- Individual councils in England have funding boosts confirmed
- Direct funding to councils to help with pandemic spending
reaches £4.3 billion
- New scheme will help to cover councils’ lost income during
the pandemic and boost cash flow
Local Government Secretary has today (16 July 2020) confirmed allocations for
individual councils from the £500 million of additional support
for coronavirus-related spending pressures.
The funding will help councils in England continue to deliver
crucial frontline services, support those most in need and meet
new spending pressures so they can deliver for residents.
The extra £500 million – which brings support for pressures they
are facing to £4.3 billion - will be distributed to councils
based on population and levels of deprivation, and how the costs
of delivery of services varies across the country.
The funding is part of a comprehensive package of government
support to help councils respond to the pandemic, including an
unprecedented new scheme to help councils recover lost income,
including from car parks and museums, which have been shut during
the lockdown.
Over the last few months, the government has worked closely with
councils to understand their needs and provided more than £27
billion to help them, businesses in their area and their
communities through the pandemic.
Local Government Secretary Rt Hon MP said:
Councils are playing a vital role in our national fight against
coronavirus, providing a lifeline for so many and supporting
communities at a time when they need it most.
That’s why we are giving them an extra £500 million – taking
our total additional funding provided to £4.3 billion – and
today I am setting out how this will be allocated to councils
fairly based on the pressures they have told us they are
facing.
This comes on top of the co-payment scheme announced last week
that will compensate councils for irrecoverable income losses
from sales, fees and charges.
Minister for Regional Growth and Local Government said:
We’ve set out a comprehensive package of support for councils,
including an unprecedented scheme to reimburse them for loss of
income during the pandemic.
This additional £500 million funding will be allocated to
councils to support them to meet the spending pressures they
are facing in their local area.
The funding has been distributed between district and county
councils to reflect the pressures they have reported.
Of the £4.3 billion we are providing to councils, £3.7 billion is
un-ringfenced so councils also have the flexibility to choose how
to use it in their areas and £600 million was to support social
care providers.
In addition, the government has announced a co-payment scheme
that will compensate councils for irrecoverable income losses
from sales, fees and charges. They will be expected to absorb the
initial 5% of losses compared to planned income from these
sources. Thereafter, there will be a cost splitting arrangement
where 75p in every pound of relevant losses will be compensated
for by the government.
And to enable them to get on the front foot and build much-needed
breathing space into their budgets, the government is also
allowing them to spread their tax deficits over 3 years rather
than the usual 1 year. This will allow authorities to pay
deficits off in a reasonable timescale and will limit their
cashflow pressures.
Further information
- The allocations of this £500 million have been published on
the emergency funding for
local government page
- In recognition of the acute cost pressures that a small
number of local authorities are facing with regard to
Unaccompanied Asylum Seeking Children, the Department for
Education will use £6 million of the £500 million to provide
targeted support to a small number of councils.
- We are providing councils with an unprecedented package of
support, including £4.3 billion of support for pressures,
including £3.7 billion of grants for expenditure which are not
ringfenced and a £600 million Infection Control Fund.
- In total, our comprehensive support includes:
- £3.7 billion of new funding to councils which is not
ringfenced
- £600 million to support adult social care providers
through a new infection control fund
- Over £20 billion in support for businesses
- £500 million in council tax hardship funds to offer
economic support to the most vulnerable
- £300 million to support test and trace
- Each funding allocation has been informed by the latest
assessment of pressures reported by councils and submitted to
government
- On 19 March we announced an initial £1.6 billion for local
councils. These funding allocations were based on a mixture of
Adult Social Care Relative Needs Formulas and Settlement Funding
Assessment.
- On 18 April we announced a further £1.6 billion funding for
local councils. These funding allocations are based on a per
capita basis, and there was a 65:35 split between county and
districts. Where there are separate fire authorities a specific
tier split for fire of 3% will be used.
