Essex County Council has warned the economic impact of the coronavirus pandemic may force it to make ‘difficult financial decisions’ without further government funding.

The county council (ECC) says its Covid-19 response has so far totalled £74.5million in costs and revenue losses with a further £32.2m forecasted – ECC has received £37.4m emergency government funding with another £26.2m due.

Facing a shortfall of £43.1m, council leader David Finch hinted at a possible increase in council tax and business rates to cover costs.

He said: "The biggest unknown ahead is the impact on council tax and business rates which we rely on for more than 80 per cent of our funding. Inevitably the impact on unemployment and the economy will have reverberations on tax nationally and locally.”

The forecasted financial position is before taking account of any losses on council tax and business rates caused of the lockdown.

ECC’s Covid-10 spending commitments have left the council in a position where, without future emergency funding, “we will need to make difficult decisions on how we prioritise our constrained resources”, a council press release stated.

Spending has so far focused on adult social care, excess deaths management and addressing reduced income across services.

Cllr Finch added: "We have drawn down funding and used our reserves to divert money to the services that need financial support most, and where it can have the biggest impact. In the current climate is extremely challenging for any local authority to model the medium to long term financial impacts of the pandemic.”

Future waves of coronavirus along with falling tax revenues due to the number of new Universal Credit applicants could potentially costs the council a further £128m, officials say.

Included in the forecast is the cost of purchasing PPE for the opening of schools and other services “in line with government guidance.”

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