NEWPORT council is facing an overspend of more than £5 million in this year’s budget as the impact of coronavirus is felt.

The pandemic is predicted to cost the city council £1.7 million in additional costs and £3.7 million in lost income, a cabinet report says.

And while additional spending will be reimbursed in full by the Welsh Government, it is unclear how much funding will be provided to cover lost income.

MORE NEWS:

The Welsh Government has said £78 million will be shared between all councils in Wales to reimburse lost income, but how much will be allocated to each is unknown.

A council report says this funding will be “insufficient to cover all councils estimated losses”.

“It seems likely at this time that loss of income will be a significant issue and challenging unless further financial support is confirmed,” the report says.

Newport council waste services are expected to overspend by £956,000 this year, with a £459,000 reduction in trade waste and special collections, £352,000 due to downturn in commercial activity at the landfill site and a £120,000 hit to household waste recycling centre income.

The impact on car parking income, including parking enforcement, is £732,000.

And the education budget is predicted to overspend by £1 million, with £962,000 of this due to money lost in respect of Gwent Music, which is not expected to get any income until September.

Additional costs include an extra £929,000 spent on housing, which includes helping the homeless and £645,000 on waste and cleansing.

These costs can be recovered, but the report assumes that “no further funding is available in respect of homelessness” from Welsh Government.

The report also highlights a predicted overspend of £1.9 million across schools in Newport as “an area of significant concern”.

Money will need to be taken from other council budgets, or from reserves, to cover costs.

The report says this is because school reserves have been “depleted significantly” over the last two years and are now ‘insufficient’ to cover the predicted overspend.

“The current level of in-year overspending is unlikely to be resolved after this financial year by current ‘deficit recovery plans’ given the size of that or deal with the large, historical deficits which have been built up,” it says.

“It has the real potential to negatively impact on other council budgets and reserves for more than this one year.”

Nine schools are expecting to be in debt by the end of this financial year, with an overall deficit of nearly £4 million.

A report says officers are working with schools to ensure recovery plans are in place and that spending is reduced.

The council’s cabinet will consider the report at a meeting on Wednesday.