Windsor and Maidenhead council could become first in country to file for bankruptcy as local authorities faces £5billion black hole due to coronavirus crisis
- They would be the first to file for bankruptcy because of the coronavirus crisis
- The council depends on tourism money from Windsor Castle which is closed
- They have used their £6million in reserve cash after the government’s £3million
- Here’s how to help people impacted by Covid-19
The Royal Borough of Windsor and Maidenhead Council could be the first to file for bankruptcy because of the coronavirus crisis.
The Tory-run borough depends on hundreds of thousands of pounds in tourism money that Windsor Castle brings.
They received almost £3million as part of the government’s £1.6billion funding package but are considering issuing a section 114 notice saying they cannot afford expenditure and their financial reserves are depleted.
The council says that even if they were given another £3million that housing and communities secretary Robert Jenrick is working on they would still be £2million short because of their exhausted cash reserves.
Pictured: Windsor’s famous Long Walk, an attraction for tourists around the globe. The Royal Borough of Windsor and Maidenhead Council could be the first to file for bankruptcy because of the coronavirus crisis as they consider issuing a section 114 notice saying they cannot afford expenditure and their financial reserves are depleted
Managing director of the Royal Borough of Windsor and Maidenhead Council, Duncan Sharkey, said: ‘None of us know what the figures are going to look like for income sources and so on by Christmas.
‘As it stands, we don’t have any confidence we’ll be able to balance the budget next financial year and we might not survive into next financial year before issuing a 114.’
Mr Sharkey said that the coronavirus crises mean less commercial money but more spending obligations.
It is estimated coronavirus would cost his council £14million as a result of extra service costs.
More than 1.6million paying customers visited Windsor last year which the borough has not had this year while it has simultaneously used all its £6million in reserve cash.
The council relies on hundreds of thousands of pounds from tourists who come to visit Windsor Castle which is closed because of the coronavirus lockdown
Mr Sharkey said: ‘A section 114 is usually about getting council as a group to look at something that they don’t want to consider.
‘That’s not the case here. Here the councillors have all been very clear, cross-party, to do what it takes to solve these problems.’
The Royal Borough of Windsor and Maidenhead Council would be the second local authority to issue a section 114 in two decades after Northamptonshire County Council in 2018.
In total councils across the country are facing a £5billion financial black hole because of the coronavirus crisis.
Analysis done by the largest 44 authorities in the country show that if expenses keep increasing and income keeps decreasing councils will be short £5billion.
Newcastle-under-Lyme Borough Council has used its £65k additional funding and also depleted its reserves leaving only £1.5million.
Oxfordshire councils said they stood to lose £100m as a result of coronavirus costs.
Greater Manchester Combined Authority, said that coronavirus will leave the city’s ten borough councils £541 short.
A Government spokesman said: ‘The Secretary of State has announced a total of £3.2 billion of funding for councils to support their response to the pandemic.
‘This is a significant package of support which responds to the range of pressures councils have told us they are facing and will support them to protect vital services.’