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

Business Services Senior Co-ordinator

Durham County Council
Grade 7 £31,015 - £34,811
Are you an experienced administrator who enjoys supporting people, leading a team and making sure services run smoothly? A fantastic opportunity has Durham
Recuriter: Durham County Council

School Secretary

Durham County Council
£26,403 - £28,598 pro rata (pay award pending)
Required from 1st November 2026   Kirk Merrington Primary School are looking to appoint a full-time school secretary due to the retirement of the curr Spennymoor
Recuriter: Durham County Council

Fleet Hire Desk Assistant

Durham County Council
£27,274 - £29,542
The Fleet Operations Team in Fleet and Depot Management are looking for a Fleet Hire Desk Assistant to join their team.   To assist the Fleet Services Durham
Recuriter: Durham County Council

Teaching Assistant

Durham County Council
£25,185 - £25,989 pro rata (pay award pending)
This role is permanent, term time only plus 2 weeks, 37 hours per week. We are looking for an experienced and qualified Teaching Assistant, who is hi Durham
Recuriter: Durham County Council

Classroom Teacher

Durham County Council
£32,916 - £45,352 pro rata (pay award pending)
Required
Recuriter: Durham County Council
Linkedin Banner