Impact of coronavirus will be felt in Highlands 'for years to come'
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THE impact of the coronavirus crisis could be felt for years to come in the Highlands as the knock-on effect of job losses and businesses folding becomes clear, a veteran Ross-shire councillor warned today.
The financial impact on Highland Council and the potential knock-on to services accessed by thousands of people on a daily basis was laid bare at a meeting of the corporate resources committee today with members left in no doubt about the serious impact Covid-19 continues to have on the local authority budget.
The scale and immediacy of financial challenges to be faced were laid out in a report that modelled two different potential scenarios - in the ‘mid case’ scenario, a budget gap of £65.7m is projected, and in the most severe, a potential gap of £96.9m is projected.
At this time the level of risk the council faces "is greater than perhaps ever before", the local authority says. It says the risks cover those to staff and their health and wellbeing, to the health, safety and wellbeing of wider communities and risks to the provision of essential council services.
Highland Council says its staff, partners and communities have all stepped up to provide a response to the immediate challenges posed, including providing support to the most vulnerable as well as providing care for key workers. At the same time the council has been continuing to provide essential public services.
The details of the adverse wider impact Covid-19 is having on the Highland economy are yet to fully emerge but are expected to be substantial as businesses fold and jobs are lost, it says. The long-term impacts of these factors will be felt by the council, "both in terms of reduced income generation and increasing demand for services over many years to come".
Committee chairman Councillor Alister Mackinnon (Dingwall and Seaforth) said: “Covid-19 has impacted on all of our communities. Many people finding themselves vulnerable and in need of financial assistance and advice. There has been interruption to education and exams, loss of jobs and businesses and, with people facing uncertain futures, issues of stress, anxiety and isolation.
“To respond, the Council has had to quickly adapt to provide new services, including the humanitarian assistance centres, the helpline, food projects, hardship and welfare projects, business grants, childcare for key workers and virtual education. All of this comes at a cost and we do not know how long these services will need to be provided.
“We need to be in a position to plan for the future but there are so many variables and future uncertainties that forecasting, and modelling is impossible to do with any accuracy. There is a great risk that whatever scenario we plan for may be significantly different from what actually transpires, with the council potentially facing a financial deficit that significantly outweighs our reserves.”
Cllr Mackinnon added: “We will all be working hard to mitigate the budgetary impact but the stark reality is that our income streams have drastically dropped and there is no doubt the challenges to balance our budget are huge.”
The committee agreed to make representations to government to advise that the council may require significant further financial support or other intervention from Government in order to manage its budget in the 2020/21 financial year.
A budget recovery group is to be established and will meet regularly, reporting to committee.A further report will be brought to the full Highland Council meeting on the June 25 outlining the council’s potential response to dealing with this financial impact.
