Staffordshire County Council has underspent on its budget by almost £2m – despite facing more than £35m extra costs caused by the Covid-19 pandemic.

The authority spent more than £500,000 on creating temporary mortuary space at the Staffordshire County Showground, as well as handing out more than four million pieces of personal protective equipment (PPE) to health and care providers and businesses during the 2020/21 financial year.

In June 2020 Staffordshire County Council was facing a £10m overspend on its annual budget, mostly caused by responding to the pandemic.

But a year on it has been reported to cabinet members that the authority managed to end 2020/21 with a £1.9m saving.

A report to Wednesday's cabinet meeting said that the Government had provided funds and grants worth more than £110m to help the council deal with the effects of the pandemic. Financial challenges included £35.4m additional costs, as well as £2.68m in lost income.

Councillor Ian Parry, the authority's recently-appointed cabinet member for finance and resources, said: "I think there's a tremendous success story in this report. It covers our darkest hours of the pandemic.

"This is no ordinary year-end and it has been no ordinary year. The pandemic presented massive challenges to the population, businesses, economy and health of Staffordshire in all sorts of ways.

"It presented enormously complex challenges to this council, in order for this council to respond, help to protect and support the residents of this county.

"That required a herculean response from the county council in so many ways: in re-purposing roles so that people could move into positions that were required and necessary during the pandemic; to provide new infrastructure around testing and eventually around vaccinations; to provide in those early dark hours food distribution and necessary support through community groups we had to link up with. Not only that, the impact on the council's finances in other ways, in terms of lost income and taxation.

"Fortunately, central Government also acted swiftly in providing £110m worth of funding for the county council to respond to some of these needs and to help out where it was necessary. But that in itself provided an extra layer of complexity to the financing and distribution of that help.

"This could have really rocked the county council. It could have affected the capacity and capability of the county council for years to come.

"A crisis is often an excuse for controls being taken off and 'needs must' attitudes prevailing. Needs must did prevail, but at the same time good, sensible management and controls were maintained.

"At the end of what we hope is going to be the end of those dark days, we will have landed in a reasonable position and the council's finances are not left as they might have been."

Council leader Alan White said: "It doesn't matter how long you've been a councillor for, you will have never encountered a year like the one we've had and you will never have had to face – as individuals or politicians – the challenges that you have faced during that year.

"We were able to deliver consistent services across the county for the duration of the pandemic. It involved feeding people, preparing mortuary space, supporting communities and even the delivery of personal protective equipment because there wasn't enough around.

"Everything was up in the air, and yet we've managed to deliver an out turn this financial year which was a tribute to the efforts of our officers, our communities and our partners including the NHS. I would like to say a very sincere thank you for all that work – it has been extraordinary."