New research from the union UNISON highlights how badly local government finances have been hit by increased spending to deal with Covid-19 and a reduction in income because of the pandemic.
Huge increases in spending needed required to fight the pandemic, coupled with a massive hit to council income streams, meant that in December 2020, top-tier councils predicted funding gaps totalling over £1bn by the end of the financial year (March 2021).
UNISON is warning that these funding gaps will increase as the full impact of the COVID-19 pandemic is realised over the coming years and, unless Westminster acts urgently to provide more funding for all councils across the country, the provision of services will be put at risk. It is calling on the Government to provide more funding for all councils across the country to stop the provision of services being put at risk and has launched a Save Our Services campaign calling on the Government to fund all local councils better.
A report from the National Audit Office last month also said “many authorities face significant funding gaps and the financial outlook for the sector is concerning” and that “a combination of high funding gaps and low reserve levels means that some local authorities are at risk of financial failure.”
Tower Hamlets Council has had to make £200m in savings since 2010, with budgets cut by the Government and squeezed by additional demand. The council also has to save a further £30m by 2024 following a decade of Government austerity, changes to council funding, and the Covid-19 crisis.
Leader of Tower Hamlets Labour Group, Mayor John Biggs said: “This new data echoes what local councils across the country have been saying about the cumulative impact of austerity and Covid.
“Council budgets were already in a precarious place before the pandemic, and although we welcome the additional support the Government has provided it sadly does not go far enough, nor does it address the chronic underfunding of local government over the last ten years. This needs to change.”
Cllr Candida Ronald, Tower Hamlets Labour Group’s Lead Member for Resources and the Voluntary Sector, said: “We don’t yet know the extent of the financial impact of the pandemic, particularly as various government support packages come to an end later this year. Local Government faces huge uncertainty, as we wait for decisions from Westminster about reforms to council funding, how this might impact our recovery, and what it means for our local services.”