Coronavirus pandemic ‘wiping out’ town council finances

LYME Regis Town Council is facing serious financial concerns in the wake of the coronavirus pandemic, with reserves currently expected to drop by more than £900,000 over the next year.

Lyme Regis has often been described as a “rich council” in recent years, with reserves at one point standing at £1.3million and the council handing out more than £100,000 in grants to local organisations each year.

But with a heavy dependency on tourism-related income and a major capital project currently being carried out – the resurfacing of the flat roof above the Amusement Arcade, Antiques & Craft Centre and SWIM on Marine Parade – the council is now having to hold discussions on how it can strengthen its financial position and prevent itself from becoming insolvent.

In April, as lockdown measures first took hold, the council’s reserves stood at £969,794 but by June this had dropped to £581,674.

Although car parks are now open at the Monmouth Beach caravan and chalet park is expected to open in July – the council’s tow biggest sources of income – financial forecasts shown that the reserves are expected to continue dropping over the next year.

By October they are expected to drop to £496,288, when the council enters a “warning” phase as this is only 40 per cent of its opening balance, and by January 2021 the authority will be breaching policy as the figure drops to £229,531, less than 20 per cent of its opening balance.

By the end of the financial year in March 2021, the reserves are predicted to be just £67,000. However, town clerk John Wright has warned that is currently it very difficult to make accurate financial predictions due to the constantly-changing circumstances, and these figures could vary by anything up to £200,000 either way.

In a report presented to councillors, the town clerk explained the assumptions on which the financial predictions had been made.

Car parking and amenities such as the mini golf, expected to open in July, are predicted to make 50 per cent of their historic income. The council is expecting to receive 75 per cent of income payable in 2020-21 from the chalet and caravan park and commercial rent is expected to drop from £190,000 to £120,000 as the council is aware of some tenant in financial difficulties.

The town clerk has admitted that the council does have a financial “issue”, adding that the pandemic was “wiping out our reserves”.

He has now called a special virtual meeting of the council specifically to discuss this and measures which could be undertaken to improve the current outlook. This meeting will be held in private due to the “sensitive” subject matter.

Speaking during the public forum of this week’s virtual full council meeting – the first to be held in public since lockdown was introduced – former councillor Steve Miller questioned whether the council was taking any measures to ensure it “does not go bust”.

The town clerk reported that all non-contractual expenditure had been stopped, that many staff have been placed on the furlough scheme and the council had been seeking funding from elsewhere, including government grants, but had so far been unsuccessful in this. He has not given any further details of the money-saving measures to be discussed at next week’s private meeting.

Office refurbishment put on hold

Councillor Michaela Ellis said this was the “most important issue” the council needed to be discussing.

Looking at the list of decisions made by the town clerk and mayor during the lockdown period, she said she was concerned about money being spent on the proposed council office refurbishment, which she suggested should be put on hold until they had a better idea of their future finances.

Deputy town clerk Mark Green said that urgent work requited to a lintel at the office would go ahead, which would only cost between £2,000 and £3,000. An architect had drawn up proposals for the office refurbishment and an invoice for this had now been received, but there was currently no intention to spend any further money on the project.

Councillor Stan Williams said he was “deeply concerned” about the council’s finances, and questioned whether outstanding payments from Monmouth Beach chalet owners had been chased up, and whether Dorset Council was paying for use of town council land near the Cobb.

“Monmouth Beach used to be out goldmine and it could be again,” he added.

“We need to me awake and we are not awake on these issues.”

The Mayor of Lyme Regis, Councillor Brian Larcombe MBE, said the council’s reserves had been “grown quite dramatically” in previous years, in part to pay for “essential asset maintenance” that had to be carried out, such as resurfacing of the flat roof area, which is estimated to cost £600,000.

He said the reserve they still had was much larger than many other local councils, although this did not mean it was not going to be difficult as the virus had “hit everyone in different ways”.

The mayor later added that the pandemic had shown them that the town’s dependency on tourism-related income had become too high. Councillor Rob Smith agreed, adding that a second wave of coronavirus or any other kind of crisis could hit the council’s finances again in the future.

Councillors are now expected to meet virtually at the beginning of July to discuss how the town will be reopening as lockdown measures are lifted, and the measures that need to be taken to improve the financial situation.

Although the meeting will be held in private due to sensitive financial matters, the mayor has told LymeOnline that a full statement about the measures to be taken will be issued afterwards.

Woodmead Halls
About Francesca Evans 2527 Articles
Francesca grew up in Lyme Regis and has worked in community journalism in the area since 2011, having gained a First Class Honours degree in journalism and her NCTJ qualifications at Southampton Solent University.

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