Funding gap set to grow as council emerges from Covid pandemic
- Credit: Ken Mears
Barking and Dagenham Council is facing a rising budget shortfall over the next two financial years as it emerges from the Covid pandemic.
A report going to the council’s cabinet next week sets out an updated funding gap of £5.1m in 2022/23 and £6.8m in 2023/24 - a greater two-year cumulative shortfall than previously estimated.
A council spokesperson said: “Covid-19 will have a long-lasting effect on the financial position of the council following many years of financial pressures for local authorities.
“Financial support from central government to support the Covid-19 response is expected to be limited during this financial year even though the council is expected to continue to support test and trace and the vaccination programme throughout the rest of the year.
“As one of London’s most deprived boroughs, Barking and Dagenham is expected to financially benefit from government funding changes.
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“However, these funding changes have been postponed since 2019/20 and aren’t expected to be introduced until 2023/24 at the earliest, increasing the financial pressure on the council.”
The council has planned savings this year totalling £2.641m - amounting to roughly £12.40 per person in the borough, according to BBC Shared Data Unit (SDU) figures.
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The spokesperson added: “We have invested in developing affordable housing and commercial property in the borough, which provide financial returns and therefore reduce the amount of savings that we have to deliver in future.”
The SDU data reveals local authorities across the UK, hit by falling income and increased costs, are set to make at least £1.7bn worth of savings in 2021-22.
Despite those savings, councils currently predict a £3bn shortfall in their budgets by 2023-24.
An MHCLG spokesperson said: “The government has allocated more than £12 billion directly to councils since the start of the pandemic, with more than £6 billion of this unringfenced, recognising that councils are best placed to deal with local issues.
“In the coming months, we will take stock of the demands faced by councils and the resources available to meet them and will decide on the timetable for future funding reform.”