Coronavirus: English councils could resort to 'extreme cost-cutting'

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Local councils in England are “extremely concerned” they will not get more funding to tackle coronavirus.

The Local Government Association’s Richard Watts has written to Local Government Secretary Robert Jenrick warning of “extreme cost-cutting”.

In his letter, obtained by the BBC, Mr Watts appeals for a guarantee the government is “still willing to do whatever it takes” to help them.

An extra £1.6bn has been given to local authorities since the outbreak began.

A spokesman from the Ministry for Housing, Communities and Local Government said Mr Jenrick had “been clear that [they] will support councils to provide services to their communities during the pandemic”.

Councils face increased costs from supporting vulnerable people, while their income from fees and rates is falling.

Mr Watts – the LGA’s resource chairman – began his letter by thanking the minister for his “hard work on behalf of local government”, and said measures, including the £1.6bn funding and deferral of business rates payments, were “helpful in providing some stability and certainty”.

But he said the cash was an “insufficient sum” and members of the LGA had heard from the department that “further funding may not be forthcoming despite previous promises”.

He wrote: “This is having a real impact on councils’ confidence that they will be given the financial means to see this challenge through and could cause some to take extreme cost-cutting and rationing measures.”

Mr Watts said he had seen evidence some social care authorities had already committed up to three times more spending than the grant allocation allows because they expected extra funding, and the cash put forward already was “vanishingly small” compared to what they are needing to spend on increased homelessness.

He also claimed finance directors from the councils have been holding off issuing reports that show they are “spending beyond [their] means” because of promises of extra funding.

Mr Watts said there were pressures that would go beyond the coronavirus outbreak too, such as an increased demand in social care and council tax support.

He said the “income base is collapsing” for councils, with leisure centres shut, public transport cut and parking fees not coming in, as well as lower business rates being collected.

“This loss of income represents a real reduction in the resources available to councils to fund services and will mean that, in the absence of any compensation, the balanced budgets set by councils will not be deliverable,” wrote Mr Watts.

He said the “point of focus” for the government should be ensuring local authorities have “confidence that the government will support them”.

Mr Watts concluded his letter, saying: “We would like urge you and the Chancellor of the Exchequer to set out in a clear joint letter of intent that the government is still willing to do whatever it takes and provide further funding to councils up front.”

And he called for a “commitment to compensate [councils] fully for costs, net loss of income and savings that cannot be delivered as result of this crisis, so that they can continue to focus on delivering the response to the greatest challenge the UK and the world have seen in decades, as opposed to worrying about whether they need to start rationing because no further support might be forthcoming”.

The government has previously said it would keep funding for local councils under review.