The coronavirus pandemic could blow a £50 million hole in Perth and Kinross Council’s spending plan, The Courier can reveal.
The eye-watering cost of battling Covid-19 means the budget approved by councillors earlier this year will be ripped up and recalculated, while large-scale projects like Perth City Hall and the Cross Tay Link Road will need to be re-assessed.
There is also a question mark on how council tax – raised by 4.28% in March – could be affected.
So far, fighting coronavirus has cost Perth and Kinross Council about £25 million in extra expenditure and reduced income.
Number-crunchers believe that figure could more than double, depending on how long the crisis continues and how much financial assistance is provided from both UK and Scottish governments.
Chief Executive Karen Reid said the council is planning a “creative and courageous response” to the virus.
She said the Perth and Kinross Offer, a new system that gives communities a bigger say in how services are run, will help the council to adapt to the huge financial challenges ahead.
“The coronavirus pandemic has had an enormous human cost. It is also the greatest challenge public services have faced.
“But people across Perth and Kinross have shown remarkable resilience in the face of such adversity.”
Ms Reid said: “The council has responded and responded well to the crisis, helping vulnerable residents and ensuring more than £32 million has been paid out promptly to support businesses affected by lockdown.
“But even when restrictions are lifted entirely, we will still have work to do as we build back an even better council for residents, staff, businesses and visitors alike.”
The council has lost about £3.6 million in income from, amongst others, parking charges, planning, licensing and school payments.
It has had to pay an extra £6.8 million to meet the cost of school meals and providing support to Tayside Contracts, for example.
The authority says it is committed to supporting “wherever possible” organisations such as Live Active Leisure, Horsecross and Culture Perth and Kinross.
Council leader Murray Lyle added: “The issue of council tax is something that will have to be decided at a future date, although so far no one has been discussing raising it or otherwise.
“The challenges will be designing a service that is cheaper to deliver, yet still gives a high quality service that communities have grown to expect.
“There is no doubt we will have to change how we operate in many ways.”
He said the capital budget – including projects like the £20m transformation of city hall – will be discussed later this summer.
The region has seen a 94% rise in unemployment throughout April, when there was also a 202% increase in the number of welfare grants requested.
