Laura Sharman 18 May 2020

Councils call for £5bn 'income guarantee'

Councils call for £5bn income guarantee image

England's largest councils are calling on the Government to provide a £5bn 'income guarantee to avoid them having to declare insolvency during the coronavirus pandemic.

The County Councils Network (CCN) is warning that some councils may be forced to issue section 114 notices due to lost income and growing costs pressures.

The councils represented by CCN estimate they will lose £430m from fees, charges and other income, with non-payment of council tax and business rates reaching £2.4bn.

It is calling on the Government to compensate councils for their lost income in addition to providing emergency funding for additional costs.

Cllr David Williams, chairman of the CCN, said: 'The government has given comprehensive protection to the health service and businesses and we want to work with government to deliver the same for councils. However welcome one-off injections of resources have been, councils cannot budget on verbal reassurances alone and therefore now is the time for the government to step forward with firmer financial guarantees to stem fears that councils will have to declare insolvency.

'By setting out an initial guarantee of £5bn, this will provide councils with the confidence and means that they need to spend what is required to defeat the spread of the virus, save lives and support private enterprise to drive the economic recovery.'

The Government could protect councils from financial collapse by underwriting the potential loss of council tax and business rates, finance chiefs have claimed.

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