North Yorkshire council's major projects at risk as pandemic hits its finances

Hambleton council's chief executive Dr Justin Ives said the authority faced a £5m budget black hole as a result of the pandemic, largely as a result of a sharp decline in income sources such as council tax and leisure centres.

The Tory-run authority had a £6m shortfall but has been handed just under £1m from the Government as part of its £3.2bn bailout of the nation's town halls.

Though it received only £37,000 in the first tranche, the council was handed more than £900,000 in the second tranche in recognition of the impact of the loss of many of its sources of income. Facilities like the Thirsk and Sowerby Leisure Centre have been closed since March.

Dr Ives said the authority had £17m in reserves but they were already earmarked for specific projects which could be put at risk if it had to use them to plug the hole in its budget.

He told The Yorkshire Post: "We have things that we want to do with those to help the community so it's about investment in leisure, it's about the [Treadmills development of the former Northallerton Prison site].

"There's a number of projects and initiatives that we've got ongoing that those reserved are there to support and without government support we'll have to re-look at those initiatives to see how we finance them moving forward."

He said that his council was not currently having to consider a Section 114 order but that "if this lockdown were to continue for a year I think the council would have very tough decisions to make around some of its service provision".

He added: "But I think we've got enough wiggle room to allow us to make those decisions and still be able to function as a local authority. I know others don't have that luxury."

Dr Ives called for the Government to change the rules so local authorities can borrow for day-to-day revenue expenditure. Currently they can only borrow for capital projects.

North Yorkshire - why schools are the eyes and ears of the system

The return of children to school later this year after weeks spent at home will likely prompt a rise in fears over their safety being reported to local authorities to deal with, according to a Yorkshire council chief executive.

North Yorkshire County Council's Richard Flinton said Ministers needed to appreciate the knock-on effect of the impending economic downturn on local families when they consider the long-term funding needed for councils.

The authority, which is responsible for social care, education and transport in England's largest county, is spending an extra £65 million during the coronavirus pandemic.

The council’s leader Carl Les has warned that the £26 million in funding it has been given by the Government so far will not even cover half of the cost of the measures it was having to take.

Mr Flinton said he was less likely to have to issue a Section 114 notice - effectively declaring the authority to have run out of money - than some of his Yorkshire counterparts.

But he said the medium-to-long term situation was "the most worrying situation" as it would go on incurring costs for months to come.

He estimates that the county council will spend around £10m in the next six months buying personal protective equipment and is pulling together large teams "to really man mark care homes, to try and make sure they're as safe as they reasonably can be".

Mr Flinton said the Government needed to give a commitment to helping councils pay for future costs they might incur.

He said: "When you get schools going back, we would expect to suddenly get more reports of children safeguarding issues, schools are one of the eyes and ears of the system that have not been operating.

"So once you suddenly get all schools going back you imagine that teachers and other professionals, GPs etc will suddenly seeing things that we will need to investigate that are worrying around the safety of children.

"These things will ramp up in the future, in particular if you have got more and more families, going into economic crisis, then all of these things will knock on into our services, and the government has got to make sure that we're in a position to respond."