New funding package for councils to help address coronavirus pressures and cover lost income during the pandemic

Covid-19 News | Economy & Politics | National
UK Parliament

A major new support package to help councils respond to coronavirus has been announced by Local Government Secretary Robert Jenrick today as part of a comprehensive plan to ensure councils’ financial sustainability for the future.

The government has delivered a package of support to councils over recent months, and councils in England will now receive a further, unringfenced £500m to respond to spending pressures they are facing.

Recognising that councils are best placed to decide how to meet pressures in their local area, this funding has not been ringfenced.

In addition to this funding, a major new scheme introduced by the government today will help to reimburse lost income during the pandemic and boost cash flow.

Where losses are more than 5% of a council’s planned income from sales, fees and charges, the government will cover them for 75p in every pound lost.

Additionally, to enable them to get on the front foot and build much-needed breathing space into their budgets, the government is also bringing in changes so that they can spread their tax deficits over three years rather than the usual one.

Overall, in the last six months, the government has worked closely with local authorities to understand their needs and provided more than £27bn to help councils, businesses and communities through COVID-19.

This comprehensive support includes:

  • £3.2bn of new funding to councils
  • £600m to adult social care to support providers through a new infection control fund
  • Over £20bn in support for businesses
  • £500m in council tax hardship funds to offer economic support to the most vulnerable
  • £300m to support track and trace

Local Government Secretary Robert Jenrick MP said: “Councils are playing a huge part in supporting their communities during this pandemic. From supporting the most vulnerable and keeping vital services running to operating local track and trace, council workers have been at the forefront of this great national effort and are the unsung heroes of this pandemic.

“Today I am providing a further package of support that takes our support for councils during this pandemic to £4.3bn 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.”

The package also follows the Prime Minister’s announcement yesterday of the fast-tracking of £96m of investment through the Towns Fund to help kick-start activity in town centres and high streets, improve outdoor spaces, build cycle lanes and more. £360m will also be provided to redevelop brownfield sites to provide much-needed housing.

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