Dan Peters 27 April 2020

Councils need another £12.8bn to cope with coronavirus - LGA

Councils may need up to another £12.8bn from the Government to get through the coronavirus crisis, the chairman of the Local Government Association (LGA) has suggested.

Giving evidence to the Housing, Communities and Local Government Committee today, Cllr James Jamieson said the £3.2bn given by Whitehall so far had given councils ‘breathing space’.

However, he added that, based on preliminary analysis of information provided by councils, the sector could need ‘three or four times’ the amount given so far.

The comments came as the Ministry of Housing, Communities and Local Government (MHCLG) refused to offer the sector a ‘cast-iron public commitment’ that it will fully meet extra costs to councils and compensate for lost income in order to avoid the issuing of Section 114s.

Early announcements by ministers had told councils to spend whatever it takes and suggested that they would be compensated for additional costs.

Ministers made it clear that they do not want local government to fail due to reduced cash flow or short-term budget pressures caused by COVID-19, but have not yet published plans for how they will fully support budgets for the current financial year.

And a shift in tone in a recent meeting with local government secretary Robert Jenrick rocked the sector’s confidence.

The LGA has demanded a ‘rock-solid’ written commitment for the Government to cover all extra costs incurred by councils but asked by The MJ to give one, an MHCLG spokesman said: ‘We have nothing to add at this stage.’ 

In a letter seen by The MJ to chancellor Rishi Sunak, District Councils’ Network chairman, Cllr John Fuller, wrote: ‘Further support will be critical to support services and to avoid s114s being issued by district councils in the weeks and months ahead.’

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