THE cost of the coronavirus pandemic could lead to town centre regeneration schemes in Somerset being scaled back or scrapped.

South Somerset District Council has earmarked £7.5million towards regeneration projects in Yeovil, Chard and Wincanton, with construction already under way on Chard’s new swimming pool and leisure centre.

However, the council has said the cost of the pandemic could reach £10million by the end of the year – even if council-run facilities like the Octagon Theatre and Westlands are able to reopen.

This means the council will be forced to dip into its reserves to ensure services keep running – and that there may be less money for big projects in the future.

A report on the council’s financial situation was published ahead of a district executive committee meeting on June 4.

Council leader Val Keitch said: “At the start of the crisis the government encouraged all councils to do whatever it takes to support their communities, and I believe we have.

“The government said they would back us financially. As a result, under the encouragement of government we did not furlough staff and cut our costs, but redeployed them to services to support businesses and residents.

“Whilst we have had some money from government, the amount we have received only covers us for just over one month of additional cost and lost income.

“The government has indicated we can expect no more and so we may have some difficult choices to make, that may have an impact on our communities.”

The scale of the problem

The council has received a total of £1,737,353 from central government towards the additional costs associated with the coronavirus – an initial grant of £64,586, with a further £1,672,767 being provided at the end of April.

However, the council has estimated the pandemic will set it back £10,374,000 by the end of the year.

Of this, £2,290,000 is costs actually incurred by the crisis – including just over £1million for providing additional IT services to make home working possible for its staff, and £990,000 to prevent people from becoming homeless.

The remaining £8,084,000 consists of income from the council’s services and facilities that it has lost as a result of venues having to close or services being restricted.

This includes £1.89million in rent from the council’s commercial acquisitions, and £970,000 from lost car parking fees as a result of car park use falling by 30 per cent.

The Octagon Theatre has already paid out more than £52,000 in refunded tickets and is expected to lose £857,000 by the end of the financial year if trends continue.

The Westlands Entertainment Venue is also expected to lose £405,000 over the same period.

Jo Nacey, the council’s chief financial officer, confirmed in her written report that the regeneration projects may have to be scaled back or stopped if the council was forced to use its existing reserves.

She said: “If we were required to use earmarked reserves, this would lead to the reduction or cessation of programmes those funds are meant for.

“This includes regenerating our town centres and high streets which have been suffering from the changes in shopping habits – a process accelerated by the coronavirus. This includes our programmes in Chard, Yeovil and Wincanton.

“All these programmes are now potentially under threat of needing to be scaled back or stopped.”

Where things stand with each scheme

Construction is proceeding on phase one of the Chard regeneration scheme, which will deliver a new swimming pool and leisure centre by the summer of 2021.

Phase two (involving the redevelopment of Boden Mill and Holyrood Lace Mill) is expected to come forward for discussion later in the year.

The council recently secured around £1million from central government to improve the appearance of the A30 High Street as part of phase three of the scheme.

Work on improve Yeovil town centre was due to begin later this year after the public realm design guide was approved by the council in March.

The guide – part of the Yeovil Refresh scheme – covers improvements to the Bandstand, The Borough, Middle Street, Lower Middle Street and Westminster Street.

Proposals designed to regenerate Wincanton town centre are at a much earlier stage than those for Chard or Yeovil, with a revised strategy expected to come forward by the end of the year.

What happens next?

Ms Nacey said the future of these schemes depended on how much of the tab for the coronavirus crisis would end up being picked up by Westminster.

She said: “Instead of stopping them, what we would wish to be doing is working with government and local partners to accelerate the delivery of the schemes, as they all have a role to play in the recovery of our communities and the economic recovery.

“Depending on what stance the government takes on council finances, this may not be possible.”

Councillor Peter Seib, portfolio holder for finance, added: “We entered the Covid-19 crisis in a good financial position, having embedded the efficiencies of transformation and established new commercial funding streams.

“Unfortunately, it seems that the government expects councils to spend even their earmarked reserves on Covid-19, and it’s unclear whether it will provide further help.

“If the government does not honour its original commitment, that choice will penalise the people of South Somerset more than most, forcing difficult choices on local services and on initiatives that would help our local economy and communities to recover from Covid-19.”

The district executive will discuss the report further when it meets virtually on June 4 at 9.30am. The meeting will be live-streamed via the council’s YouTube channel.

A draft “recovery plan” will be brought back to the same committee for discussion in July.