SOMERSET County Council could have to find nearly £11 million of savings to make up for income lost during the coronavirus crisis.

The council has incurred significant costs across the board while trying to keep services and providers afloat during the pandemic.

Two substantial grants from central government have not covered these additional costs – meaning the council will either have to dip into its reserves or find further savings to make up the difference.

The council said it had recently increased its reserves and was not about to issue a Section 114 notice (which is used when councils effectively admit bankruptcy).

The council’s financial position was discussed at a virtual cabinet meeting held on Wednesday morning (June 17).

Sian Hedger, the council’s interim strategic finance manager, said in her written report: “The impact of coronavirus in the last few weeks of the financial year ending 2019/20 is manageable; however its risks and impact on 2020/21 and onwards are significant, and are still being identified.

“The government response to the economic impact and recovery is welcomed. However funds provided to the council as at May are insufficient to meet expenditure and loss of income identified.”

Up to June 5 (the most recent estimates available) the council has accrued additional costs of £43.1M because of the coronavirus crisis.

These costs include:

Providing 78 per cent of all the PPE required by schools, nurseries and key workers (£6M)

A ten per cent rise in funding to all care home providers to keep them financially afloat (£3.1M)

Supporting the supply chain on major building project (£2.3M)

Financial support for nurseries and childcare providers (£2.1M)

Bringing former care homes in Wellington and Yeovil back into use (£2M)

Running social care services seven days a week (£1M)

Supporting the four district councils with measures to tackle homelessness (£800,000)

The council received two tranches of funding from the government to off-set these costs – £25.6M in the first tranche, and £6.7M in the second.

This leaves an overall shortfall of £10.8M – which will have to be made up either by dipping into its reserves or with further savings in the years ahead.

Director of finance Jason Vaughan said in his written report: “The major impact of the coronavirus is in 2021/22, due to the projected reduction in income through business rates and council tax.”

The County Councils Network estimates the total funding shortfall for all 39 county councils in England could reach £2.5bn by the end of the crisis.

Bath and North East Somerset Council’s leadership has been accused of “burying their heads in the sand” after losing 20 per cent of its income.

Somerset County Council deputy leader Mandy Chilcott said: “We are not in a position where we need to consist posting a 114 notice, and our reserves are at a reasonable level.”

The council recorded a £6.4M underspend in 2019/20, and has increased its total reserves to £76.2M in the process.

An updated medium term financial plan – which sets out the council’s expected income and expenditure for the next three years – will be considered by the cabinet in September.