05/06/2020 

A breakdown of the estimated £29m cost to Cardiff Council of responding to the Covid-19 outbreak between April and end of June has been revealed in a report to the authority's Cabinet.

Among the costs are:

• £5.1m spent on personal protective equipment (PPE);
• Support to domiciliary and residential care providers to reflect the additional costs of providing care during the pandemic;
• £2.1m on providing free school meals to around 12,000 pupils daily
• £2.1m to support suppliers paid in accordance with Government guidelines, in order to ensure service continuity both during and after the current Covid-19 outbreak;
• £1.8m on bereavement services - (enabling the procurement of a temporary morgue facility);
• £1.7m on operational changes to waste; and
• £1.6m on housing to support the homeless during the pandemic.

The council has also revealed the income losses COVID-19 is estimated to cost the council over the same period.

These include but are not limited to:

• £3.8m lost in parking fees, parking penalties and Moving Traffic Offences (MTOs);
• £2.3m lost from venues and events;
• £1.3m lost from trade, bulky and recyclable;
• £700k lost from leisure and outdoor sport;
• £700k lost from school meals;
• £600k lost from Storey Arms and the Music Service;
• £500k from planning and building control.

The report lay bare the expense involved in dealing with the effects of the virus.

The authority estimates it will spend more than £18m responding to the crisis and a further £11m is estimated to be lost in income as a direct result of COVID-19, in the first three months of the financial year alone.

Cabinet member for Finance, Modernisation and Performance, Cllr Chris Weaver, said: "Cardiff Council has reacted quickly to the crisis, changing the way we work, putting clear focus on maintaining essential services which deliver for our most vulnerable residents.

"Since lockdown began our services have had to respond and adapt to the crisis as events continued to unfold. We have set up food operations ensuring people across the city who are shielding or in financial difficulty because of the virus will not go without food. We have changed the way our waste services operate to ensure weekly kerbside collections are maintained while keeping our staff and residents safe.

"We have procured millions of items of PPE to ensure our services and the care sector can continue to operate. We have also worked closely with the care sector to ensure it can continue to operate in these difficult times, delivering a vitally important and valued service. Our school hubs have opened for the children of key workers and we have provided meals and cash payments for thousands of disadvantaged children throughout lockdown.

"Of course all of this comes at a cost and we have spent more than £18m ensuring the city continues to run and the most vulnerable among us do not suffer unnecessarily. Our focus has always been on ensuring the resilience of services critical to our COVID-19 response, doing everything we can to protect our most vulnerable citizens and our staff, and trying to halt the virus spreading."

The £18m additional expenditure is being kept under constant review, and is being updated regularly as further pressures emerge. These include assessing the financial impact of a significant increase in the number of applications for Council Tax Support and current work to establish effective ‘Contact Track and Trace' services locally as part of an all-Wales initiative.

Cllr Weaver added: "When we look at income we estimate that we will lose in excess of £11m as a direct result of Covid-19. Lost income during the lock-down includes the closure of the council's cultural and sporting venues such as theatres, Cardiff Castle, Cardiff White Water and City Hall functions. It also reflects a reduction in activity in other income-generating areas including planning, parking, moving traffic offences, trade waste, registration and school catering.

"As with expenditure, this estimate will be monitored closely and updated as required. Over time the assessment of further income streams will need to be analysed with the most significant being the potential for any impact on the collection of Council Tax this year. Every penny we take in Council Tax now is essential. It helps us maintain regular cash flow, which allows us to manage some of the expenditure and income losses we have seen."

The council hopes it will be able to claim back the additional £18m expenditure from Welsh Government through the Covid-19 Hardship Fund. This fund currently totals £110m and is for all local authorities in Wales to access. To date Cardiff Council has received £465,000 to cover Covid-related spend during the latter weeks of March. An April claim of £5.2m has been lodged with Welsh Government.

The report says it is likely, however, that the current funding level will not be enough to cover all expenditure requirements at an all-Wales level, and any decision on whether income loss will be reimbursed by Welsh Government is yet to be taken.

Cllr Weaver added: "We are submitting claims to Welsh Government on a monthly basis. There is, of course, an element of risk regarding the ongoing recovery of costs. In particular, as current funding arrangements are confirmed to the end of June 2020 only. It's clear to us that the challenges we face and the money we are spending to deal with those challenges will extend beyond that time-frame.

"There will be a need to consider and fully capture the implications of moving towards what is likely to be a "new normal" as lockdown restrictions are eased and the recovery phase begins. This is likely to include the impact of exit strategies for service changes put in place during the pandemic. It is also likely that some services will need to be changed to accommodate social distancing rules and restrictions. In all of this we have to ensure the safety of staff and residents moving forward. There may be significant financial implications in this regard, with income streams in particular likely to take a considerable time to revert back to normal levels.

"Positive talks are ongoing between Welsh Government and local authorities. The position is constantly evolving in response to Welsh and Central Government announcements. In light of these challenges, the 2020/21 Budget set in February will need to be kept under close review. It is the intention that an updated Medium Term Financial Plan will be taken to Council in the summer, hopefully in July 2020, which will be able to reflect the known and anticipated impact on the 2020/21 budget. As well as providing additional clarity with regards the current financial year, this will enable work on 2021/22 Budget setting to progress."