Heather Jameson 11 January 2022

Council finances fared better than expected in COVID crisis, says IFS

Council finances fared better than expected in COVID crisis, says IFS image

The cost of COVID for councils has been far less than expected, research from the Institute for Fiscal Studies (IFS) has found.

But while budgets have held up better than expected during the pandemic, local government has been quick to point out this does not mean council finances are in a strong position.

According to the IFS research, conducted on behalf of the Economic and Social Research Council, local authorities have reported that the pandemic increased net spending on non-education services for 2020/21by approximately £7.8bn.

However, official data published last month suggested the increase was just £4.1bn than normal expenditure – far less than expected.

IFS researcher and co-author of the report, Kate Ogden, said the financial position of the sector was ‘not quite as precarious going into this year as is sometimes claimed’.

But she added it was not the case for all councils. ‘Some have been particularly hard hit and faced real financial difficulties.

'And the Government shouldn’t be too sanguine about the longer-run picture for council funding.

‘As our previous work has shown, with rising demands and costs for adults’ and children’s social care in particular, councils will struggle to raise enough themselves via council tax in the coming years, especially in poorer parts of the country,’ she added.

According to the IFS, the discrepancy between the expected added costs and reality is not down to over-exaggerated council forecasts but because councils were asked to estimate increased demand and lower income, but not how much spending would be reduced.

SIGN UP
For your free daily news bulletin
Highways jobs

Transport and Major Work Manager

Slough Borough Council
£54,556 to £60,085 per year Inclusive of Local Weighting Allowance of £1096
Drive the future of transport and infrastructure in Slough Slough, Berkshire
Recuriter: Slough Borough Council

Assessment, Payment and Monitoring Officer x3

Wakefield Council
Grade 6 SCP 12 £28,598 - SCP 18 £31,537
A high level of accuracy and numeracy, with excellent written, oral communication, negotiation & persuasion skills are required Wakefield, West Yorkshire
Recuriter: Wakefield Council

Support Worker

Wakefield Council
G6 SCP 12 £28,598 - SCP 18 £31,537
Are you passionate about making a difference to our citizens and the district that they reside in? Wakefield, West Yorkshire
Recuriter: Wakefield Council

Support Worker

Wakefield Council
Grade 6 SCP 12 £16,617.76 - SCP 18 £18,325.55 (pro rata)
Are you passionate about making a difference to our citizens and the district that they reside in? Wakefield, West Yorkshire
Recuriter: Wakefield Council

PLC Teacher

North Yorkshire Council
£34.434 - £37,280 per annum
Are you passionate about making a difference in the lives of young people with additional needs? Northallerton, North Yorkshire
Recuriter: North Yorkshire Council
Linkedin Banner