Michael Burton 18 August 2020

Councils facing £2bn budget black hole

Councils face a budget black hole of £2bn this year due to unfunded coronavirus costs, a new study has found.

The report from the Institute for Fiscal Studies (IFS) said that while loss of income and council tax coupled with extra spending came to £7.2bn, the Government has so far promised only £5.2bn or 4% of councils’ pre-crisis spending.

Although many councils have reserves, drawing on them to plug the coronavirus deficit would leave them exposed.

The IFS instead proposed targeted extra government grant funding for the councils most in need and a relaxation of borrowing rules.

Local government policy manager at the Chartered Institute of Public Finance and Accountancy (CIPFA), Joanne Pitt, said the IFS’ relaxation suggestion would ‘directly contradict’ the existing prudential code, under which local authorities are only allowed to borrow for long-term capital investment.

She added: ‘'While short-term solutions may be attractive, CIPFA believes that this is the time to strengthen good financial management, not weaken it.’

A government spokeswoman said: ‘We’re giving councils unprecedented support during the pandemic to tackle the pressures they have told us they’re facing. This includes £4.3bn funding, compensation for irrecoverable income losses and a scheme allowing them to spread their tax deficits.’

Photo: Loveandrock / Shutterstock.com

SIGN UP
For your free daily news bulletin
Highways jobs

Activites Assistants (CASUAL)

Durham County Council
£24,404 (12.65 p.a. hour) - £25,183 (£13.05 p.a. hour)
This is an exciting opportunity for Casual Activities Assistants to join our Leisure and Sport Service.   Leisure Centres are
Recuriter: Durham County Council

Pension Administration Officer

Durham County Council
£24,404 to £25,183 p.a. (Grade 3) Pay award pending
A vacancy has arisen within Pension Services for an Administration Officer to provide admin and data support to the pensions team and members of the L Durham
Recuriter: Durham County Council

County Attendance Officer

Oxfordshire County Council
£37035 - £39513
We are seeking to recruit to the role of County Attendance Officer on a permanent basis to work predominately across the North or the South of the county. The team works across the whole of Oxfordshire so flexibility to work in other areas is also require County Hall, Oxford
Recuriter: Oxfordshire County Council

Software Engineer Starter

West Northamptonshire Council
£26914
We're looking for an exceptional human to join our digital team to learn the skills and put them into practice, designing, developing and maintaining websites, mobile apps & AI. You'll join us on our journey as we create better end-to-end services for our Northampton
Recuriter: West Northamptonshire Council

Executive Director - Growth, Enterprise and Environment

Redcar & Cleveland Borough Council
£139,111.00 (pay award pending)
This is a chance to make a significant difference to the lives of families across our borough – and to seriously improve your quality of life. Redcar and Cleveland House, Kirkleatham Street, Redcar, TS10 1RT
Recuriter: Redcar & Cleveland Borough Council
Linkedin Banner