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

Senior Practitioner - Children in Care - North Essex

Essex County Council
£48205.0000 - £57988.0000 per annum
Senior Practitioner - Children in Care - North EssexPermanent, Full Time£48,205 to £57,988 Per AnnumLocation
Recuriter: Essex County Council

Coroners Coordinator

Essex County Council
£25959.0000 - £26632.0000 per annum
Coroners CoordinatorPermanent, Full Time£25,959 to £26,632 per annum Location
Recuriter: Essex County Council

Adults Social Worker - Discharge to Assess

Essex County Council
£38487 - £51834 per annum
Interviews will be held in person at Rowan House, Colchester in late July 2026.This advert is open to Experienced Qualified Social Worker's About Our England, Essex, Colchester
Recuriter: Essex County Council

Senior Organisational Development Adviser

London Borough of Richmond upon Thames and London Borough of Wandsworth
43545 - 55992
Job Title
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

School Crossing Patroller

London Borough of Richmond upon Thames and London Borough of Wandsworth
Pro Rata Salary - £5353,77
Job Title
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth
Linkedin Banner