Covid-19: Funding for Local Authorities

Wera Hobhouse Excerpts

Tuesday 24th November 2020 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

At the start of the pandemic, the message from Government to local authorities was clear: “Do whatever it takes to deal with the coronavirus, and we will cover your losses.” Councils across the country have been at the forefront of the coronavirus response. They are facing growing costs and increasing demands, and they have seen significant drops in income. At the time when local services are needed more than ever, our councils are being left to pick up the pieces.

I want to express my gratitude for the support that Bath and North East Somerset Council has provided to services such as the Community Wellbeing Hub and food clubs and pantries. However, despite the initial promises, council funding from central Government has been drip-fed and inconsistent. That creates a high degree of uncertainty about the long-term financial impact on council finances, and it means uncertainty for the core services for our communities.

Bath and North East Somerset Council is one of the hardest-hit by the pandemic. Over the past 10 years, it has done exactly what the Conservative Government asked of local authorities and created its own income stream, but its main funding stream—heritage and parking services—has effectively dried up. In normal times, the Roman bath and other heritage services would generate millions of pounds. At the height of the lockdown, however, the council was losing £91,000 a day from heritage and parking services. The council estimates that it will need to find £29 million of savings over the next five years.

Prior to covid, councils were already facing a big funding gap. According to MHCLG’s financial information service, the financial challenge facing councils in 2020-21 is now £11 billion. The delay in the comprehensive spending review has only created more uncertainty as councils try to set their budgets for next year. When will the Government make good on their promise to cover councils’ financial losses? For example, up and down the country councils such as BANES have outsourced their leisure services to companies such as GLL, a not-for-profit charitable social enterprise, which is already closing leisure centres and will close more unless the Government step in. We all know how important sports and activities are for people, especially for their mental health and wellbeing during the corona crisis.

Local businesses that are renting premises from the council in Bath are also suffering. The council cannot afford to give them more rent relief because it needs every penny to cover the cost of essential services such as street cleaning. Local councils have kept their promises to local people. When will the Government deliver on their promises to councils?