South Hams District Council is forecasting a budget shortfall of more than £1.3m – 14 per cent of its total budget.

The coronavirus crisis has left councils caught in a ‘perfect storm’ of having to manage both the increased costs of coping with COVID-19 and supporting vulnerable people in the community and the loss of key income streams such as car parking income and council tax income.

Councillors on Thursday heard that South Hams was projected a budget shortfall of £1.313m for the 2020/21 year, which included the £900,000 Government grant already received and the estimated £1.455m Government funding that the council is anticipating towards income losses on sales, fees and charges.

Cllr Hilary Bastone, executive member for support services, told the executive meeting that it was difficult to predict exactly how much the council would be losing as it was unknown how quickly some revenue streams would recover, but he said that due to the prudent financial management of the council over previous years, they were ‘well-placed’ to tackle the challenge, adding: “We will rise to the challenge.”

Lisa Buckle, corporate director for strategic finance, in her report to the meeting said that the 2019/20 budget was an underspend of £112,000, which was put into the Council’s unearmarked reserves which now stand at £2.01m, and that one of the options that Members could consider as to how to meet the budget shortfall in 2020/21 would be to use the 2019/20 underspend of £112,000 towards the projected budget shortfall.