On Thursday, July 2, the Local Government Secretary revealed that another pot of £500million would be handed out to local authorities, alongside a scheme to cover a proportion of councils’ lost income.
Coun Peter Jackson said: “This announcement of further support for local government is most welcome, and something that we have continued to have a dialogue with Government about.
“There is no doubt this crisis is challenging for all local authorities, but we remain positive that with support like this, we can continue to play our critical role in keeping front-line services running, protecting the most vulnerable in our communities and supporting businesses.
“We also welcome the acknowledgement of the loss of income streams, an area where Covid-19 has placed considerable financial pressure on councils.
“We will continue to make the case for support for Northumberland, so that the county can come out of this crisis strong.”
Prior to this, Northumberland County Council has received £19.1million from two previous rounds of funding, although it was estimating a 2020-21 budget shortfall of £12million on top of this money.
The additional tranche of £500million will not be ring-fenced ‘as it is recognised that councils are best placed to decide how to meet pressures in their local area’, although the amount each authority will receive has not been released yet.
In addition, the Government also announced a scheme to reimburse some of councils’ lost income during the pandemic. Where losses are more than 5% of planned income from sales, fees and charges, the Government will cover them for 75p in every pound lost.
Other changes will mean authorities can spread their tax deficits over three years rather than the usual one.
Local Government Secretary Robert Jenrick MP said: “I am providing a further package of support that takes our support for councils during this pandemic to £4.3billion to help meet the immediate pressures councils are facing.
“I know that the loss of revenue from car parks and leisure centres has created huge difficulties, so I am introducing a new scheme to help cover these losses.
“This Government will continue to stand shoulder to shoulder with councils and communities as we recover from this pandemic as we renew our commitment to unite and level up the country.”
Coun James Jamieson, chairman of the Local Government Association, said: “The Government’s commitment to fund a portion of councils lost income from fees and charges is a step in the right direction.
“However, this does not cover the full losses, nor does it extend to commercial and other income losses and is likely to still leave councils having to absorb a substantial and unforeseen loss of funding, in particular the loss of local taxes.
“We reiterate our call to the Government to meet all extra cost pressures and income losses from fees and charges and other sources, including commercial activity, in full if councils are to avoid having to make tough decisions on in-year cuts to services to meet their legal duty to set a balanced budget this year.”
He added: “The further £500million extra funding to help councils meet extra COVID-19 costs pressures is helpful, but, in the context of the funding gap councils still face, substantial additional funding will be needed and we await further details on how this money will be distributed.”