The coronavirus pandemic could continue to put pressure on Enfield Council’s finances for the next two years at least, a report has warned.

Extra costs and income losses caused by the impact of Covid-19 mean there is a “strong likelihood” up to £4 million will need to be factored into the council’s five-year medium-term financial plan “initially as a one-off but potentially as ongoing cost”.

Although the Government covered the council’s additional pandemic costs and lost revenue for the 2020/21 financial year, the long-term impact of the pandemic could lead to higher spending on services such as temporary accommodation, social care and special educational needs (SEN) transport.

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The council could also face lower income from council tax and business rates because of the pandemic’s impact on the borough. The risks were set out in a report presented to a meeting of the council’s finance and performance scrutiny panel on Tuesday, September 14.

Fay Hammond, the council’s executive director of resources, told the panel an extra £10 million had been put into the local authority’s reserves at the end of last year to deal with ongoing Covid-19 costs.

The report says the government provided additional support for pandemic-related costs for the 2021/22 financial year, including an additional grant of £10.5 million, but had indicated there would be “no further support beyond the current financial year”.

It adds that the council is expecting a “surge in demand” for adults’ and children’s social care, while the growth in demand for SEN transport is also higher than expected. It also had to house 300 additional families in temporary accommodation during 2020/21. 

Labour’s Cllr Tim Leaver warned the Government’s plan to end the furlough scheme at the end of September could have a knock-on effect on Enfield’s economy and the council’s finances. He added that Covid-19 had “not gone away” and it was likely to be two to three years before vaccines for the current variant are rolled out across the world.

Cllr Leaver said: “£10 million looks like a large number but probably won’t be. It will be interesting to see what we can develop over the next three to six months.”

Cllr James Hockney, a Conservative panel member, asked how the council was managing its debt repayments, which he claimed were set to rise to £17 million per year.

Ms Hammond replied that the increase was reflected in the medium-term financial plan but the figures needed to be refreshed, as the council’s level of borrowing had “stabilised” last year and was lower than expected.

Committee chairman Cllr Birsen Demirel noted that members were concerned about borrowing but said the council had to borrow to serve its communities in the face of growing demand for services.

A separate presentation to the committee revealed the council could gain an extra £17 million a year from 2024 thanks to a government funding review. However, some councillors raised concerns that trends affecting the borough such as a decline in the working-age population could cancel out any funding increase.