Cork County Council's €23m deficit could take five years to recover

Cork County Council is urgently looking for Government funding as it faces into the "stark" reality of a budget deficit of at least €23m from which it could take up to five years to recover, due to the Covid-19 lockdown.
Cork County Council's €23m deficit could take five years to recover
Cork County Hall. Pic; Larry Cummins
Cork County Hall. Pic; Larry Cummins

Cork County Council is urgently looking for Government funding as it faces into the "stark" reality of a budget deficit of at least €23m from which it could take up to five years to recover, due to the Covid-19 lockdown.

A range of key services including the council's roads and housing budgets could be impacted as it desperately looks to save money.

The council believes it could lose up to €20m in rates income alone this year because many businesses will struggle to get back on their feet and others will go under as a result of months of lockdown.

Decisions have already been made to halt council housing maintenance programmes, except for emergency repairs and the local authority may also reduce its funding for roads.

The council also estimates revenue losses of €1m from parking charges and fines and a similar sum from the tourist and leisure facilities it runs, such as Spike Island and municipal swimming pools.

Most municipal district councils have already decided to axe parking charges for three months in an effort to attract shoppers back into towns and thus aid reopening businesses.

Other losses, but to a smaller extent, have been incurred through a reduction in planning fees and income from reycling centres.

The council has already committed €6m to a town renewal fund designed to bring people back into the shopping precincts of its 23 towns. It is determined to press ahead with that and a team of "town ambassadors" to help people with social distancing as businesses and areas re-open.

The newly elected Mayor of County of Cork Cllr. Ian Doyle & Chief Executive of Cork County Council, Tim Lucey. Pic: Richard Coleman – AP
The newly elected Mayor of County of Cork Cllr. Ian Doyle & Chief Executive of Cork County Council, Tim Lucey. Pic: Richard Coleman – AP

Council chief executive Tim Lucey described its financial situation as “stark” and warned councillors they shouldn't underestimate the challenges they face, as the Covid-19 crisis could impact the council's income for the “next four to five years".

The council's head of finance, Lorraine Lynch, said meetings were being held regularly with the council's directors of services to see where cuts can be made.

She said the council would normally expect to take in around €110m per annum in rates, which pays for about one-third of its expenditure.

Ms Lynch said while some businesses will not be able to open until August 10, others might not open by the end of the year and some many never open at all.

She added that revenue would also be lost because a number of council tenants have sought reductions in their rents.

These are based on a tenants income and many have lost their jobs and even with the Covid-19 payment their income has reduced.

“The deficit will reduce the capacity we have for services. Without national funding we will have a serious deficit which will impact on our budget for 2021 and possibly some further years ahead,” Ms Lynch said.

Cllr Alan Coleman declared it was the worst financial report he'd seen in his many years as a county councillor.

“We will have no reserves left either. It's frightening,” he said.

“People need to be aware of the very grave financial situation we face. Local authorities are going to need far greater support from national government because of this,” Cllr Seamus McGrath said.

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