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Oxford City Council set to lose £24m from coronavirus

Oxford City Council stands to lose £24 million as a result of the coronavirus pandemic. This marks a sharp change in economic fortunes for one of the few UK councils to usually return money to the Treasury. 

It is predicted that the Council will also lose a further £11 million in the next year, with an extra cost to the public of £1 million. This is despite the recent payment of £1,511,436 to the Council from the Government, with an additional £110,247 also provided in April. 

In a letter to the Communities and Local Government Secretary, Leader of the Council Susan Brown explained the reasons for the shortfall: “This is in part due to the city forming a focal point for some of the most difficult challenges, such as housing rough sleepers and targeting assistance across diverse communities. In the main, however, it reflects our longstanding reliance on generating income.” 

She noted the particular effect on incomes “from our historic city centre retail property portfolio, from car-parking, and from commercial earnings generated by our wholly-owned direct services company ODS and our housing development company OCHL.”

The Council Leader also outlines the steps the Council has put in place to mitigate the effects of the pandemic, all of which have impacted the Council’s financial plans: “We’ve delivered food, medicine and other support to 1,500 vulnerable households across the city, rented more than 120 hotel, college and hostel rooms for homeless people to social distance, and facilitated more than £75 million of immediate financial support to Oxford’s businesses.”

While welcoming the support the Government has given Oxford City Council, Mrs Brown explains that this is not currently sufficient: “The City Council is significantly more exposed to these financial impacts than some of our neighbouring councils… you will see that the allocation covers just 13 percent of our total funding gap.”

The issue of how the funding has been distributed between councils was a key point of the letter to the Communities Secretary: “I note the allocations were made across the country on a per capita basis, which does not take into account the more challenging position for city-based local authorities such as Oxford. I am afraid it 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.”

The Council has suggested that more flexibility is required with the rules governing its budget, with the request that the capital budget (reserved usually for long-term building projects) be made available to coronavirus-related services. There have also been calls to lift a ban imposed in the spring budget from borrowing money from the Public Works Loan Board.

Layla Moran, MP for Oxford West and Abingdon, said: “The Government is penalising those councils who are going the extra mile, which in my mind is exactly what we need from our local authorities right now. Robert Jenrick thinks the funding already announced is ‘more than enough’ – well the letter from all of Oxfordshire’s council leaders to him last month shows he’s incorrect.

“I’m calling on the Government to reverse this decision and give councils the funding they need to survive this crisis. They’re on the frontline of the fight against coronavirus and deserve better than Whitehall abandoning them.”

Anneliese Dodds, MP for Oxford East, said: “Oxford City Council have been working hard to support Oxford’s residents during this crisis. While I welcomed the government’s announcement of additional funding for local authorities, we need to ensure that it fills the financial gap that our councils are facing, including direct costs and foregone revenue. 

“I have raised this with the Chancellor and will continue to push on this to ensure our councils can continue to provide their essential services during this crisis and beyond.”

Image Credit to: sidharthbhatia/Unsplash.com

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