£7.5m - the crippling cost of Covid-19 on East Lindsey District Council

East Lindsey District Council is calling for an urgent injection of more government cash amid concerns that Covid-19 could leave the authority with a £7.5 million ‘black hole’ in income.

Happier times: ELDC chief executive Rob Barlow (left) and leader Coun Craig Leyland show how important tourism is to the area.

The Horncastle News has seen an email ELDC leader Coun Craig Leyland sent to all councillors and MPs Victoria Atkins and Matt Warman.

In the email, he reveals the startling extent of he impact of Covid-19 .

He admits revenue streams have been reduced to ‘almost zero’.

In an exclusive interview based on the content of the email, Coun Leyland confirmed:

• The council is losing around £1.5 million every month that the lockdown restrictions are in place;

• That this figure could increase to £2 million;

• The current system of allocating extra government cash is not fair;

• The council is determined to continue to deliver ‘core’ services - including refuse collection.

However, he admitted he could not give any guarantees and said the situation was being reviewed on a daily basis.

Coun Leyland did confirm funding for a new £8m-plus ELDC headquarters and college in Horncastle is secure.

He is hoping MPs Atkins and Warman will raise ELDC’s plight at Westminster.

And, he ruled out ELDC plugging any funding gap by using cash reserves, saying the money would be better used to support any economic recovery.

In his email to councillors, Coun Leyland acknowledges the Government has ploughed an extra £1.6 billion into the coffers of local authorities across the country.

However, he says ELDC’s share of the first ‘tranche’ was £108,000.

Since then, ELDC has received an additional £1.4 million from Whitehall.

His email adds: “My earnest request to you both (MPs) is to argue for a greater share for district councils of government aid.

“ELDC is a well-run authority. We have reserves and a capital programme that will see projects delivered across our district and if we are to emerge strong from this crisis, we still need that ability to invest locally.

“You know of our ambition for Skegness, Mablethorpe, Sutton on Sea, Horncastle and our market towns.

“It would be counter- productive for us to use our reserves to plug the financial hole when they will be better directed at supporting our economic recovery.

“I hope that the fact we are a prudent, well-run authority is noted by government.

“A fairer share of the latest government tranche and a greater awareness of the predicament districts face in terms of loss of revenue would be a great step on the way to us enabling a fuller recovery from Covid-19.”

Coun Leyland praises the ‘incredible work’ being done by ELDC staff in what he describes as an ‘unprecedented’ situation.

He says he understands why Lincolnshire County Council receives more government funding because it is responsible for more services, including social care.

Coun Leyland also acknowledged Covid-19 had impacted on the finances of all authorities.

However, he said ELDC was in a ‘somewhat unique’ position in that a large percentage of revenue comes from tourism.

He said: “I am not claiming we are the only council suffering - far from it.

“However, we are somewhat unique in that we are heavily reliant on income from tourism - and particularly coastal tourism during the summer.

“At the moment that is not happening.

“No-one knows how long this (crisis) will continue. We’ve had two months and we’ve based our forecasts on another three months.

“If you take in the losses so far, you are talking about anything up to £7.5 million which, to say the least, is a significant amount.”

He explained revenue is not being collected from car parks, or ELDC-owned holiday accommodation on the coast.

In addition, a raft of business rates have been deferred, along with some council tax payments.

The amount of money councils receive from Whitehall was slashed, even before the sudden and dramatic impact of Covid-19.

Ironically, an extra slice of income from business rates was supposed to offset some of that reduction.

Coun Leyland confirmed the council had already made ‘stringent savings’ and was continuing to look at other cost-cutting measures.

He said the council was not carrying out any ‘non-essential work’ during the pandemic and had also stopped filling staff vacancies.

However, he admits there was a limit to the depth of cuts the council can make before impacting on core services.

Coun Leyland added: “I must also acknowledge the incredible work being done by our ELDC teams.

“We are seeing some exemplar work within the Lincolnshire Resilience Forum 
(LRF) by our wellbeing team, who have effectively created the structure to deliver aid to our most vulnerable 
residents, not just in East Lindsey but across the county.

“Our waste teams are continuing to provide an excellent service across the district and our business grant team has delivered the highest value of grants to businesses in Lincolnshire. This work continues.

“And, of course, this is not happening in isolation.

“Our district council partners across Lincolnshire are all part of the team effort to see us through the pandemic.

“We will do our utmost to make our budget work but it is not going to be easy.”

Coun Leyland said the issue with government funding was the formula used to decide who gets what is based purely on population numbers.

In terms of population, East Lindsey is not among 
the highest ranking districts, but it does cover one of the larger areas.

The absence of a major city - and of large industry - impacts on revenue, meaning car parking contributes a heftier than average share.

Coun Leyland admitted putting up rates, parking charges and council tax bills was not a solution and could damage any recovery.