A report has warned that Lichfield District Council will need to make savings or find new ways to generate income over the next four years.
The impact of coronavirus has been felt on local authority finances with around £1million less being transferred into general reserves than anticipated at the start of 2020.
The report by Cllr Rob Strachan, cabinet member for finance, says the challenges of “balancing the budget” will be a continual one even beyond the pandemic.
“There is currently an unprecedented level of uncertainty in relation to local government finance with a number of planned reforms.
“This uncertainty has been amplified by the COVID-19 pandemic that will likely have an ongoing and long term impact on revenue budgets.
“General reserves, based on current projections, are sufficient to balance the budget until 2024/25.
“However this is not a sustainable approach and the council will need to make savings or achieve additional income to close the funding gap by 2024/25.”
Cllr Rob Strachan, Lichfield District Council
Cllr Strachan’s report also outlined the impact that the a replacement of Friary Grange Leisure Centre could have on potential funding gaps.
“A replacement leisure centre of £5,000,000 funded by borrowing has been included in the approved mid-term financial strategy.
“The estimated cost of borrowing of £294,000 impacting from 2024/25 onwards for a budgeted period of 25 years has also been included in the approved revenue budget.
“This borrowing will be a long term financial commitment for the council. Therefore given the range of financial projections at this time of unprecedented uncertainty, council will need to be aware that to enter into long term commitments of this nature carry a very high risk that a balanced budget cannot be achieved or maintained.
“It is very important therefore to highlight that to mitigate the risk of a statutory notice, focused on the inability to deliver a balanced budget, a robust and deliverable savings plan will need to be agreed together with a commitment to its delivery before any financial commitment can take place.”
Cllr Rob Strachan, Lichfield District Council
The report will be discussed at a meeting of the cabinet on 9th February.
