Concern that government Covid cash could leave some Lancashire councils short

The leader of Lancashire County Council says that he is “disappointed” with the authority’s share of the latest slice of government cash handed out to help councils deal with the costs of the coronavirus crisis.

Sunday, 3rd May 2020, 10:54 pm

County Hall has been given £21.4m in a second wave of emergency funding for local authorities – but that is £14m less than the amount it received in the first round late last month.

The initial allocation focused on the needs of so-called ‘top-tier’ councils, like Lancashire County Council, which provide adult social care services – an area recognised as having been put under huge financial strain as a result of the pandemic.

While those authorities will still receive the lion’s share of the latest £1.6bn pot of cash, the government has acknowledged that district authorities are also heading for hardship, because of a sudden loss of income from the likes of car parking charges and leisure centres since the lockdown began.

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The latest round of coronavirus funding has had a mixed reception from Lancashire's councils

In total, the county council has been allocated £56m since the start of the crisis – but the authority has estimated in an official assessment for central government that it will face a final coronavirus bill in the region of £120m.

County council leader Geoff Driver said that he had “no argument” against district councils being given more money to meet their needs.

But he added: “To reduce our share by almost 40 percent leaves us woefully short of covering our additional costs.

“County councils of a similar size to Lancashire have faced much lower reductions in their share and we shall be seeking clarification on the reasons for that.

“The inescapable fact, however, is that local government as a whole needs a much bigger injection of funds from government to cover the financial burden caused by Covid-19, which includes lost income and planned savings not being achieved as well as the huge increases in expenditure,” County Cllr Driver said.

County Hall's reserves - predicted in recent years to have run out by now as a result of being used to cover gaps in the annual budget - are now far healthier and are forecast to stand at £100m by 2023/24.

Announcing the extra cash for councils ten days ago, before the individual allocations were revealed, communities secretary Robert Jenrick said that he was “backing” district authorities.

He added that the funding was being shared out in “the fairest way possible, recognising the latest and best assessment of the pressures [councils] face”.

The split in second round funding in two-tier areas like Lancashire has been set at 65 percent for county authorities to 35 percent for cities and districts.

That has resulted in huge increases for districts in Central Lancashire compared to the amounts they received in the first wave, which were largely in the tens of thousands, but in most cases have now exceeded £1m.

The government has also said that it will fully reimburse these authorities for the business rates holidays granted as part of its coronavirus rescue package.

However, there are warnings from some second-tier councils that the newly-announced cash still may not be enough.

Mr. Jenrick has previously pledged to give councils “the resources they need” to deal with the cost of coronavirus – but some local government leaders are now agitating for a cast-iron commitment to cover every penny. A total of £3.2bn in government cash has so far been allocated to local authorities.

Preston City Council chief executive Adrian Phillips said the £1.4m the authority received this week – making £1.5m in total – was welcome and will “assist with meeting the costs of our community hub, supporting the most vulnerable residents across Preston”.

He continued: “It will be added to the funding already received for the extensive work carried out by our teams and partner agencies to house the city’s homeless people.

“However, for local government as a whole, it’s unlikely that this funding will cover all additional costs during Covid-19.

“The whole of the city council’s resources are focussed on supporting our residents and businesses. We are working really hard to maintain all our priority services to residents, whilst putting due resources on our specific Covid-19 emergency response duties,” Mr. Phillips added.

Meanwhile, Wyre Council has said that it’s total grant of £1.1m falls far short of the amount which the authority expects to lose.

“The second tranche of emergency funding is welcomed as an important step towards meeting the financial impact of the pandemic and consequent lockdown on the council’s finances,” said Wyre’s deputy leader Alan Vincent

However, we estimate that our income in a full year could reduce by as much as £5.5m and our increased costs are forecast to exceed £1m – and so the conversation with central government must continue on how we work together to deal with the challenges faced by local government, whilst at the same time recognising the huge challenges faced by national government, too.”

Chorley Council leader Alistair Bradley has seen his authority’s allocation leap from £51,000 to £1.1m, which he welcomed – but contrasted Lancashire’s fortunes with those of other parts of the country.

“We’re doing all we can, working flat out to provide for our community and businesses – providing services and support measures above and beyond what we would normally deliver.

“While the work is vital, it does bring with it financial pressures due to lost income as well as the additional expenditure supporting residents and businesses and we will need to continually review our budgets to make sure we can continue to deliver these essential services.

“We urge the government to keep in regular dialogue with local councils and to continue to review their funding in line with the financial pressures we are facing. I do not believe that this current funding will cover the full financial impact of Covid-19 and it is disappointing that Lancashire has received less funding than other councils elsewhere across the country.

“Local councils really are leading the way for community support during the Covid-19 crisis and all tiers of council need sufficient funding to ensure that we can effectively contribute to the national effort.

“We are incurring significant ongoing costs on behalf of our residents and businesses and we will not be going back to normal any time soon. The longer the situation continues, the more financial impact it will have.

“We understand that the government has previously pledged to provide adequate funding to deal with Covid-19 impacts. I hope they stand by this undertaking.

“What we have achieved so far to support our most vulnerable with the support of partners, local businesses and community groups is remarkable.

“I’ve never been prouder to lead Chorley Council and it’s fantastic to see our communities come together,” Cllr Bradley added.

In neighbouring South Ribble, council leader Paul Foster also now has an extra £1.1m in total to help ease the financial burden of coronavirus – but he, too, is looking to the long term.

“I am immensely proud of how this council has responded to the Covid-19 crisis. It has been far from easy but I think residents acknowledge that South Ribble Borough Council is going above and beyond to support the people of this borough when they need us most.

“I’m completely overwhelmed by how our community, businesses, partners and staff have come together to help those who need it the most. I want to take this opportunity to thank everyone who has supported the effort so far.”

“All our fantastic efforts have, however, put considerable pressure on our finances due to lost income as well as the additional expenditure supporting residents and businesses – so the government’s announcement of additional funding of £1m is welcome news.

“However, there is still a great deal of work to be done to ensure our communities and business continue to be supported throughout these difficult times and beyond and it’s disappointing that Lancashire councils have received less funding than other councils elsewhere across the country.

“The ongoing work and support provided by local councils is vital the national effort to tackle the covid-19 crisis and the financial impact will only increase as the situation continues.

“For that reason, I would urge the government to talk to us regularly and work with us to keep an eye on the financial pressures we are under and ensure that we are funded accordingly,” the Labour leader said.

South Ribble’s Conservative opposition also issued a statement. Group leader Margaret Smith said: “We are delighted to learn that South Ribble have received from our Conservative colleagues in government just over £1.1milion to help us with the loss of income from rent and rates and sundry expenses This is extremely good news for the council which will help enormously to balance the books.”

Ribble Valley will receive the lowest overall total of any of Lancashire’s 12 districts – £626,000. But leader Stephen Atkinson was pleased with the latest allocation.

“The announcement that we are to receive £602,000 to help us deal with the immediate impact of the coronavirus pandemic is welcome.

“This support will go some way in meeting the additional expenditure we are incurring in responding to the pandemic and a projected shortfall of £850,000 in lost fees and income, depending on the length of the lockdown.

“From collecting refuse to processing business support grants and spearheading community hubs that are helping vulnerable households with essential everyday needs, the Government clearly recognises that councils are making a significant difference to people’s lives during the pandemic,” Cllr Atkinson said.

Fylde Council was also approached for comment.