Dan Peters 02 July 2020

Jenrick announces more cash, income compensation and tax delay

Jenrick announces more cash, income compensation and tax delay image

Local government secretary Robert Jenrick has announced more cash and new ways councils will be reimbursed for income lost as a result of coronavirus.

The latest package includes an unringfenced £500m and will allow council and business rates tax deficits to be repaid over three years instead of the usual one, which the Government said would ‘build much-needed breathing space into budgets and limit cash flow pressures’.

Where losses are more than 5% of a council’s planned income from sales, fees and charges, the Ministry of Housing, Communities and Local Government (MHCLG) said it would cover 75p for every pound lost.

MHCLG said the 5% figure accounted for an ‘acceptable level of volatility while shielding authorities from the worst losses’ while covering three-quarters of every pound lost would encourage councils to ‘manage and minimise loss where they can’.

Mr Jenrick said: ‘I know that the loss of revenue from car parks and leisure centres has created huge difficulties so I am introducing a new scheme to help cover these losses.

'This Government will continue to stand shoulder to shoulder with councils and communities as we recover from this pandemic as we renew our commitment to unite and level up the country.’

Local government minister Simon Clarke added: ‘This package will ensure councils have access to vital, additional funding so they can continue to serve their communities as they so admirably have done to date.’

However, MHCLG conceded that councils could still be left with unmanageable pressures and may continue to be concerned about their future financial position, urging any authority that found itself in that position to contact the department.

Director of think-tank NLGN, Adam Lent, said the announcement was 'welcome' but still left councils facing £4bn and rising of extra costs.

For more on this story, visit The MJ (£).

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