New funding for councils to help address coronavirus pressures

The government has announced a new support package to help councils respond to coronavirus announced as part of comprehensive plan to ensure councils’ financial sustainability for the future.

Local Government Secretary Robert Jenrick said that councils in England will now receive a further, unringfenced £500 million to respond to spending pressures they are facing. This brings funding given to support local councils with pressures to £4.3 billion since the pandemic started.

In addition to this funding, a new scheme will be introduced that will help to reimburse lost income during the pandemic and boost cash flow. Where losses are more than five per cent of a council’s planned income from sales, fees and charges, the government will cover them for 75p in every pound lost.

This balances the need to provide compensation given the scale of the income losses, encouraging councils to manage and minimise loss where they can and giving them the certainty they need.

The Local Government Secretary also announced today a proposal for a phased repayment of council tax and business rates deficits over three years, rather than requiring complete repayment of deficits next year. This will allow authorities to pay deficits off in a reasonable timescale and will limit their cashflow pressures.

Jenrick said: “Councils are playing a huge part in supporting their communities during this pandemic. From supporting the most vulnerable and keeping vital services running to operating local track and trace, council workers have been at the forefront of this great national effort and are the unsung heroes of this pandemic.

“Today I am providing a further package of support that takes our support for councils during this pandemic to £4.3 billion to help meet the immediate pressures councils are facing. 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.”