Covid-19 Council Funding Crisis: LGA Statement On Minister Comments

Responding to the announcement in the Commons by Local Government Minister Simon Clarke that the that the Government was working on a “comprehensive plan to ensure financial sustainability of councils this financial year”, Cllr James Jamieson, Chairman of the Local Government Association, said:

“We are pleased that the Government has indicated it is working on a comprehensive plan to address the ongoing financial challenges councils face this financial year as they lead communities through the COVID-19 crisis. We urge the Government to bring forward details of this plan as soon as possible.

“Councils have a legal duty to balance their budgets each year and are heavily reliant on income from local taxation, commercial activity and fees and charges. Confirmation of future funding – including compensation for all lost income as a result of the pandemic alongside extra cost and demand pressures – is vital if councils are to avoid taking measures, such as in-year cuts to local services, to cope with funding shortfalls.

“Emergency government funding provided to councils has helped in recent months. Further funding and financial flexibilities are now needed to help councils meet a shortfall which we estimate could reach at least a further £6 billion this year.

“The Government has shown a commitment to fully understand the financial pressures facing local services and councils are providing robust evidence each month on the scale of the challenge they face. Not only do councils need to be fully funded to continue supporting communities through this immediate crisis but also to support the nation as we tackle the unprecedented social and economic task ahead and move into the next phase.”