Covid-19: Local Government Finance

Lord Young of Cookham Excerpts

Tuesday 7th July 2020 Lords Chamber

[Lord Greenhalgh]

My advice to the Secretary of State would be to focus on the three pillars of support that we need to give councils. We are covering demand pressures through the Covid-19 pandemic and we have announced an income support package. Councils are also facing irrecoverable tax losses, and the principle of sharing that between national and local government has been agreed, but not the precise proportions. I would therefore encourage my right honourable friend the Secretary of State to agree that with the Treasury as part of the spending review.

[Lord Young of Cookham (Con) [V]]

My Lords, further to the Question asked by the noble Lord, Lord Kennedy, on financial stability, local authorities borrow substantial sums of money from the market. While some local authorities have recently had their credit rating reduced, most have so far maintained high ratings, enabling them to borrow cheaply. Will my noble friend do all he can to take the necessary steps to ensure that this remains the case to avoid further pressures on local authority budgets?

[Lord Greenhalgh]

My noble friend is right to say that the credit ratings of local authorities remain strong, and where there have been some downgrades, that happened before the pandemic. I have made an undertaking to see that local authorities continue to get access to funding. However, we should recognise that the main lender to them is the Public Works Loan Board, which is an agency of HM Treasury.