Covid likely to cost Islington Council an extra £22m this year

Islington Town Hall

Islington Town Hall - Credit: Emma Bartholomew

The cost of the pandemic means Islington Council is facing extra pressure on the budget to the tune of £22.7million – but most of it will be met by government grants and through contingency funds.

It is forecast that Covid-related costs could reach £3.2m in adult social care, £2.9m in children’s services, and £7.5m in environmental regeneration.

Once the council has factored in funding from central government and £5.5m contingency funds, it is staring at a £200,000 overspend for 2021/22, according to an early forecast.

Overall the council is predicting a £176.2m budget for the year.

It also has to find £25.8m of savings from its general fund this year.


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Cllr Satnam Gill, who is in charge of finance and performance, said the pandemic has also caused a delay to the council’s house-building programme.

It means the housing revenue account could have an underspend of £15m.

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A council budget monitoring report pointed out that any forecast remains “very uncertain” because of the recovery from coronavirus.

It warns: “Rather than a one-off event that the council’s budget is recovering from, Covid-19 will continue to have a significant ongoing impact on the council’s budget for the foreseeable future.

“There is a need to maintain and, where possible, increase resilience in the council’s balance sheet and reserves to reflect hardening budget risks over the medium term.”

So far the government has confirmed an £11.7m general grant and contain outbreak management fund.

It is estimated that the council will get £2.4m in compensation from the government’s income loss scheme for the drop in sales, fees and charges for the first quarter of 2021/22, according to a report for the council’s executive.

Among the likely loss of income is £500,000 from not being able to rent out the Assembly Hall and £100,000 from licensing.

The environment department “relies heavily” on fees and charges income to subsidise its services. It is facing a  “substantial decrease” of £3.9m in likely income from pay-and-display, penalty charge notices, and permits and vouchers.

The council is also looking at a £3m loss in income from leisure centres and from events in parks and open spaces.

Proceeds from collecting commercial waste and performing weddings are likely to be hit badly too.

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