Major council projects may be delayed by a potential multi-million pound hit South Kesteven District Council could suffer due to the coronavirus pandemic.

A report discussed by councillors yesterday (Tuesday) says that the cost of the pandemic to the council could exceed £1million in the three months from April to June and may also top £3.5million for the year ending next March.

However, Cabinet Member for Finance and Resources, Coun Adam Stokes, says SKDC is in a strong financial position and still intends to deliver on major projects, including its leisure programme.

Coun Stokes told Nub News today (Wed): "The administration and cabinet are fully committed to the leisure programme. We are an ambitious council. We are still committed to doing what we said."

However, an updated report on the financial impact of the pandemic on the council will be prepared for SKDC's June 16 cabinet meeting, which will also discuss the council's capital programme.

An 'amended budget framework' will also be considered by the full council in September.

The report, prepared for Finance, Economic Development and Corporate Services Committee reveals how the council, like other local authorities, has been hit by a double whammy of lost income from facilities like arts centres, whilst also losing business rates and similar income.

Losses have been offset by extra financial support from central government but it is not enough to fully make up the difference.

Already, the report noted that in the last two weeks of the financial year ending in March 2020, the 'adverse financial impact' from the lockdown measures imposed by central government was £39,000 in lost parking charges and £9,000 in lost income from running the council's markets.

In the current financial year, the report said closing the arts centres was costing the council £95,771 in lost income every month. Free parking, as a result of the pandemic, was costing the council £107,750 a month, and with planning applications expected to halve over three months, a £65,891 monthly loss was expected here.

With other losses in areas like building control, commercial waste and property commercial income, the council expects a monthly loss of income of £365,720 or £1,097,303 over three months.

A further table setting out a 'realistic forecast' for 2020/21 also showed projected loss of income of £890,669 from the arts centres, £328,950 from building control, £808,125 from car parking, £606,941 from planning and land charges and £170,573 from markets.

In addition, SKDC could also suffer a loss of income of £576,082 in property commercial income, £151,181 in commercial waste revenue and £147,500 in Treasury Investment Income. Together, the 'realistic forecast' losses could total £3,679,570.

Interim Director of Finance Richard Wyles said in the report: "The full year impact could rise to £3.5M based on an assumed improving picture for the remaining months (July-March 2021). This will be heavily dependent upon the easing of restrictive movements and the level of economic activity."

Mr Wyles also reported that in terms of cash inflow from Council Tax and Business Rates, in April alone such income dropped by £806,000, though this was offset by accelerated government grant payments and other measures.

Even so, a growing number of businesses have cancelled their direct debit, either to protect their cash flow or they believed they were eligible for benefits announced by central government.

The report also noted central government has given SKDC 'funding tranches totalling £1,480,912 to help the council meet the costs of dealing with the crisis, such as PPE for essential workers, extra administration, housing the homeless and to "offset some of the budget shortfalls being experienced."

Further government funding, it continued, would be needed as the long-term impact of the pandemic becomes clearer and talks continue with central government on this.

Mr Wyle's report also said: "The capital programmes for both the General Fund and Housing Revenue Account have been re-profiled to take consideration the current climate with the majority of schemes delayed until later in the financial year."

Due to changes in the procurement market once the economic recovery starts, such programmes and their funding will need reviewing later in the year.

The report continued: "Going forward consideration will be given to the financial modelling and phasing of large-scale projects including St Martins Park Stamford, the leisure investment programme, Historic Action Zone, Future High Street initiative and the Housing Revenue Account new home building programme.

"This will be undertaken in the context of the changes to the medium-term financial outlook which will emerge following the impact of the government's Covid-19 Recovery Strategy."

After detailing central government schemes concerning business rates and grants, plus council tax hardship funds, that SKDC is administering, Mr Wyle's report added: "It is a changing picture and the council responses will be modified and adapted as the national easing of restrictions becomes clearer."