AS COUNCILS around the UK face bankruptcy because of coronavirus, Oxfordshire County Council’s leader has said ‘every option’ is on the table for how to deal with a multi-million pound black hole.

In May, the county council and Oxfordshire’s five district councils sent a letter to government claiming that they were facing a combined shortfall of £100m funding because of the unexpected extra costs caused by the pandemic.

Across the country, 150 local authorities are facing a total shortfall of £3.2 billion for the current financial year, according to a BBC investigation.

Out of those, at least five are on the verge of bankruptcy because of extra spending during the lockdown.

Oxfordshire, by comparison, is relatively safe, according to county council leader Ian Hudspeth – but he did not rule out cuts to services in the near future if the funding crisis was not addressed.

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The Conservative leader said: “The thing is, we are at the moment expecting a shortfall of £37 million for this financial year. We have to have a balanced budget every year.

“Unless the pressure has come down dramatically or we get additional funding from central Government we will have to consider every option. It is as simple as that.”

Mr Hudspeth also speaks on behalf of UK councils as part of the Local Government Association, and said that in meetings with Government ministers he was highlighting the extra costs Oxfordshire and other areas were facing.

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County council leader Ian Hudspeth

The county council is responsible for maintaining roads, running libraries, disposing of rubbish, and social care for both children and adults.

It had an unexpected budget shortfall of £64 million as a result of the pandemic, but has been given £27 million by the government, so is now expecting to be £37 million out of pocket.

The vast majority of the shortfall, £57.6m, is because the county has spent extra money on services. The rest is because of lost income.

It has a large amount of savings called 'reserves', but £102 million of this is set aside for future projects, so it only has £4.8 million of ‘free’ cash.

The county council's Labour Party opposition leader Liz Brighouse said services had already been ‘cut to the bone’ in the past 10 years after successively smaller budgets from centre Government.

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Liz Brighouse. Picture: Ed Nix

She added that the council was facing growing social care challenges, including an ageing population of people with learning disabilities and more children going into care, which meant extra money had needed to be put into reserves in case they need help in the future.

Ms Brighouse said: “Anything resembling the budget cuts of austerity would be completely out of the question.”

Oxfordshire’s district councils, which look after housing, planning permission, bin collections and leisure centres, are also facing multi-million pound black holes.

Oxford City Council has a £9.4m shortfall and expects a further £14.2m in the next few years. It has been given £1.6m by the Government. It has £42m in reserves, but only £3m of this is freed.

• West Oxfordshire District Council has a £2m shortfall and has been given £1.1m by the Government. It had no up-to-date information on reserves.

Vale of White Horse District Council has a £1.8m shortfall and has been given £1.4m by the Government. It has no free reserves.

• South Oxfordshire District Council has a £2.4m shortfall and has been given £1.4m by the Government. It has £3.6m in reserves which have not been earmarked for other projects.

• Cherwell District Council has a £4.7m shortfall and has been given £1.6m by the Government. It has £1.3m in reserves which are free.

Out of all of Oxfordshire’s councils, Oxford City Council is the only one which has made use of the Government’s furlough scheme.

The Government has helped to pay the wages of between 40 and 50 city council staff at any one time during the pandemic, as well as a further 200 people at the council's company Oxford Direct Services (ODS), which collects bins and carries out building work.

Only those who could not be put to work in other jobs were furloughed.

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A city council spokesman said: “The furlough scheme was a welcome way to help protect jobs and along with a number of councils up and down the country we chose to utilise it.

“As soon as individual areas of work have been able to restart, we have brought people off furlough and back to deliver in their own service area.”

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ODS binmen working in Oxford. Picture: Maciek Tomiczek

The city council in particular has seen a large shortfall because it relies on renting out shops and offices, and selling the services of ODS to other councils, to make money.

Council documents discussed at a meeting on Wednesday showed that rent collections have fallen for the city council during the pandemic, and ODS is projected to pay back a smaller amount of profit than normal.

Before the lockdown began, councils across England were told by the Government to spend what they needed to in order to deal with the crisis.

In a conference call with 300 English council leaders in March, Robert Jenrick, the secretary of state for housing, communities and local government, said: “Everyone needs to play their part to help the most vulnerable in society and support their local economy. The Government will do whatever is necessary to support these efforts.”

This was taken as confirmation that councils would be reimbursed for any coronavirus-related spending.