South Holland District Council is cancelling a planned two per cent pay increase for its staff alongside the raising of council tax to offset an estimated £1.52m loss for the next financial year.
A Special Cabinet meeting on Tuesday heard that £759,000 of saving measures had been identified but £761,000 more savings needed to be found.
Not providing the pay rise had released £150,000 and leaving vacancies unfilled in the planning and shared management team would save £240,000 the meeting was told, while government grants had been received including £46,000 to help the council’s rising costs for looking after homeless people.
Other reasons for the predicted financial loss were given as the increase costs of fleet maintenance, the council taking in the Pride team and the potential for less planning applications to be submitted.
The council’s Housing Revenue Account was due to have a £1.92m surplus, the meeting heard.
Portfolio holder for finance Peter Coupland told the meeting that they’d been “very conservative” in their estimates that the finances had been “severely impacted by COVID-19” and stressed “there is a lot of unknowns and uncertainties going forward”.
He said: “The gap figure is subject to final budget adjustments and it will change.
“As we’ve been developing numerous savings income generating opportunities are being explored. We do have a plan A but I think between now and February we’ll have plans B, C and D forced upon us depending on COVID related issues.
“It’s a good story for us because we’re going to be able create and manage a balance budget with the work we do within the service departments.”
One plan B included using a new government grant if more efficiencies couldn’t be found, Coun Coupland said.
The council is also hoping to receive a £477,000 grant from the government to help offset COVID costs such as the loss of income from lesiure centres, the South Holland Centre and business rates.
The proposed rise in the council tax of £4.95 for a year is set to raise £197,000.
Nearly half of that goes to local drainage boards and the Cabinet heard that they had requested an up to five per cent rise rather than the 1.99 per cent agreed.
“We’ve had meetings with the drainage board and we’ve stressed the pressures we all have with COVID,” Coun Coupland said. “We’ve stressed that they should be looking at all their costs and keeping them as neat and tidy as possible,
“They were looking for a lot more than two per cent so I think we’ve made them realise the situation.
“Though we wouldn’t want to deny them any increase that may make the flooding of the district occur, we have to be sensible in balancing what cash we need to do what jobs and if large jobs can be moved on six months without danger of flooding then that’s what we’ve told them to do.
“We do not want to put anything in their way which would make our feet wet.”