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

Executive Director, Place and Customer

Essex County Council
up to £179,404 per annum
Shape the Future of Essex. Drive climate action. Deliver for our communities.Essex is on the government's Priority Programme for Local Government Ref England, Essex, Chelmsford
Recuriter: Essex County Council

Waste Services Operative

Hyndburn Borough Council
£26,403 to £28,142 per annum
The successful candidate will be joining the Council’s extremely successful Waste Services team Accrington, Lancashire
Recuriter: Hyndburn Borough Council

Waste Service Team Leader/Driver Cat C

Hyndburn Borough Council
£31,537 - £33,699 per annum
Above all, you must take pride in your work and be willing to make a difference to the overall cleanliness of the Borough. North East Lincolnshire
Recuriter: Hyndburn Borough Council

Educational Psychologist

North East Lincolnshire Council
Soulbury Scale A 4-9, plus up to 3 SPA points.
Join a team that feels like home, come and be part of the positive. North East Lincolnshire
Recuriter: North East Lincolnshire Council

Social Worker - Children's Assessment and Safeguarding

North East Lincolnshire Council
ASYE level £36,363 up to £46,142
Communities that matter and places that belong North East Lincolnshire
Recuriter: North East Lincolnshire Council
Linkedin Banner