The Brighton and Hove City Council deficit was the 25th highest deficit in the “Global Fund” of 309 English parishes, according to figures released by the Department of Housing, Community and Local Government.
The numbers were an improvement on a forecast by the council’s acting CFO Nigel Manvell last December.
Mr Manvell projected a combined shortfall of £ 11 million in council taxes and business tax rates as companies that went bankrupt left properties empty.
At the time, he told the council’s Policy and Resource Committee that more people would be eligible for help with their tax bills or qualifying for exemptions because people lost their jobs during the pandemic.
The position was a dramatic improvement from last July when Mr Manvell warned the council was facing a potential £ 49m black hole in the town hall’s finances.
The grim picture was a conservative forecast as adult welfare costs skyrocketed and the council pulled in a monthly bill of £ 500,000 for personal protective equipment (PPE). At the same time, it lost revenue from parking and events.
At the end of the financial year the Council’s total budget was under £ 4.8 million. This was attributed to a mix of additional government grants and lower spending. But there was a combined deficit of £ 8 million in council tax and corporate rates.
The council is expected to receive a £ 4.5m government grant for its combined fund deficit for fiscal 2020/21, which ended in March.
Green Councilor Tom Druitt said: “The pandemic has posed many challenges to the finances of residents and the council.
“Like many parishes, Brighton and Hove City Council has received less tax than expected – mainly due to delays in building developments across the city, an increased number of people benefiting from a community tax break, and an increased number Number of businesses fail and fewer startups, as well as an impact on collection performance as more people and businesses get into financial trouble and default.
“The government has given the councils one-time funding to deal with these losses and has allowed us to spread these losses over a three-year period, which gives us some breathing space.
“In Brighton and Hove, government funding made up 75 percent of the loss of income. That helps, of course, but doesn’t fill the gap.
“National analysis also suggests that other councils are in a similar position, with a recent public report showing that most councils are still anticipating cuts.
“We know that there are still challenges and want to keep our city on a secure foundation.
“After more than 10 years of government cuts to council budgets, councils still have to work hard to maintain services to residents, especially adult welfare.
“Although short-term Covid grants have proven essential, we continue to advocate a long-term financial settlement for the councils to plan the services well into the future.”