Coronavirus costing Powys council £3.5m a month

Powys council is one of 22 councils facing losses due to the pandemic

The coronavirus pandemic is costing a council £3.5m a month in lost income, a report has said.

By June, Powys council will be more than £10m out of pocket and tax receipts are down £600,000 since the start of the new financial year.

The authority's finance chairman Aled Davies told cabinet the figures were "quite frightening".

The Welsh Local Government Association (WLGA) said budgets were being strained which will threaten local services.

Powys council wants to see a change in legislation, so all local authorities can borrow more money during the pandemic.

Mr Davies, who is also deputy leader, said: "The net impact is going to be £10m for the first quarter of the financial year and it doesn't look to be getting any better.

"Our reserves will have been wiped out by June and we will have to cut services dramatically.

"I can't see central government allowing council bankruptcy, but clearly we have to balance our books.

"We could fill that funding gap in the short term by borrowing more, or borrowing different. But, we cannot pay it back overnight, it's going to take time."

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Meanwhile, Gwynedd council said it has already lost £9m in income and faced £2m in extra costs.

Leader Dyfrig Siencyn said authorities across Wales needed urgent help, having lost out on roughly £170m since the outbreak.

He added: "That's a massive chunk out of our budgets and many councils are concerned about their survival.

"How can they set a budget with that kind of loss?"

The UK government announced extra funding for English councils last month, and said the Welsh Government was to get £95m as a result.

A WLGA spokesman, which represents all Welsh councils, said: "Budgets are being strained by the combined pressure of huge extra costs and loss of revenue which will threaten the sustainability of our essential local services in the future.

"Local authorities and Welsh Government will continue discussions to protect councils, for the sake of communities, in the tough months ahead and beyond."