Coronavirus crisis could cost Derbyshire County Council more than £120 million

The coronavirus pandemic could cost Derbyshire County Council more than £120 million – a fifth of its entire budget.

A month ago the authority said extra costs caused by the virus outbreak stood at £32 million and were set to rise to £50 million as a 'best estimate'.

But this has now increased by more than double, with the authority potentially facing 'drastic measures' to balance its books.

Now, ahead of a meeting of the council's Conservative ruling cabinet next week, the authority says the pandemic could cost the authority £120 million.

It says the impact up to June – combining extra costs and a loss in income – is £30 million.

In a 'worst case scenario' the council could see a further £60 million hit caused by paying local care providers extra fees.

The council has already spent £7.5 million on personal protective equipment, largely for care staff, but the authority says this could nearly triple to £20 million.

Council tax shortfalls – caused by Derbyshire's districts and borough's relaxing payments during the crisis – could cost £10 million.

All of these estimated figures depend on monthly cost and income shortfalls maintaining at their current rate and do not account for a potential second spike of the coronavirus outbreak.

The council is already saying that the cost of support for vulnerable children – a core statutory and legal function of the authority – is to spike following the relaxation of lockdown.

It is hoping the extra costs will be covered by the Government.

Peter Handford, the council's finance chief, said: "As the year progresses the likely position on these costs will become clearer and the Government will be expected to contribute significant further sums to avoid councils taking drastic measures to ensure they remain financially sustainable."

On costs for supporting children in care, he says: "Whilst the figures quoted assume that costs will be triggered in the three-month period to the end of June, higher levels of expenditure will be incurred well beyond this timeframe.

"Evidence from other countries that have relaxed lockdown is that there is a spike in the numbers of children needing the support of social care services, therefore these costs will not be unravelled on July 1 even if normality is resumed at that date."

If the council has to commission places for children with private providers these costs will be 'significantly higher'.

The authority has now received £37 million in grants from central Government to cover the extra costs of the pandemic – with officials saying they will not compensate local authorities for all costs, particularly those above and beyond statutory duties.

Mr Handford now says the authority only has £5 million in grant funding left.

The authority has already said it faced an 'extreme' and 'almost certain' risk that it would not be able to meet its required budget cut targets, with front-line services on the line.

Papers released last week said: "In the event that the authority does not develop sufficient and timely proposals to deal with the ongoing or further reductions in funding/resources, there is a risk that the need to close the funding gap may result in identifying measures for unplanned reductions in service spend leading to deterioration or interruption of front line service delivery."

To balance its books, the council was already trying to make cuts of £65 million or more by the end of the 2024 financial year.

It has already had to delay many of the proposed cuts until after next year's council election.

The authority had planned to make £33.4 million in cuts this year but in January reduced that to £19 million and delayed further cutbacks to 2022 onwards.

Yesterday (Thurs), a fire destroyed Harrington Junior School in Long Eaton, which is maintained by the county council, and must be replaced.

This will prove to be another substantial pressure on the council's struggling finances.

The most recent new school plans from the county council – with 210 places in Littleover – are to cost £6.2 million.

In January, the county council said it still had a £150 million school repairs backlog but that it was receiving just £7.7 million from central Government to support this (five per cent of the total).

The council had said it was at risk of not being able to uphold its legal duty to maintain the upkeep of hundreds of schools.

Another currently unknown cost to the council is the price of school transport under coronavirus social distancing restrictions.

School buses will only be able to cater for a quarter of the usual number of students to maintain this distancing – meaning many more vehicles are required.

This is cited by the council as an additional cost which forms part of the pandemic recovery strategy which is 'yet to be costed'.

Schools are due to reopen on Monday (1 June).