Wrexham Council chiefs warn coronavirus could have ‘profound’ impact on finances

Council chiefs in Wrexham have warned the coronavirus pandemic could have a “profound” impact on public finance.

It comes after it was recently estimated that Welsh local authorities are facing extra costs of £33m per month due to loss of income and increased demand on frontline services during the crisis.

The Welsh Government has given councils an advance on their core funding instalments to help their cash flow, while a support package of £95 million was also announced last month.

However, both the chief executive and leader of Wrexham Council said the effects of COVID-19 were still taking their toll on the authority’s purse strings.

Writing in the foreword to the organisation’s annual governance statement, they said: “At the time of writing, the authority is responding to the Covid-19 pandemic.

“Our governance arrangements are working well in these unprecedented circumstances, and while we cannot yet say what the long term impacts of Covid-19 will be for public finance and public services, the change could be profound, and we need to continue to ensure that our governance framework is fit for purpose.

“In the short term, the impact of Covid-19 is being felt across the council – both in the ways we conduct our business and the services we are able to provide.

“For example, the pandemic has had implications for our decision-making processes, ability to transact business, involvement of elected members and risk management, and has tested the capacity, capability and resilience of our workforce.”

They added: “Broadly speaking, our governance arrangements have worked well, our service continuity plans proved successful and we have responded to government and regulators’ regulation and guidance.

“But changes in the way we work and the services we provide have implications for our governance arrangements, and while we are in the early stages of assessing the impact of Covid-19, we must ensure that we identify and plan for the longer term impacts on our ability to deliver value for money and achieve our priorities while maintaining good corporate governance.”

The report outlining the effects of the pandemic on the authority’s finances is due to be considered at an audit committee meeting being held next week.

It will be the first time councillors have formally met in over two months since lockdown measures were introduced, with the session being hosted virtually over Zoom to prevent any risk of exposing members to the virus.

In a separate report being discussed, the council’s chief finance officer has provided a more in-depth look at the current financial position.

Mark Owen said the Welsh Government had provided a number of tranches of funding available to local authorities, including £40m to assist with social care costs.

He said: “The scheme provides for additional expenditure incurred by the local authority as a result of Covid-19.
“However, the council will have other pressures such as costs that are currently not eligible for Covid-19 hardship funding and loss of income as a consequence of temporary suspension of services.

“Negotiations are currently taking place with WG for financial assistance to cover these additional pressures.
“There may also be short to medium term impact on the assets and liabilities of the council as a consequence of the pandemic.”

The audit committee meeting will be take place next Thursday with members of the press invited to view online.

While it will not be streamed live, the council is aiming to post a public recording on its website as soon as possible after it finishes.

By Liam Randall – BBC Local Democracy Reporter (more here on the LDR scheme)