Oxford City Council facing £24 million shortfall from coronavirus

Though councils across the UK were allocated money from a £1.6 billion pot of money last Tuesday (April 28) it is still not enough to plug the gap according to city council leader Susan Brown.

Oxford City Council received £1,511,435 of government funding in the most recent round of funding, on top of £110,247 earlier in April.

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However because of losing income from car parks, fines and selling its services, on top of providing accommodation for the homeless and food parcels for the vulnerable during lockdown, the council is now expecting a huge and worrying shortfall.

In a letter to housing, communities and local government secretary Robert Jenrick, Ms Brown said she welcomed the £1.6 million Oxford had received to fund local services.

But she went on: “I am afraid [the funding] falls a long way short of our needs to deal with the immediate impacts of the coronavirus, let alone its full financial impact longer term.”

Susan Brown

The Labour council leader said the current money pledged did not go far enough to cover the city’s losses.

It is now due to lose £11 million in the next year, with an extra cost to the public purse of £1 million on top of that.

The council is also due to lose £12 million over the next four years by current calculations.

Ms Brown told the government that Oxford and other urban areas should be given further funding because they are in a ‘more challenging position’ than rural areas.

This, she said, was because Oxford and similar cities formed a ‘focal point’ for rough sleepers and others in vulnerable positions from outside the city, who would come into it to seek help.

At the same time as helping these people, Ms Brown said the council’s usual means of generating money through its companies Oxford Direct Services and Oxford City Housing – as well as car parks, fines and fees and rent on shops and offices – had fallen away.

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She added the government needed to make consideration to give any future funding out on a more complex basis than the ‘per capita’ allocation of the April 28 fund.

This was given out on the basis of authorities with a larger population receiving more money.

The letter also pointed out that Oxford was one of the few councils in the UK which makes enough money to give back to the treasury.

Ms Brown called for the secretary of state to review ways councils can spend money during the lockdown.

Oxford Town Hall. Picture: Google Maps.

She asked for more flexibility around using the council’s capital budget for coronavirus related services, funding which is usually earmarked for big, long term building projects.

She also asked for the government to consider lifting a ban introduced in the spring budget on borrowing money from the Public Works Loan Board to invest in commercial property.

There were worries earlier this year that council investments in commercial property could create a speculative bubble and leave many of them poorer in the long term.

But Ms Brown said these investments would be likely to help councils continue running services to help people through the lockdown.

Oxfordshire's other councils

Before the new tranche of government funding in April, all of Oxfordshire’s councils sent a letter to the government saying they expect to lose £100m collectively in the 2020-21 financial year due to the pandemic.

In the second round of government funding, this is what Oxfordshire’s other councils received:

• Oxfordshire County Council: £12,694,685

• Vale of White Horse District Council: £1,365,710

• South Oxfordshire District Council: £1,401,792

• Cherwell District Council: £1,499,041

• West Oxfordshire District Council: £1,097,287

Emily Smith, leader at Vale of White Horse District Council agreed with Ms Brown that more needed to be done to help councils through the lockdown and in coming years.

Ms Smith said: “Robert Jenrick did promise they would make sure that as councils we are not going to go out of pocket, but there is quite a long way to go to make that happen.”