England & Wales Covid-19, Finance

Covid-19: Bankrupting local government will not help the country recover

Source: Marco Verch via Flickr CC 2.0 https://www.flickr.com/photos/30478819@N08/47896496511

There are worrying reports that Robert Jenrick has told a group of council leaders that local government would have to “share the burden” of coronavirus-related costs.

We can only hope that this was a slip of the ministerial tongue.  On March 16th the Secretary of State had told council leaders, “This Government stands with local councils at this difficult time. Everyone needs to play their part to help the most vulnerable in society and support their local economy, and the Government will do whatever is necessary to support these efforts.”

Of course, councils are used to being let down by government and paying the price for their own efficiency with further cuts.

But we should be very clear. Councils are already caught in a perfect storm.  They have to manage both the costs of coping with Covid-19 and supporting vulnerable people in the community and the increased cost and difficulty of providing ‘normal’ services in the midst of this – services including social care which protects capacity in the NHS.

They will have ongoing costs supporting a transition to ‘normal’ life. At the same time, they face a loss of income from charges and council tax.

And, on top of all of this, there are underlying financial pressures which have already taken councils to the brink of financial failure; including the rising costs of care and children’s services. All of these get worse by the month and we are further than ever from a plan for sustainable local government finance with councils now propped up by short term annual financial settlements.

So, if the Government does renege on its promise to support councils, they will fail in large numbers.

That will plunge millions of people around the country into further crisis and impede our national recovery from Covid-19. It’s at the local level and through local government’s capacity to rebuild local economies and mobilise that national renewal will be driven most powerfully.

Ministers have become accustomed to thinking of local government as a bottomless pit into which they can shovel financial and political risk.

That’s just not tenable any more.

All LGIU Covid-19 resources are being provided free of charge, including our Global-Local news bulletin highlighting how local governments around the world are responding to the pandemic. 

One thought on “Covid-19: Bankrupting local government will not help the country recover

  1. I agree. It could be particularly difficult for those local authorities that sought to mitigate the loss of Government grant by generating revenue from commercial property, which could see that revenue drop in a recession, and that have committed to regeneration schemes for their high streets, which may no longer be viable as the demand for retail and commercial space is adversely affected post-Covid-19.

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