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Coronavirus: Councils offered £500m to help with costs Coronavirus: Councils offered £500m to help with costs
(about 1 hour later)
The government has announced a further £500m to help councils in England facing extra cost pressures as a result of the coronavirus pandemic.The government has announced a further £500m to help councils in England facing extra cost pressures as a result of the coronavirus pandemic.
The money - which can be spent as authorities see fit - comes on top of £3.2bn already received.The money - which can be spent as authorities see fit - comes on top of £3.2bn already received.
Councils have warned of a funding black hole of up to £7.4bn due to increased costs, including social care, coupled with lost income from fees and charges.Councils have warned of a funding black hole of up to £7.4bn due to increased costs, including social care, coupled with lost income from fees and charges.
Some councils will also be reimbursed for 75% of lost income.Some councils will also be reimbursed for 75% of lost income.
This will apply where more than 5% of planned takings from sales, fees and charges have not been collected.This will apply where more than 5% of planned takings from sales, fees and charges have not been collected.
The government will also allow council tax and business rate deficits to be paid over three years instead of the usual one.The government will also allow council tax and business rate deficits to be paid over three years instead of the usual one.
Local Government Secretary Robert Jenrick said: "Councils are playing a huge part in supporting their communities during this pandemic.Local Government Secretary Robert Jenrick said: "Councils are playing a huge part in supporting their communities during this pandemic.
"From supporting the most vulnerable and keeping vital services running to operating local track and trace, council workers have been at the forefront of this great national effort and are the unsung heroes of this pandemic.""From supporting the most vulnerable and keeping vital services running to operating local track and trace, council workers have been at the forefront of this great national effort and are the unsung heroes of this pandemic."
He added: "I know that the loss of revenue from car parks and leisure centres has created huge difficulties, so I am introducing a new scheme to help cover these losses."He added: "I know that the loss of revenue from car parks and leisure centres has created huge difficulties, so I am introducing a new scheme to help cover these losses."
There's been growing pressure on the government to come up with further financial help for councils, with several suggesting they face effective bankruptcy and many warning of cuts to crucial services this year without more cash.There's been growing pressure on the government to come up with further financial help for councils, with several suggesting they face effective bankruptcy and many warning of cuts to crucial services this year without more cash.
While the extra £500m will be welcome, in itself it falls far short of the funding gap predicted.While the extra £500m will be welcome, in itself it falls far short of the funding gap predicted.
For those local authorities which rely on money from fees and charges for things like leisure and car parking, the fact they'll be reimbursed for lost income will be a real help.For those local authorities which rely on money from fees and charges for things like leisure and car parking, the fact they'll be reimbursed for lost income will be a real help.
But for many councils this package won't end the financial uncertainty, particularly for those with responsibility for social care - a sector long under strain, that's long been promised reform.But for many councils this package won't end the financial uncertainty, particularly for those with responsibility for social care - a sector long under strain, that's long been promised reform.
The County Councils Network - representing England's 36 county councils and unitary authorities, which provide all county council-level services, such as libraries and social care, plus those usually run by district councils, including bin collections, recycling and planning applications - welcomed the funding.The County Councils Network - representing England's 36 county councils and unitary authorities, which provide all county council-level services, such as libraries and social care, plus those usually run by district councils, including bin collections, recycling and planning applications - welcomed the funding.
But chairman David Williams said that, "with costs continuing to rise and no guarantees over compensation for lost council tax and business rates", many of its member councils, 32 of which are Conservative-led, still faced "financial uncertainty this year and next".But chairman David Williams said that, "with costs continuing to rise and no guarantees over compensation for lost council tax and business rates", many of its member councils, 32 of which are Conservative-led, still faced "financial uncertainty this year and next".
The Local Government Information Unit think tank said: "There will be a debate about whether this additional funding support is enough. From our perspective, it doesn't look like it." The Special Interest Group of Municipal Authorities, which represents councils in urban areas, said the risk of "serious cuts" had "not gone away".
It said: "This cannot be the last intervention on cost pressures for councils, as the £500m provided will only potentially cover our members till the end of this month, meaning many will still face substantial in-year deficits."
The Local Government Association (LGA), which represents councils, says its members face a funding gap of £7.4bn because of coronavirus.The Local Government Association (LGA), which represents councils, says its members face a funding gap of £7.4bn because of coronavirus.
Labour leader Sir Keir Starmer said on Wednesday that "government inaction" had created a "perfect storm" which could see services suffer.Labour leader Sir Keir Starmer said on Wednesday that "government inaction" had created a "perfect storm" which could see services suffer.
Mr Jenrick is due to address the LGA's annual conference at 14:00 BST on Thursday, via Zoom.Mr Jenrick is due to address the LGA's annual conference at 14:00 BST on Thursday, via Zoom.