Responding to the funding package announced today to help
councils through the COVID-19 crisis, Cllr James Jamieson,
Chairman of the Local Government Association, said:
“Councils continue to work all day and night to protect the most
vulnerable from COVID-19, support local businesses and try and
keep normal services running. This package offers some positive
measures and recognises the pressures councils are facing, but
more is desperately needed to fully address the severe financial
challenges facing councils and our local services as a result.
“The Government’s commitment to fund a portion of councils lost
income from fees and charges is a step in the right direction.
However, this does not cover the full losses, nor does it extend
to commercial and other income losses and is likely to still
leave councils having to absorb a substantial and unforeseen loss
of funding, in particular the loss of local taxes.
“We reiterate our call to Government to meet all extra cost
pressures and income losses from fees and charges and other
sources, including commercial activity, in full if councils are
to avoid having to make tough decisions on in-year cuts to
services to meet their legal duty to set a balanced budget this
year.
“Allowing councils to spread tax deficits over three years will
help but needs to go together with appropriate measures to manage
any cash flow implications. We are pleased with the commitment to
find a solution to the loss of local taxes in the Spending
Review. In order to have the certainty they need to set budgets
for next year, councils still need urgent clarity on the
irrecoverable losses the Government has positively said it will
pick up. This will need to cover all losses from local taxes.
“The further £500 million extra funding to help councils meet
extra COVID-19 costs pressures is helpful but, in the context of
the funding gap councils still face, substantial additional
funding will be needed and we await further details on how this
money will be distributed.
“Councils have been completing detailed monthly returns to the
Ministry of Housing, Communities and Local Government on the
financial challenges they face. This shows the Government is
committed to fully understanding the impact the pandemic and the
robust evidence provided by councils shows a looming financial
crisis that cannot be ignored. Councils and the LGA want to
continue working with government on the further measures and
funding needed to protect local services.”
NOTES TO EDITORS
New analysis published by the
LGA shows that, between March and June, councils have incurred
£4.8 billion of extra cost pressures and income losses as a
result of the COVID19 pandemic. The estimated financial challenge
councils face as a result of the pandemic will reach £10.9
billion
