid-19 pandemic.
She suggests measures to cut the cash gap including a reduction in recruitment and highlights costs avoided as activities or services that have been reduced or stopped due to the virus.
Denise Park, Blackburn with Darwen Council’s chief executive, said: “The Covid-19 pandemic has created a significant shock to the economy and has led to unplanned spending and income losses. This has obviously had a massive effect on the council’s budget and this is an ongoing situation.
“A huge amount of money has been deployed to battle the effects of the coronavirus pandemic on the town and the needs and wellbeing of all our residents is, as ever, our biggest priority.
“Councils across Lancashire, including Blackburn with Darwen, have lobbied the Government hard and have now heard that some desperately needed further funding will be provided which is promising news.
“We are awaiting further guidance however it seems clear that it will not cover the full shortfall.”
Cllr Colin Rigby, the Conservative group financed spokesman, said: “The council has already had a shed load of money from the government with more on the way. Six out of seven portfolios are overspent. They seem to have a problem with forecasting spending.
“They have to have a review and make some hard choices about cuts to services. There is no choice. That is reality.”