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April 2020

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Published on 23 April 2020

Economic impact of Coronavirus on Teignbridge

Teignbridge Council is facing an unprecedented financial crisis due to the fall in income received as a result of the coronavirus pandemic. 

The Council has been at the forefront of providing a vital community response over this difficult time and has risen to the Government’s challenge for local authorities to support local communities and infrastructure. 

This has included delivering food parcels to shielded individuals, housing the homeless, paying grants to businesses or maintaining refuse and recycling collections.  Staff have been working long hours and at great personal risk to ensure key services are maintained and support given to those in our district who most need help.

However, around half the Council’s funding comes from council tax, business rates and government grants with the remaining £17m generated from commercial activity and fees and charges.  These are all being severely impacted by the lockdown and is estimated to result in about a £10m budget shortfall.

Council leaders have written to local MPs and the Government to seek their financial support, so that services are not affected and the most vulnerable are protected.

Council Leader, Cllr Gordon Hook, said:  “District councils have provided vital support to Devon’s communities throughout the coronavirus crisis and will continue to as we move towards economic recovery from the impact of the virus.  However in order to continue, they need to be given the support to offset the swingeing financial hit they have taken as a result of this crisis.

“Responding to this crisis has increased our expenditure, both on the normal services we provide, such as our housing benefits support, waste collection, and on additional services and support that we have set up to help our residents cope with the effects, such as finding accommodation for people who are homeless, setting up hubs for food delivery and IT support to enable key staff to work from home.

“Teignbridge District Council’s gross spend excluding housing benefit payments is approx. £34 million, which is funded by £17 million from commercial income such as leisure services and parking charges and the rest from council tax (7% of the total council tax collected), business rates and government grant.

“The predicted cost of the lockdown to the council is in the region of £150 per property, based on lost income and additional costs arising from the critical support being provided to communities and businesses.  As a result, Teignbridge is predicting a shortfall of around £10m this year.  However, depending on how long we are in lockdown, this could potentially be even greater.”

Executive Councillor for Finance, Cllr Alan Connett, said:  “We are doing all we can to mitigate the catastrophic impact coronavirus is having on our budget and on services to our residents.

“We have furloughed all the staff whose work is affected by the lockdown – for example in leisure services, and we along with other Devon district councils are working closely with the Department for Housing, Communities and Local Government and the Local Government Association (LGA) to highlight our situation.

“We are already seeing significant job losses across the region, which relies heavily on small businesses such as tourism, hospitality, retail, food and drink and construction sectors, with more than 3,000 immediate redundancies notified in businesses.   This will have a huge knock-on effect both on the Teignbridge economy and on the council’s finances, as more people are pushed into needing additional support.

“We have supported over 2,000 businesses through the business grant scheme so far and are urging businesses who have yet to apply to do so as quickly as possible. We are aiming to have reached all ratepayers by the end of the month.

“We welcome the Government’s announcement of an additional £1.6bn in recognition of the vital work that local authorities are doing to respond to this crisis, and we await the detail. However, the first allocation of a similar amount saw Teignbridge receive £59,000 – which equates to around £1 per property or 50p per head of population. 

A similar size grant would be a drop in the ocean in terms of resolving the dire financial predicament we face as result of this national emergency.”