Effect of Covid on council finances still ‘severe’

The impact of Covid-19 was laid bare at the quarterly finance meeting of Westmeath County Council which heard that a government allocation of almost €3m was needed to fully cover losses generated in 2020.

While the council head of finance, Jimmy Dalton, acknowledged the allocation of €2,870,267 was “a satisfactory development” and played “a key part” last year, he warned members that the local authority continues to operate in a pandemic and the effects on council finances “are severe.”

He pointed out that, unlike 2020, the council is now experiencing the financial impact of Covid “from the first day of the financial year” and is continuing to incur costs “mainly payroll related, due to the Level 5 restrictions”.

Mr Dalton did say that a number of government initiatives, including the Rates Waiver Scheme, were “significant” in reducing the financial impact on businesses, and this had “an equivalent positive impact” on council finances for 2020.

The meeting heard that the €2.9m allocated to Westmeath last year from central funds fully covered losses of locally generated income amounting to €1,636,699 and costs associated with the pandemic of €1,233,568.

“As we move into 2021, the challenges are even greater and the pandemic is still with us,” said Mr Dalton, who added that the “vast array” of supports to business “cannot last forever”.

He said the Revenue Expenditure and Income account to March 31 shows a deficit of €46,996, and he pointed out that a number of key factors would play “a pivotal role” in the outcome for the year.

Among those factors were the injection of “billions” into the economy by government, amid “ongoing and huge level of uncertainty”; the success of the vaccine rollout; the uneven impact of the pandemic on various sectors; the challenge of addressing the long-term (currently unknown) impact of Covid-19 on several sectors of the economy such as hotels, pubs, travel, events, leisure and the arts; the short-term impact of the withdrawal of pandemic supports on businesses and the economy, and the “significant changes in taxation rules” facing the international sector, and driven by the pandemic.

“The continuing impacts on our finances are severe and the Rates Waiver Scheme for 2021, although very welcome, is not as comprehensive as that which operated in 2020,” Mr Dalton said.

Cllr Mick Dollard wanted to know if there were businesses that were in receipt of pandemic supports but were not paying rates to the council.

“We would have a small number of ratepayers who benefited from the Waiver Scheme and the Business Restart Grants and they have not been co-operating with us, but we are continuing to pursue them,” said the head of finance, who added that the number in question amounted to “around 150 people”.

He further pointed out that the Rates Waiver Scheme for 2020 was “incredibly wide” and had included almost everyone, but he said there had been “significant changes” to the new scheme which would have implications for the finances of the local authority this year.

Business categories no longer eligible for a rates waiver include: manufacturing, garages, quarry/concrete works, oil/fuel depots and wholesale/ cash and carry/ distribution.

This change means that there has been a reduction of 500 ratepayers eligible for the waiver scheme since last year, but Mr Dalton said there is an appeals process in place for businesses which have been severely affected by the pandemic and feel they have been unfairly excluded from the scheme.

“Westmeath County Council has 16 such appeals in progress at present,” he said.