Oxfordshire councils update Government on financial impacts of coronavirus

Published: Wednesday, 22nd April 2020

The leaders of all six Oxfordshire councils have written a joint letter to Government and the county’s MPs setting out the scale of the financial impact of the coronavirus (COVID-19) situation across the local authorities.

Looking across the costs of delivering additional services, spend on emergency suppliers and the significant impact on normal income streams, the councils anticipate the negative financial impact of the virus in the 2020/21 financial year will be around £100m, with expected knock-on impacts in future years. 

To date, Government has allocated £14.9m in additional funding to councils in Oxfordshire, and only £0.3m of this for the District and City Councils. 

The six council leaders welcomed the announcement on 18 April of an extra £1.6 billion to councils across England, but urged the Secretary of State for Housing, Communities and Local Government, Rt Hon Robert Jenrick MP, to ensure further Government support is provided to meet the funding shortfall. Without this support, authorities across Oxfordshire will become financially unsustainable with depleted or no reserves, and some could be unable to set a legal budget for 2021/22.

The six councils have made rapid adjustments to redeploy staff to meet new areas of high demand, in particular taking significant action to protect and support vulnerable people across Oxfordshire. This includes establishing locality-based services to provide support to vulnerable people, to respond to referrals from the NHS, GPs, pharmacies and work with large networks of volunteers to deliver a multitude of supporting activity. It also includes dedicated customer contact teams proactively contacting those identified as vulnerable by the NHS as being at risk and connecting them into local support services and essential supplies.

At the same time the councils have implemented social distancing and remote working for their own staff while continuing or stepping up their work on protecting children at risk of abuse and neglect; supporting older people and disabled adults who need help with the tasks of daily life; re-housing homeless people with appropriate accommodation and support services; administering the government’s grant and relief schemes to businesses; collecting waste from homes, and providing public health advice.

While other services are temporarily closed to meet social distancing requirements – including leisure facilities and libraries – these need maintaining and continue to incur costs.

As is the case for most councils these days, Oxfordshire’s councils are not fully funded by government grants or income from taxes, but from revenue-generating activities - from car parking, fees and charges, income from rents and services we provide – which fund many of the services provided for residents and businesses. These income streams have all been severely damaged by the coronavirus restrictions and impact on the local economy. For some of the councils, the scale of lost income is of greater financial impact than the additional costs being incurred.        

All six councils remain committed to providing the support and services that residents need and to protect our communities. Additional Government financial support will enable this vital and lifesaving work to continue. 

“We are over a month into Oxford City Council working under emergency arrangements. That’s seen us delivering food and medication to hundreds of vulnerable residents, renting more than 120 hotel, college and hostel rooms for homeless people to social distance, and facilitating up to £83 million of immediate financial support to Oxford’s businesses. We followed Government guidance to act fast and decisively to deliver help to the many people in need across the city, rather than worry overly about the cost implications at this stage.

“Over the first three months it is costing us an additional £600,000 and that will be money well spent. But, we are also being hit by a sharp drop across many of the Council’s normal income streams in our ‘Oxford Model’ – particularly from our wholly-owned direct services company ODS as its own commercial work has halted, our park and rides which stand empty, and from our retail property portfolio, where some businesses are facing uncertainty and may struggle to pay rents. It is not yet clear what the full impact of this will be for the City Council this year, but it could be in the order of £12 million.

“The Government assistance package promised so far is welcome, but it doesn’t even begin to cover this.   A lot more will be needed if we are to be able to maintain all services at the levels Oxford’s citizens have enjoyed in recent years.”

Councillor Susan Brown, Leader of Oxford City Council