LGA responds to COVID-19 council funding package

“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."


A pound coin on a table

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 of 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.”