It’s being estimated that the financial cost of the coronavirus pandemic to Swanage is likely to total over half a million pounds in loss of income to the town council.
At the Swanage Town Council extraordinary meeting conducted online, yesterday evening, Monday 29th June 2020, the Town Clerk, Martin Ayres presented a report that detailed the full financial impact of the pandemic on the council’s most significant income streams.
A loss of £300k in car parking income
The loss of income from car parking has hit the town’s finances the hardest, with the waiving of parking charges during April and May 2020 leading to a loss of £105k during those months. Charges were fully reintroduced on the 19th June 2020 but the revenue was only £5k, when it was expected to be around £65k.
It’s anticipated that with many events cancelled, the car parking income is not likely to return to normal levels for the rest of the summer and it’s expected that revenue will be down fifty per cent during the second financial quarter. So overall this means a loss of £300k in car parking income for this financial year, when the town was expecting to receive around £556k.
The second biggest loss of income – the council-owned beach huts
The second biggest loss of income of about £73,500 is anticipated to be the money that would normally be received from renting out the council-owned beach huts. The council was expecting to receive in the region of £127,650. The report says:
“Cancellation of bookings, deferrals to next year and social distancing have all had a significant impact on projected income.”
In addition, while the beach huts have been empty, the council decided to get the work done to replace the old beach hut doors that had started to rot due to their exposed coastal location. This has meant that the cost has been moved forward into this financial year, so it’s estimated that even with some beach hut rental income later in the year, there will be an overall loss.
Rental income from tenants
With many local businesses facing a tough economic time, the town council has realised that not all its tenants will be able to afford their rent. The report says:
“The Town Council has received requests for reductions in rental income from a large proportion of its tenants. Council will need to determine its policy in respect of rent collection over the coming months. This matter is unlikely to be concluded until all parties know how business holds up during the peak season.”
At this stage the council is estimating that it will receive only about three quarters of the expected income, so instead of getting about £200k, it will probably receive about £150k. At the meeting, a panel was formed to consider the requests from businesses for rent reductions.
Investment income is also expected to be down by £35k, so the council is now only expecting £150k.
In addition, The Visitor Services Manager, Culvin Milmer has estimated a further loss of income of £12k from the Boat Park, £22,000 from Swanage Information Centre income and £18,000 from Beach Gardens, totalling £52,000.
Swanage Town Council estimated income and losses for 2020/21
- Car parking – estimated income £556,085 – potential loss £300,000
- Beach hut rent – estimated income £127,650 – potential loss £73,500
- Property rents – estimated income £202,505 – potential loss £50,625
- Investment income – estimated income £185,000 – potential loss £35,000
- Money from Dorset council (precept) – estimated income £732,390 – potential loss £0
The good news is that the money that Swanage Town Council receives from Dorset Council will be unaffected, as it is legally obliged to guarantee the payment of £732,390 for this year.
Also there will be some savings to partially offset the losses due to reduced staffing levels, less cash collection and a reduced fee for toilet cleaning for the period when they were closed. There’s also a possibility that the council will get a reduction in its business rates bill.
Most non-essential spending has been put on hold
To address the shortfall in funding the council said it could move funds out of some of its earmarked reserves into the general fund. However, this would mean that the money couldn’t be spent on other things that had been planned. In the meantime it said that all agreed capital projects and repairs and maintenance works were proceeding for the time being but most non-essential spending had been put on hold.
Chairing the meeting, Swanage Town Mayor, Mike Bonfield praised the work of the council staff and said that he wished his thanks from the whole town council to be passed onto the staff who had worked hard under difficult circumstances over the last few months.
For further information
Swanage Town Council’s financial report presented to the extraordinary meeting Monday 29th June 2020