DEALING with the devastating effects of the coronavirus pandemic will cost at least double what a Teesside authority has received so far.

That was the warning offered up by Middlesbrough Council’s chief accountant as leaders seek a way out of the crisis in the coming weeks, months and years ahead.

Justin Weston told councillors the pandemic was “the most difficult set of circumstances” he’d ever encountered in 25 years of preparing council accounts.

And he revealed the bill from lost income, inability to make savings and other costs was likely to be more than double the £9m it had received from the Government. 

Mr Weston said: “That puts us in quite a difficult financial position. 

“If you look in the council accounts, the reserves we had available have reduced over time – particularly with the revenue overspend we had in children’s services.

“We had a £6.5m overspend which is reducing the reserves available to the council.”

Council leaders were due to agree a coronavirus recovery plan and the launch of a revamped financial plan for the authority at an executive meeting on Tuesday afternoon. 

A council report revealed the “current gap” was £8.8m in responding to the pandemic – but that this figure was likely to grow given the ongoing response and recovery needed. 

The report adds: “If no further funding is made available from (the) Government, it will require mitigation across the life of the council’s medium term financial plan (three years).”

Last week, Middlesbrough Mayor Andy Preston warned of tough times ahead and called for more help in a joint call with Chief Constable Richard Lewis and Stockton Council leader Cllr Bob Cook.

The mayor said: “I know what’ll help is loads of new money – that’s what we need. 

“That’s not going to happen.

“We are fearful that we won’t be fully compensated for a lot of indirect costs from Covid.

“It’s going to put us in a situation where we’ve gone into our reserves – and we are morally and legally obliged to build those reserves back up.

“Unless we get more money from Government, we’re going to be in an extraordinarily tight position – and the way you spell that out is in four letters: C, U, T and S.”

Mr Weston told the latest corporate governance and audit committee a number of councils had said the pressures of Covid-19 were putting them in an “impossible position” in the wake of ten years of austerity. 

The finances chief added: “They’re bearing significant budgetary challenges as a result of Covid-19 – which means their reserves are reduced to a level below what they would expect to operate reasonably on. 

“For Middlesbrough, we’re reporting into the Government on a monthly basis and our position is very similar to most councils.”

The Government has given councils almost £3.2bn to deal with the direct costs of coronavirus.

Middlesbrough chief executive Tony Parkinson has said he is confident the Government will make good direct costs of dealing with the crisis in future.

But question marks remain about lost income, an inability to save money and some of the indirect effects the pandemic may bring.

Mr Weston told the audit committee what this uncertainty could mean in balancing and setting budgets in future.

He said: “Initially, the Government said they would give us all the funding but they seem to have backtracked a little bit on that.

“We could have a multi-million pound pressure from day one. 

“We’ve then got the children’s costs, and the (lost) savings that would result from not being able to operate in the way we’d intended when we set the budget.”

Spiralling demand on residential placements for looked after children contributed to Middlesbrough Council overspending by £6.5m on children’s services in 2019/20. 

The accounting chief said the pressure and risk was “definitely on” and the council needed to be lobbying central government for more money.

He also warned next year’s budget would be very difficult to set – and welcomed the “fundamental review” of finances to be passed on Tuesday. 

Mr Weston said: “That’s the right course of action but there is certainly financial risk around local authorities and Middlesbrough.

“We’re particularly susceptible to financial pressure on children and high infection rates from covid.

“Everyone needs to understand that position – it’s not particularly healthy.”

Despite the figures, the council’s chief executive has warned the council simply cannot yet put an accurate figure on how much the final coronavirus bill would be.

Mr Parkinson believes the council will have a firm figure by September but stressed it was a very complex situation. 

Meanwhile, councils have been given extra money to set up “local area outbreak plans” to respond to any flare ups of the virus before the end of this month.

Middlesbrough has received £1.6m to set up its scheme while Redcar and Cleveland was given £1.1m by the Government,