LISTEN: The pandemic will have a long-term impact on council finances here

By Q Radio News

The pandemic will have a long-term impact on council finances in Northern Ireland, according to a report published by the Local Government Auditor Colette Kane. 

The report reveals that by the end of March 2021, councils had received £117m from the Department for Communities to support their financial recovery from the pandemic.

This included over £85 million to mitigate councils’ projected losses as a result of the pandemic.

LISTEN: The pandemic will have a long-term impact on council finances here.https://t.co/1WkMbMNzoe

— Q Radio News (@qnewsdesk) December 21, 2021

Councils have been heavily reliant on this financial support from central government to maintain services during the pandemic, but the report today warns that challenges will extend into the foreseeable future.

Even though many of councils’ revenue generating services have reopened, their ability to generate income continues to be affected by social distancing requirements, and potentially less demand as a result of the impact of the pandemic on disposable incomes.

The report adds that financial reserves will be an important resource in supporting recovery.

From 2019-20 to 2020-21, total usable reserves increased by £139 million to £405 million, mainly due to the funding received from central government.

Most councils have set up specific reserves to aid their recovery from the pandemic, but the report cautions that these will need to be managed carefully.

Commenting on the report, Ms Kane said:

“Councils had to adapt quickly to the challenges of Covid-19. I have heard many examples of how they responded in terms of innovation and collaboration to support local people, communities and businesses.

"It is vital that lessons learned from the response to the pandemic are shared and built upon as recovery continues. Robust financial planning and management will also be essential to aid decision-making and ensure continued financial resilience.”

Ms Kane says councils need strong financial planning to help them survive:

(Northern Ireland Audit Office)