English councils fear 20 per cent budget cuts

The Labour Party has warned that councils in England may have to make budget cuts of 20 per cent due to the coronavirus pandemic, as well as face a £3.5 billion social care funding shortfall.

Analysis by the party found that local authorities are facing a £10 billion black hole as they encounter spiralling costs while revenue streams such as parking charges dry up amid the lockdown. Therefore, cuts of up to 21 per cent could be needed to balance the books.

Although the government has announced a further £600 million for social care, on top of £3.2 billion given to councils in the last two months, Labour warns that local authorities could see a shortfall of up to £3.5 billion across the local government social care sector, with 225,000 adult social care places put at risk within this financial year.

Of the 225,000 adult social care places at risk, 178 would be long-term care places

Nick Forbes, leader of the LGA Labour group and leader of Newcastle city council, said: “The funding gap that councils now face is terrifying. Social care is largely funded by councils up and down the country, and makes up a huge proportion of our spending. We have a legal duty to balance budgets, so unless the funding gap is closed then cuts are inevitable.

“Councils have been trying to care for more people with less money every year for a decade, but unless the government acts there is only so much councils will be able to do to protect those most in need.”

The analysis comes as councillors claim they were told to expect to share the financial burden of fighting the virus by Jenrick, who also said local authorities should not 'labour under the false impression' that all of their costs will be reimbursed. There is also concern that councils have been asked to give estimates to the government on what is needed based on a lockdown period lasting three months only. Labour has said it is obvious that some elements of restriction are due to continue for longer.