Cabinet to consider use of reserves to fill 2020-21 budget gap arising from COVID-19

Cabinet members are set to discuss the possible use of the council’s reserves to meet the budget shortfall that has arisen as a result of COVID 19.

In line with many local authorities nationally, Thanet District Council is facing a significant financial challenge due to COVID-19. While there may be longer term financial impact as a result of the pandemic, the Budget monitoring report which will be reviewed at a Cabinet meeting taking place on Thursday 30 July specifically addresses the one-off issues arising in the current financial year. The forecast is that the district will see increased costs whilst also experiencing a loss of income. 

Once the projected Government financial support is taken into account the net impact is a loss of approximately £3 million. This figure may change over time as there is further clarity on support from Government and the actual impact of COVID-19. However, it is deemed important to address the budget gap now. In order to do so, the report proposes that the COVID-19 related losses are funded from the council’s reserves. 

Leader of Thanet District Council, Cllr Rick Everitt said: “Our priority is to protect services and to continue to provide support for local residents and local businesses. We will have to make difficult decisions but every effort has been made to identify reserves that avoid a reduction in services or cuts to projects. As the report addresses one-off issues occurring this year, reserves would be used to fill the budget gap, rather than needing to use day to day services’ budgets. It would then be necessary to replenish these reserves in the medium to longer term.”

The full report has been published here.