Impact of COVID-19 on Derry City and Strabane District Council contines with financial challenge in reopening leisure facilities, committee told

The loss of service income as a result of the COVID-19 shutdown has already had a huge impact on the civic finances.

But the resumption of business - expected later in the summer- is going to pose further challenges, DC&SDC Lead Finance Officer Alfie Dallas has told the Stormont Communities Committee.

Mr. Dallas told MLAs how funding from the Department for Communities and the Coronavirus Job Retention Scheme (CJRS) had helped the council deal with a loss of income from leisure, off-street car parking, planning and building control.

DfC, for example, has provided the council with £1.291m to cover 60 per cent of losses while the CJRS scheme has made up the deficit.

But as council reopens more workers will have to be brought off furlough meaning that stream of subsidy will eventually come to an end.

Mr. Dallas told the committee: “If we take the example of leisure and how it is currently being funded, in the first quarter, the 60 per cent funding from DfC is effectively funding 60 per cent of our losses. The other 40 per cent is being effectively recouped through the furlough scheme.The reopening of facilities will effectively remove that element of funding from us.

The accountant, who briefed the committee alongside other senior council officers from across the north, warned there would also be costs associated with making sure leisure facilities are safe before re-opening.

More staff will be needed to administer a new post-COVID social distancing regime. Some will have to come off furlough and they will obviously have to be paid.

“I think another really important point to put is that there are up-front costs from reopening facilities. There are facilities that have been closed for a couple of months that require health and safety checks to be carried out and works for bringing the premises back to operational use. Also, the staffing of those facilities, more supervision will be required and new ways of working for staff, which will place pressure on the staff budgets as they sit. So we see the reopening of facilities to be an additional cost pressure for us in the short term,” he said. It will be some time, Mr. Dallas suggested, before any degree of financial equilibrium is arrived at. “We are planning in an environment of significant uncertainty, one in which I think we can say with no doubt that our income is going to be significantly impacted in the short to medium term and possible a very long time before it’s restored to our budgeted levels.”