Covid-19: Funding for Local Authorities

Alex Sobel Excerpts

Tuesday 24th November 2020 Westminster Hall

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I want to begin by thanking all those on the frontline of the pandemic, working to care for the elderly and vulnerable, collect our refuse, look after our children, and much more. Our frontline local government staff are essential workers in every sense.

We all know that local government funding has been decimated since the coalition Government started a programme of cuts in 2010. Since then, we have been subject to a slash-and-burn austerity programme that has led to councils losing more than half their budget in the past decade. Overall, councils in England can spend £7.8 billion a year less on key services than they did in 2010. That is a cut of £150 million a week. Drastic cuts to local government funding have seen the UK’s most deprived areas shoulder the burden of austerity. Poor areas have faced a threefold impact. They have less money to start with, they have been hit hardest by the demands caused by austerity, and are the least able to meet the shortfall with council tax.

Covid-19 has added fuel to the fire. The financial pressures of meeting the costs of tackling covid include lost income from council tax and other revenues. The total is between £10 billion and £13 billion for councils. I would usually be quick to point out that more is being cut from poor Labour councils than wealthy Tory ones, but after 10 years of cuts and a lack of meaningful funding through the pandemic almost all councils are now at breaking point, including large Conservative-controlled councils.

Naturally, though, I want to talk about Leeds. Our situation is not unique. It represents the situation that many, if not most authorities, are facing, but still the figures create a grim picture. Following significant extra costs relating to covid-19, the council is currently projecting, after the application of Government support, an estimated funding gap of £52.5 million for this year. For the year after, 2021-22, the projected funding gap is £118 million. Leeds City Council may have to make more than £95 million of cuts in the coming months if no extra source of income is found.

Council staff are in the frontline in the battle against this disease. Bus drivers, social workers and public health officials are all vital to the proper functioning of cities—now more than ever. But at Leeds City Council jobs are being hit. The most recent figures put the projected job cuts at around 800 with the current funding gap. The council has done everything asked of it, including lending its chief executive officer to the Government to assist with track and trace and going door to door in areas talking with local communities.

Labour councils in this country have found new ways to help their citizens with the pressures they face. Labour councils make, and continue to make, a huge difference to people’s lives despite a Conservative Government whose policies have left gaping holes in their budgets. I would like to pay particular tribute to Leeds City Council administration, which has done great work in providing frontline services, including to black, Asian and minority ethnic and older people, who have been hit hardest by covid.

The Government must now honour their pledge, do whatever it takes and step up to help with Government underfunding in the future, including in tomorrow’s Chancellor’s statement, to help close fully the funding gap in Leeds of £118 million.