Leader's column: How the coronavirus has hit local councils hard

Tameside Council's Executive Leader, Cllr Brenda Warrington, explains her view of how the coronavirus pandemic has severely impacted local government finance.

Two weeks ago I wrote about Universal Credit, and how it was an example of the coronavirus pandemic shining a harsh spotlight on economic and social issues which have already existed for a number of years. 

Today I want to return to that subject with the consequences the pandemic has had for local government finance.

It’s no secret that local government has suffered the brunt of ten years of austerity. Over the past six years we have had to save £160million to set balanced budgets and continue delivering vital services to our residents. This has involved redesigning many of those services, and making the most of what income raising powers we do have.

The coronavirus pandemic has thrown this delicate balancing act into a tailspin. Councils are now facing shortfalls that could run up to £10billion. In Tameside’s case, we expect our cost pressures to be approximately £25million higher this financial year. The government has offered £3.2billion of extra funding to councils, but our share will only cover around 40 per cent of what is needed.

Worse still, it seems that the government has not grasped the scale of the impending financial disaster. At the beginning of the pandemic we were promised that they would ‘do whatever is necessary’. Now we’ve been told to ‘not labour under a false impression’ that all costs will be covered.

We cannot become complacent now. The government must recommit to providing whatever funds are necessary to help us overcome this emergency. I appreciate £10billion sounds like a lot, but it’s less than many of the other important measures that the government has approved, such as the writing off of £13.4billion of NHS debt, or the £39billion that the furlough scheme is estimated to cost.

In the long run, £10billion is a far lower cost compared to the alternatives. In the best case we will have to find more cuts in vital services that have already been sliced to the bone. The worst case scenario will see councils go right to the edge or, in many cases, straight over the edge of bankruptcy.

I have already written to the Prime Minister expressing these concerns. The recovery of our communities and our country will depend on the decisions made over the next few weeks. We have come too far now to not do whatever else must be done.

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