Covid-19 could cost Camden Council £50m, report warns

Cllr Richard Olszewski. Picture: Camden Council

A report by cabinet member Richard Olszewski said Camden Council could face £50m costs due to Covid-19. - Credit: Camden Council

Camden Council could face £50m costs by the end of the Covid-19 pandemic, a report has warned.

The document, due to be debated by councillors, said the authority had already faced a £19million gap in its finances for 2020/21, despite emergency government funding.

The report, by Labour councillor Richard Olszewski – cabinet member for finance and transportation – says government aid had been “piecemeal” and has failed to cover the authority's coronavirus-related outgoings.

“Despite the government pledge to do ‘whatever it takes’ to ensure the council can meet the urgent needs faced in our communities arising from the pandemic, the funding received so far hasn’t been sufficient,” it said.

“In order to redress the balance, the council has had to utilise £19million of its own resources to make up the difference.”


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Even after suspending non-essential recruitment, Camden ended 2020/21 with reserves “at the lower end of the acceptable range”.

It had been “following a strategy of low reserves”, but that was based on its confidence in its ability to live within its means and deliver savings.

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“The Covid-19 crisis means both of those things are now in doubt over the medium term and we will be operating with a substantial reduction in our financial flexibility,” it said.

The report said the council had already been facing uncertainty due to government plans, including changing the way business rates are calculated.

“The lack of clarity of funding in the medium term means that the council is facing significant uncertainty and risk to its finances, with an estimated budget gap of somewhere between £35-40million by 2025,” it said.

“However, given the level of uncertainty regarding future funding policies and the as yet unknown long-term impact from Covid-19, this figure could be higher.”

The report predicted “recurring pressures” for the next two financial years as a result of Covid-19.

Calculations included IT costs for ongoing remote working, running a business support service and “restart grants”, and a prediction that income levels in the community would not return to pre-pandemic levels until 2022/23.

Cabinet members are due to debate the report on Wednesday (July 7).

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