Councils in Portsmouth area could face more than £40m budget shortfall due to Covid-19

Upper tier authorities Hampshire County Council and Portsmouth City Council are predicting respective losses of £21.6m and £17m even after being awarded millions in relief funds.

And Gosport Borough Council is expecting a loss of between £1m and £1.6m, while Fareham council could have to use up to £3m of its reserves to avoid landing in the red.

Across the UK local authorities are in similar situations as the pandemic has led to added costs and loss of income, with five - Leeds, Wiltshire, Trafford, Tameside and Barnet - claiming they might have to declare bankruptcy.

Although councils around the Portsmouth area are not at this stage, there are fears that services could face cuts in the future.

A total of £16.4m is predicted to be lost in income to Portsmouth City Council, from the port, rents, council tax, parking charges and the leisure industry.

Although the council was awarded £11m by government, this still left a £17m shortfall due to extra costs.

Council leader, Councillor Gerald Vernon-Jackson, said: 'We are losing a lot of money

'We have lost income because we made all car parking free, we have lost income because some companies weren't able to pay their rent. We are losing income because some people won't pay council tax.

'Originally government said "spend what you need." Unless the government keeps to its word we will have to find ways of cutting £17m from the budget.'

Hampshire County Council said it will continue to lobby for more cash as a government grant of £53.9m was not enough. Speaking previously council leader Cllr Keith Mans said: ‘Central government grants will cover some of these additional costs, but we calculate that unfunded costs of £21.6m will have been incurred during the three months to the end of June, which will have a significant impact on the county council’s financial sustainability going forward.

‘The county council is already undertaking a major efficiency programme to address a shortfall in the revenue budget of a further £80m by April 2021. Therefore, we will be continuing to lobby the government to underwrite all of the financial consequences of the Covid-19 crisis.’

Speaking about bankruptcy, or a section 114 notice, Gosport council leader Cllr Mark Hook added: 'We estimate the total shortfall to be in the region of £1m to £1.6m in this financial year after taking account of government assistance so far of £0.88m.

'Through prudent financial management, the council has sufficient cash reserves to manage this pressure and is not considering a section 114 notice. The council carefully monitors the situation and potential long-term impact on a continuous basis. '

Havant Borough Council, Fareham Borough Council and East Hampshire District Council are still reviewing what their predicted shortfalls could be due to coronavirus.

A message from the Editor

Thank you for reading this story on portsmouth.co.uk. While I have your attention, I also have an important request to make of you.

With the coronavirus lockdown having a major impact on many of our advertisers - and consequently the revenue we receive - we are more reliant than ever on you taking out a digital subscription.

Subscribe to portsmouth.co.uk and enjoy unlimited access to local news and information online and on our app. With a digital subscription, you can read more than 5 articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit our Subscription page now to sign up.

Our journalism costs money and we rely on advertising, print and digital revenues to help to support them. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.