Northumberland County Council hopes to claw back £2million in lost income

Northumberland County Council is hoping to claw back more than £2million of lost income from the Government this year.

Tuesday, 12th January 2021, 2:13 pm
Updated Tuesday, 12th January 2021, 2:13 pm
Northumberland County Council's County Hall at Morpeth

A report to the Monday, January 11, meeting of the authority’s corporate services committee noted that ‘the balancing of the council’s budget is reliant upon sales, fees and charges being generated’.

It showed that this income totalled £66.8million in 2019-20, up from £60.8million the previous year and £56.1million the year before that.

Just under half of the total last year – £32.5million – related to adult social care, with another £16.2million under the local services heading, which includes parking charges, for example.

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Unsurprisingly, the pandemic means that the authority has been unable to generate the level of income expected for this financial year when the budget was set in February 2020.

Cllr Nick Oliver, the cabinet member for corporate services, said: “They (sales, fees and charges) have been impacted by Covid, because if things are closed then we can’t charge for them. There’s been an impact right across the board.”

However, the Government has established a compensation scheme to reimburse councils for some of their lost income.

The scheme involves a 5% deductible rate, whereby the local authority must absorb losses up to 5% of the planned 2020-21 sales, fees and charges income, with the Government compensating the council for 75p in every pound of relevant loss thereafter.

There are a number of rules, which include that it must be transactional income from customer and client receipts, excluding rent, and that it must be ‘unavoidably lost’, ie, factors outside of the council’s control caused the loss to be incurred.

Three returns will be submitted for the 2020-21 financial year, each covering losses for a four-month period. Northumberland County Council received £1.6million from its first claim in September 2020.

The report to councillors stated that the authority expects to recover a total of £2.1million for the full year, with the second return lodged in December 2020 to cover August to November.

The meeting also heard that the Government announced in its Spending Review that the reimbursement scheme would continue into the first quarter of 2021-22.

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