Coronavirus: English councils face ‘funding gap of £7.4bn’

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English councils face a funding gap of £7.4bn due to the loss of income associated with coronavirus, the Local Government Association says.

It is urging the government to set out how it will support councils.

Speaking at their conference, Labour leader Sir Keir Starmer said the virus and “government inaction” had created a “perfect storm” which could see local services suffer.

The government has said it is working on a “comprehensive plan” for councils.

Whitehall has given £3.2bn funding to all English councils in two grants to help cover coronavirus costs, but the LGA says between March and June councils had already incurred costs of £4.8bn.

Councils have come under increasing financial pressure during the pandemic as demand for their services such as social care grow, while income from local taxation and charges has fallen.

LGA Chairman Cllr James Jamieson said: “Councils have a legal duty to balance their budgets each year. Further funding and flexibilities are now urgent if councils are to have the certainty they need to avoid taking steps, such as in-year cuts to local services, to cope with funding shortfalls.”

Appearing at the organisation’s conference over video link Sir Keir said he was “not even sure the PM has understood the scale of the problem local councils are facing.”

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Sir Keir addressed the conference by video link

He told the virtual audience that if Labour got into power they would “give local government a much bigger say over investment and services, not through plans devised by someone in an office on Whitehall, but ones created and rooted in communities, so that they truly serve the people.”

He said “at the heart of the broken trust in national politics and politicians is a feeling that we aren’t listening”, adding that he wanted to tackle that feeling by giving local communities “a bigger say”.

“Where politics feels distant or remote or like something that is ‘done to’ people rather than ‘with them’ and ‘for them’ – let’s break down those barriers to make sure people have the power to make their voices heard.”

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