In recent days, the national press has widely reported councils may have to declare themselves effectively bankrupt as a result of the pressures of the coronavirus pandemic.
Financial challenges have arisen throughout the pandemic, the implications of which could be felt by councils for some time.
Waste and recycling budgets could suffer, as councils say they have been left with large budget deficits as the cost of dealing with rising household waste volumes increases, yet other revenue streams have fallen.
Many have also said that government support has not gone far enough.
The Local Government Association (LGA) is the national membership body for local authorities. It told letsrecycle.com the surge in demand for waste services and compliance with Covid-19 guidance saw councils’ costs for environment and regulatory services increase by more than £100 million between March and May.
Councillor David Renard, environment spokesman for the LGA, told letsrecycle.com: “Councils continue to face increased cost and demand pressures as a result of Covid-19 at the same time as seeing a significant drop in income that they rely on to fund services. This is unsustainable.
“Vital emergency funding from government has helped meet extra cost pressures and lost income in recent months but councils will need further funding to meet ongoing Covid-19 pressures and to keep services, including waste services, running normally.
“The government needs to meet all additional costs councils are incurring as a result of the pandemic and provide a guarantee that it will compensate them for all lost income from fees and charges and other sources.”
London Councils represents the 32 London boroughs and the City of London. It says it is “extremely concerned” about unsustainable pressures on boroughs’ finances due to Covid-19 and the implications for resourcing essential local services, including the capital’s waste and recycling provision.
It told letsrecycle.com boroughs forecast an estimated £14 million of additional expenditure on waste management during 2020-21 as a result of Covid-19. This is part of an estimated total of £1.8 billion of extra pressure on the London boroughs’ finances this year.
Multiple factors contributed to this extra expenditure on waste management.
London Councils notes there has been an increase in household waste due to people staying at home during lockdown, with virtually no commercial waste produced. Commerical waste is paid for by the companies producing it; now all waste is paid for by the relevant local authority, London Councils told letsrecycle.com.
Boroughs have also needed additional capacity to cover self-isolation and illness among workers to ensure the delivery of services is maintained throughout the pandemic.
“The pandemic has blown an enormous hole in council finances”
And, stronger PPE requirements and measures to enable social distancing also contributed to extra costs. Crews are no longer able to share the cab of refuse collection vehicles, so other means of transport have had to be provided.
Councillor Peter John, chair of London Councils, said: “Boroughs have played a crucial role in London’s response to Covid-19, but the pandemic has blown an enormous hole in council finances.
“We’re warning London MPs that boroughs face a £1.3 billion funding shortfall this year due to Covid-19 – even with the government’s emergency support. This massive gap has severe implications for local services across the capital.”
On 18 April the government pledged councils across England would receive £1.6 billion in additional funding.
This second tranche of funding took the total provided to local authorities by the government to £3.2 billion.
The funding was intended to go towards continuing to provide essential services, including assistance for the public health workforce and fire and rescue services.
However, even with this second tranche of funding many councils face significant shortfalls.
Lee Marshall is the chief executive of the Local Authority Recycling Advisory Committee (LARAC), an organisation which represents local authority recycling officers and those working in related posts.
“It is still early days so at the moment it is difficult to know what the full impact on future local authority waste costs will be”
He told letsrecycle.com the impact of the coronavirus pandemic on councils’ waste budgets in the long term was difficult to predict.
He said: “It is still early days so at the moment it is difficult to know what the full impact on future local authority waste costs will be.
“If we see more home working that is likely to increase the amounts of waste councils have to deal with.
“As an essential service, it is possible funding for waste management may be prioritised ahead of other things.
“While statutory services are always likely to be prioritised, it means taking funding from other services; there needs to be more funding for local authority services generally.
“We will see EPR funding coming to councils from 2023 and that will be a long overdue boost.”
Concerns remain that waste services could be cut by struggling councils.
Last week, Jas Athwal, leader of London borough Redbridge’s council, hit out at the government for failing to compensate councils for the cost of responding to the coronavirus pandemic.
Cllr Athwal says Redbridge has been left with a £45 million shortfall, and without compensation from the government services such as waste collection are at risk.
He said: “Without these funds, the services our residents and businesses value most, social care, libraries, household waste services and leisure facilities, will all be at risk.”
And, while recovery costs are of significant concern, the costs incurred as the virus still ravages the country continue to rise.
Derbyshire county council say that as a result of many residents staying at home during the lockdown, the amount of residual waste arisings across the county has substantially increased. The management of this increase resulted in an additional cost to the council of £810,000 between April and June.
The council had already incurred costs of £210,000 in April, with temporary arrangements for disposal of mixed dry recyclables required in North East Derbyshire, Chesterfield and Bolsover.
And, the council says it incurred costs of £10,000 due to fly-tipping at the county’s parks and countryside sites.
At the end of April, Derbyshire county council estimated the loss of income and the extra costs across all services incurred as a result of coronavirus could cost at least £32 million by the end of June. This is expected to rise to at least £50 million later in the year, the council said.
Similarly, on 29 May, Mansfield district council said it faced a £3.2 million gap in its finances as it continued supporting residents, communities and businesses. Mansfield says no services have been cut as a direct result of this funding gap.
It says its budget has been hit by a lost income of around £3.1 million, which includes lower than anticipated income from trade waste.
Thus, the financial implications of the coronavirus on local authority waste budgets are twofold: additional pressures have led to significant losses, while recovery could be a lengthy process.