Shot in the arm for Mid Sussex District Council finances but ‘very tough’ road ahead
Government compensation should give Mid Sussex District Council’s coffers a much-needed shot in the arm.
But councillors have been warned that the long-term picture will see a ‘very tough’ road ahead.
During a meeting of the cabinet on Monday (September 13), members received a budget management progress report for the first quarter of 2021/22.
While it forecast an overspend of £277,000 – largely due to the ongoing impact of Covid – the news that more than £300k in compensation could be received gave a healthier outlook.
The overspend could be turned into a £100,000 under spend.
The money, from the Ministry of Housing, Communities & Local Government income compensation scheme, would be a one-off payment covering 75 per cent of irrecoverable losses, such as car parking charges, during the first three months of the year.
Peter Stuart, head of service, said initial calculations showed the council could receive £386,000 – though this figure would be subject to audit.
Mr Stuart added: “This is a forecast only. There’s much that can happen over the course of the financial year, not least the financial consequences of a further locking down of the economy, for whatever reason.”
While income has started to improve, it is nowhere near pre-pandemic levels.
Mr Stuart told the meeting that income from car parking was expected to be 30 per lower than ‘normal’. He added that this was ‘likely to be a pressure next year unless something radical changes’.
Looking to the future, Mr Stuart said 2022/23 would be ‘tough but not too bad’ but 2023/24 would be ‘challenging’ with ‘imbalance creeping in’ as the ‘lines between income and expenditure start to diverge’.
He added: “Next year is the year in which we need to do some work around our medium term financial plan. Next year is a really important year.
“The government has brought us a year to sort ourselves out but we must prepare for 2023/24, which on the current indications looks to be a very difficult year indeed.
“And that looks to set-off of a number of very bad years in the future.
“I think we have an 18 month window in which to address these issues.
“The evidence does rather suggest that things are going to get very tough.”
Leader Jonathan Ash-Edwards spoke about putting the council ‘in as strong a financial position as we can while also delivering services’.
He added: “The issues we face are not unique at all and other councils and neighbours are grappling with exactly the same issues that we are.”