Council funds in Gwynedd could be hit by as much as £16m due to coronavirus, leader warns
Some councils face being unable to set balanced budgets as the coronavirus pandemic continues to wipe out public finances, Gwynedd’s leader has warned.
Cllr Dyfrig Siencyn told a meeting of the council’s Cabinet that Gwynedd faces a loss of income of between £5m and £16m, depending on the length of any lockdown.
While authorities hope to receive Welsh government funding to cover at least some of the additional costs incurred during the lockdown, there is no promise of similar cash to cover loss of income from services such as leisure centres, school meals, parking, consultancy and highways arrangements.
According to the Welsh Local Government Association, which estimates that councils across the country face losing out on around £170m of previously budgeted for income due to the lockdown, efforts are underway to lobby Welsh ministers to fund the gap on the balance sheets.
In Gwynedd’s case, however, this gap has the potential to exceed the £7.5m it currently holds in reserve.
Cllr Siencyn, speaking during the online meeting, said: “Councils across Wales have acted swifty and stepped to the plate in the face of this tremendous challenge we all face.
“If there’s one lesson that should be learnt from this, it is of the importance of the services provided by local government.
“But it’s more than possible that if no such help is forthcoming, there will be situations where councils will be unable to set balanced budgets.
“We certainly don’t want to end up in such a situation but the message needs to be clear for ministers.”
“We’re in a dreadful situation, shared with every other Welsh authority,” added Cllr Gareth Thomas.
“We simply must urge the Welsh Government to help us out here, we’ve had our finances squeezed unmercilessly for several years now and but still we’re doing all we can to protect the vulnerable and even keep people fed during this crisis.”
The finance portfolio holder, Cllr Ioan Thomas, said that every authority was concerned about the drop in income coupled with the additional costs, having previously described the situation as a “perfect storm.”
“We’re told that ministers are sympathetic and there is a promise of some support from central government, but the question is how much?”
Dafydd L Edwards, the head of finance, confirmed that while the Welsh Government had agreed in principle to refund at least some of the losses, discussions are ongoing between ministers and council leaders.
“There are signs of an agreement in principle and positive noises we are still not sure if this is a certainty nor any indication of the amount of anything we receive,” he added.
“The major risk to us an an authority is the loss in income, which is dependent on the length of any lockdown, but will have a significant impact on ourselves and other councils.
“This is a very stark situation we are facing but it is only right that we bring these matters to the fore today so that we can prepare adequately.”
Meanwhile, a report presented to the Snowdonia National Park authority on Wednesday found a gap of up to £1.3m is being predicted in the park’s finances.
Largely blamed on the closure of car parks as well as major attractions such as Plas Tan y Bwlch and yr Ysgwrn, the effect of the lockdown has been a shuddering halt to major income sources.
Having already lost out on £600,000 since the lockdown was introduced, the report went on to confirm that some staff have been furloughed.
But with the park’s uncommitted reserves standing at less than £800,000, it warns that the need for Welsh Government to compensate park authorities for loss of income is “therefore obvious”, adding that income levels are “unlikely to recover, possibly, for some years.”
The Welsh Government has been approached for comment.
By Gareth Williams – Local Democracy Reporter
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