The £24million wiped from Sunderland City Council's balance sheet by coronavirus crisis

Reduced income from council tax, rents and other fees, combined with rising costs, have left many councils facing holes in their spending plans due to the impact of Covid-19.

Although Sunderland has been allocated extra funding from the Government since the crisis began, bosses are still facing financial pressures.

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An update on council finances estimates the impact of Covid-19 – including additional costs and lost expenditure – at £41.9million, against which the council has received funding of £18.2million from ministers.

This gives an estimated shortfall of £23.7million at the end of the current financial year.

Cabinet Secretary, Coun Paul Stewart, said: “The estimates are updated on an on-going basis and the final position will depend on a number of factors, including when the infection rates improve, when current restrictions start to be relaxed and how quickly the local economy is able to respond.

“As part of this, we use various different scenario planning assumptions, but consider £23.7million to be the most likely estimate at this time.”

In a statement, the council added it is not considering an emergency budget at present.

However, council chiefs are monitoring the financial position on a “daily basis” and “working closely with budget holders to ensure they are aware of the current position.”

“The council has a statutory responsibility to balance its budget,” Coun Stewart added.

“Until the full financial position is known, including the level of government funding, we are not in a position to set out how we will respond.

“Our financial position is being considered in the context of us providing services to the residents and businesses that require them.

“Again, we would reiterate that the Prime Minister gave a commitment at the beginning of this pandemic to fund the costs to local government and Sunderland expects this to be honoured.”

Early in the Covid-19 outbreak, the Government announced a fund to help councils deal with the effects of the virus, which saw Sunderland handed around £10.6million.

But under the second stage of the scheme, which saw the fund’s total value double to £3.2billion, the city council was allocated £7.6million.

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