How Is the Pandemic Affecting Municipal Utilities?

All business areas of municipal utility companies are affected, primarily due to the sharply decreased demand, resulting in drastic revenue losses. In public transport, passenger numbers have significantly reduced, and swimming pools are poorly attended (currently they are even completely closed again). At the same time, operators face higher expenses to implement necessary protective measures and must spend additional money, for example, on masks and disinfectants. The gas and electricity sectors are also confronted with lower revenues. The consumption from large industrial companies has decreased so much that it cannot be compensated by the increased demand in private households (e.g., due to home office).

How Are Utility Companies Responding to the Revenue Losses?

To compensate for these revenue losses, extensive cost-saving measures must be taken. The question here is which projects can be postponed, as only the truly important projects can still be implemented in this situation.

What Is the Financial Situation in the Social Economy?

Since non-profit organizations are not allowed to generate profits, there are hardly any reserves in this environment. They are therefore heavily dependent on their current income and direct funders. Depending on the type of institution, financial resources come from various sources: from dioceses or from public funds.
Many issues are financed by municipalities, including women’s counseling, addiction counseling, housing benefits, or disability assistance. The municipalities themselves are primarily dependent on trade tax revenues, which are lower in the current situation. This will lead to an increased struggle for distribution between social issues and other projects, such as construction projects. While this development is not immediately life-threatening, the already limited scope for new projects, innovations, or expansions will shrink even further in the foreseeable future.
Dioceses are also recording lower tax revenues, as wages are reduced due to short-time work, and no church tax is paid on short-time work allowances. Thus, less money is available for social organizations from this source as well.

What Challenges Are Social Institutions Facing on the Ground?

In addition to these financing aspects, Corona also has a direct impact on facilities such as nursing homes or homes for the elderly or disabled. Many institutions are experiencing increased staff absence rates, as people are more likely to stay at home as a precaution even with mild symptoms. To compensate for these absences at least partially, other care staff are working more overtime. The occupancy of beds is also problematic because institutions only receive the corresponding grants and payments when beds are occupied. Moreover, Corona is causing immense additional costs. Extra masks, protective gowns, and disinfectants are needed, and due to the strict protective measures, staff require much more time for all tasks.

How Could the Nursing Staff Be Relieved?

Based on our projects, we see great potential in the industry to make the daily work of staff significantly more efficient. For example, patient data is still often recorded manually in the residents’ rooms, only to be entered into the computer afterwards. While the shortage of skilled workers cannot be eliminated in the short term and solely through the digitization of such administrative processes, it would give staff more time for actual work with and for people.

Were schools up to the challenges of the pandemic?

Serious weaknesses in the area of digitization became apparent in almost all schools, and unfortunately, there is a lack of consistent and systematic approach from official sources. I see data protection as one of the biggest hurdles here, as unfortunately, most data protectors would rather generally prohibit innovative and new topics than deal with them in a solution-oriented manner. Due to this ongoing discussion, uniform decisions are lacking, which has essentially forced teachers to go their own way. Thus, one used Microsoft Teams for teaching from home and another, for example, Zoom. I doubt whether these many isolated solutions are more purposeful in terms of data protection law. At least throughout Bavaria, a uniform approach with clear guidelines and the swift implementation of a solution would be desirable.
In the context of our collaboration with the Bonn Vocational School, we experienced the challenges that the digitization, greatly accelerated by Corona, brings for schools. While there are no immediate financial gaps due to state funding, the increased effort in implementing protective measures means there is a lack of capacity to implement innovative projects.

As an active athlete, how do you see the situation in sports clubs?

As an athlete and former chairman of my cycling club, I naturally see the problems that sports clubs are currently struggling with. The entire club life is severely affected, especially since currently only individual sports are allowed.
Clubs that rely on spectator income or major events, such as the Arber Bike Marathon or the triathlon in Roth with several thousand paying participants, are losing almost entirely the basis for financing. While membership fees continue, they alone often can only partially offset the ongoing costs for sports facilities or employees. Possibly, some sponsors from the business world will reduce or even completely discontinue sponsorship due to Corona. It also remains to be seen how public subsidies will turn out in the near future when public coffers are emptying.

To conclude, do you have a case where dealing with the crisis worked particularly well?

There was a positive example of successful crisis management with school accompaniments, for example for children with disabilities. When schools were closed, the companions were very quickly and pragmatically deployed in other areas, and the providers continued to receive cost reimbursements. For instance, they supported nursing homes or helped in health departments with Corona contact tracing.

Thank you, Florian, for these insights into the industry! We wish all our partners and customers that they get through this challenging time well, and we are always there to support them.