FINANCE

EXCLUSIVE: Districts braced for lost income

Woking, South Norfolk and Craven DCs are likely to be the hardest hit when it comes to lost income.

Woking, South Norfolk and Craven DCs are likely to be the hardest hit when it comes to lost income.

The three councils top the list of districts when it comes to the ratio of income from fees and charges against their service expenditure, and are likely to suffer from a loss of income from services such as parking and leisure while the public is in lockdown.

Figures from the Chartered Institute of Public Finance and Accountancy's resilience index give an indicator of how reliant councils were on income from fees and charges last year.

Those authorities with a high percentage of their income generated locally – as the Government encouraged them to do – were seen as ‘low risk' as they were less reliant on fluctuations in central Government grants.

However, those ‘low risk' authorities are now exposed to a sharp downturn in income as the public is forced to steer clear of town centres and attractions, and as development stalls.

Woking's finance director, Leigh Clarke, said the council had a ‘positive programme of investment, earning rental income to support services. ‘Clearly with coronavirus, a proportion of this income is at risk,' she said.

‘Providing some degree of normality returns during the second half of the financial year, a combination of support offered by Government, the use of some reserves and, hopefully, with Government permission, the capitalisation of any significant deficit, will avoid the need for service reduction.'

Leader of South Norfolk DC, Cllr John Fuller, told The MJ: ‘Taking a lead from successive Governments we have pivoted our council to generate significant income from trading.'
For his authority, the income includes money from leisure provision and house building.

He added: ‘We are engaging on an in-year re-budgeting exercise as well as recasting our medium-term financial plan with a background of significant reserves to allow us to ride the crisis.'

Craven DC chief executive, Paul Shevlin, said: ‘District councils have been the most severely affected by cuts in Government funding over the last 10 years, and we have also been very badly affected by the current crisis.  

‘While the council is suffering due to this loss in income, we are determined to continue serving our residents.' Other types of authority are less exposed.

The London boroughs with the largest proportion of income from fees and charges to expenditure ratio are Kensington & Chelsea LBC (35%), Westminster City Council (28%) and the City of London Council (25%). Of the counties, Staffordshire CC (15%) and Northamptonshire CC (12%) will be hardest hit, but face few losses compared with districts. 

Ratio of fees and charges to  service expenditure

Authority %

Woking BC

70.32

South Norfolk DC

64.73

Craven DC

51.16

Wycombe DC

50.2

Mole Valley DC

48.05

North East Derbyshire DC

47.45

Kings Lynn & West Norfolk BC

45.64

Horsham DC

43.49

West Dorset DC*

43.36

New Forest BC

43.2
* Now part of Dorset Council

FINANCE

Fixing councils' financial distress

By Andy Pike | 20 November 2024

Andy Pike and Jack Shaw examine the reasons for local authorities’ financial challenges, and say it’s time for a set of principles, including the power to ma...

FINANCE

EXCLUSIVE: Former minister raises concerns over standards reform

By Dan Peters | 20 November 2024

Former local government minister Bob Neill has expressed concerns over proposed reforms that could allow the suspension of councillors who violate codes of c...

FINANCE

Radical care revision

By Amy Long | 14 November 2024

Small actions can make a big difference to ensuring resources are used well and that residents get the right support when they need it, say Ruth Luscombe and...

FINANCE

'Write off the debts or reorganisation will fail'

By By Heather Jameson | 13 November 2024

The Government will need to write off the debts of failing councils if they want reorganisation, a prominent county leader has claimed.

Heather Jameson

Popular articles by Heather Jameson