Coronavirus leaves £25million 'black hole' in Sunderland's council budget

Coronavirus has a blown a “black hole” worth more than £25million in Sunderland’s finances.
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Bosses at Sunderland City Council have seen cash raised from council tax, parking tickets and other sources plummet, while the impact of COVID-19 has caused other costs to surge.

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And while promised government funds could plug most of the gap, the gulf between income and expenditure is only expected to widen further as lockdown continues to bite.

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“This is a unique situation,” said Graeme Miller, the leader of the council, “at the start of the year we had a balanced budget, now we may as well rip that document up.”

Earlier this month (April), Coun Miller wrote to Prime Minister Boris Johnson calling for more backing for local authorities on the ‘front line’ battling the virus outbreak.

At the time, ministers had unveiled funds worth £1.6 billion to help English councils – later doubled to £3.2 million.

And while this is expected to hand Wearside about £20 million, this will still leave a gap worth £5 million, with the problem only expected to get worse.

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“I was asking for the government to stand up to their pledge to give us the money we’re spending to support public health in this crisis,” said Coun Miller.

“At that up point, Sunderland City Council, up until June, was heading for a £15 million black hole.

“We weren’t bringing as much council tax in as we expected, our fees income had dropped through the floor, so did our commercial income, while adult social care went through the roof.

“Even with that £10.6 million, we’re still about £5 million in the hole.”

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Coun Miller ruled out using the council’s savings to meet day-to-day running costs, calling it an inappropriate use of reserve funds and instead urging more support from Westminster.

He added: “We may be past the peak of cases and people dying, but we’re in a flatline situation, or a graded decline, which will take months.

“I don’t see things changing any time soon, which will only add to pressures, and I think it will continue well past June, so we’re going to have to keep on at the government.”

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