North Yorkshire County Council may have to use funds reserved for major projects in order to balance its books amid the coronavirus pandemic but can avoid bankruptcy, says the authority’s leader.
Speaking to The Stray Ferret, Carl Les said the county council had enough reserves to see it through the pandemic if no funding was forthcoming from government.
However, it could mean major projects – such as improving broadband across North Yorkshire – have to be put on hold.
Cllr Les said the council has around £50 million held over for a “rainy day” and faces a deficit of £42 million due to coronavirus.
Both the county council and Harrogate Borough Council face combined shortfalls of £57 million as a result of responding to the outbreak and loss of income.
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The authority had reserves, both emergency and investment, that could cover its costs from responding to the outbreak. But, Cllr Les said, some of that cash was earmarked for major projects such as improving broadband in the county.
North Yorkshire County Council leader, Carl Les
He added the authority would not need to issue a section 114 notice, which is tabled by finance officers in dire financial circumstances, nor would it need an emergency budget. He said:
“The county council has been very prudent in putting money aside for a rainy day.
“But what worries me is using the development costs.”
It comes as the government announced a further £500 million support package for local councils today to help with spending pressures.
The County Council Network had previously called on ministers to provide further financial support for councils who may need to use up reserves to cover coronavirus shortfalls.
Funding allocations have yet to be revealed, but the scheme is expected to reimburse authorities for lost income and allow council tax and business rates deficits to be paid over three years instead of one.
Simon Clarke, local government minister, said today:
“Since the start of this pandemic, local councils have been at the forefront of our national effort to tackle the virus, and they will continue to play a significant role as we look towards our recovery.
“We are more committed than ever to unite and level up this country and this package will ensure councils have access to vital, additional funding so they can continue to serve their communities as they so admirably have done to date.”
